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SB-896 False, misleading, deceptive, or unlawful advertising: goods or services: platforms.(2019-2020)



Current Version: 03/17/20 - Amended Senate

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SB896:v98#DOCUMENT

Amended  IN  Senate  March 17, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 896

Introduced by Senator Pan

January 28, 2020

An act to amend Section 17500 of the Business and Professions Code, relating to business. An act to add Section 48.6 to the Civil Code, relating to business.


LEGISLATIVE COUNSEL'S DIGEST


SB 896, as amended, Pan. False advertising. False, misleading, deceptive, or unlawful advertising: goods or services: platforms.
Existing law, the Consumer Legal Remedies Act, makes unlawful specified unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer.
This bill would provide that a platform, as defined, is not liable for monetary relief, including attorney’s fees and costs, for the distribution of false, misleading, deceptive, or unlawful material in any civil action arising from the distribution of that material if the platform meets specified conditions, including a requirement that the platform respond expeditiously to remove or disable access to that material upon written notification from a complaining party, as defined. The bill would prescribe requirements for the service and contents of the written notification. The bill would provide that a person who knowingly and materially misrepresents that material is false, misleading, deceptive, or unlawful to a platform is liable for damages, including attorney’s fees and costs, incurred by the user that posted the material and incurred by the platform in relation to a civil action arising from the platform’s reliance on that misrepresentation in removing or disabling access to the material.
This bill would provide that a platform is not liable in any action arising from the platform’s decision to disable access to or remove material if the decision is based on the platform’s good faith belief that the material is false, misleading, deceptive, or unlawful, or is based on facts or circumstances from which the false, misleading, deceptive, or unlawful nature of the material is apparent. The bill would provide that this protection is applicable regardless of a court’s determination on whether the material is false, misleading, deceptive, or unlawful. The bill, however, would only extend this protection if the platform fulfills certain conditions regarding the platform’s notification to the user regarding the removal or disabling of access to that material. The bill would establish requirements for a counternotification from a user regarding the removal of material or disabling of access, including a requirement for a user to provide a specified statement under penalty of perjury. By expanding the scope of the crime of perjury the bill would impose a state-mandated local program.
This bill would only make its provisions applicable to a platform that adopts and implements, and informs its users of, a policy that provides for the termination of user accounts that repeatedly distribute false, misleading, deceptive, or unlawful material.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a crime for a person, firm, corporation, or association, or any employee of a corporation or association, to engage in advertising practices conducted by specified means of dissemination or publication, if a statement is made or disseminated that is untrue or misleading, and which by the exercise of reasonable care should be known to be untrue or misleading.

This bill would make nonsubstantive changes to these provisions.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) As more Americans turn to social media as their primary news source, and as social media companies obtain larger profits from advertising dollars, social media companies should be held to the same truth in advertising liability standards that traditional media outlets must adhere to and be held accountable for the content that social media companies recommend to users through their algorithms.
(b) It is the intent of the Legislature to provide a process for the correction and removal of false, misleading, deceptive, or unlawful material distributed by online social media sites and other digital platforms.

SEC. 2.

 Section 48.6 is added to the Civil Code, to read:

48.6.
 (a) In any civil action arising from the distribution of false, misleading, deceptive, or unlawful material by a platform, a platform shall not be liable for monetary relief, including attorney’s fees and costs, for the distribution of false, misleading, deceptive, or unlawful material, if the platform meets all of the following conditions:
(1) Does not have actual knowledge that the material is false, misleading, deceptive, or unlawful.
(2) Is unaware of facts or circumstances that would make the false, misleading, deceptive, or unlawful nature of the material apparent to the platform.
(3) Upon obtaining actual knowledge or awareness, acts expeditiously to remove, or disable access to, the material.
(4) Upon written notification of a claim that the platform is distributing false, misleading, unlawful, or defamatory material, the platform responds expeditiously to remove or disable access to that material.
(b) (1) The written notification described in paragraph (4) of subdivision (a) shall be served on the social media internet website’s designated agent and shall substantially include all of the following:
(A) A physical or electronic signature of the complaining party, or the person authorized to act on behalf of the complaining party.
(B) Identification of the material the complaining party claims is false, misleading, deceptive, or unlawful.
(C) Information reasonably sufficient to permit the platform to locate the material.
(D) Information reasonably sufficient to permit the platform to contact the complaining party, including the complaining party’s name, address, telephone number, and electronic mail address.
(E) A statement that the complaining party has a good faith belief that the material complained about is false, misleading, deceptive, or unlawful, and facts supporting the complaining party’s good faith belief.
(2) A person who knowingly and materially misrepresents that material is false, misleading, deceptive, or unlawful to a platform pursuant to this subdivision shall be liable for damages, including attorney’s fees and costs, incurred by the user that posted the material and incurred by the platform in relation to a civil action arising from the platform’s reliance on that misrepresentation in removing or disabling access to the material.
(c) (1) Subject to paragraph (2), a platform shall not be liable in any action arising from the platform’s decision to disable access to or remove material if the decision is based on the platform’s good faith belief that the material is false, misleading, deceptive, or unlawful, or is based on facts or circumstances from which the false, misleading, deceptive, or unlawful nature of the material is apparent. The protections of this paragraph apply regardless of a court’s determination on whether the material is false, misleading, deceptive, or unlawful.
(2) The protections of paragraph (1) shall not apply to material that is the subject of any notification provided pursuant to paragraph (1) of subdivision (b) unless the platform fulfills all of the following conditions:
(A) Takes reasonable steps to promptly notify the user that posted the material that the platform has removed or disabled access to the material.
(B) Upon receipt of a counter notification, as described in paragraph (3), from a user that posted the material, promptly provides the complaining party with a copy of the counter notification and, if the social media internet website determines the complaining party knowingly misrepresented the material to be false, misleading, deceptive, or unlawful, informs the complaining party that the platform will repost the removed material or reenable access to the material within seven business days.
(C) Reposts the removed material or reenables access to it within seven business days following receipt of the counter notification, unless the platform’s designated agent first receives notice from the complaining party that the complaining party has filed a civil action alleging the material is false, misleading, deceptive, or unlawful.
(3) A counter notification shall be a written communication that is served on the platform’s designated agent and that substantially includes all of the following:
(A) A physical or electronic signature of the user that posted the material at issue.
(B) Identification of the material that has been removed or to which access has been disabled.
(C) The location where the material appeared prior to the platform removing or disabling access to the material.
(D) A statement under penalty of perjury that the user has a good faith belief that the material was removed or disabled as a result of a complaining party who knowingly misrepresented the material as false, misleading, deceptive, or unlawful, and facts supporting the user’s good faith belief.
(E) The user’s name, address, telephone number, and electronic mail address.
(d) This section shall not apply to a platform unless it adopts and implements, and informs its users of, a policy that provides for the termination of user accounts that repeatedly distribute false, misleading, deceptive, or unlawful material.
(e) For purposes of this section, all of the following definitions apply:
(1) “Complaining party” means a person making a claim pursuant to subdivision (b) that material is false, misleading, deceptive, or unlawful.
(2) “Material,” when used as a noun, means an advertisement for goods or services for which the platform receives a financial benefit in exchange for the distribution of that material.
(3) “Platform” means any internet website or electronic or digital networking service or account that provides for the posting, display, or exchange of information, including, but not limited to, social media internet websites or other internet websites featuring videos or still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or internet website profiles or locations.
(4) “User” means an individual, corporation, organization, association, business trust, partnership, limited liability company, or any affiliate thereof, that resides or conducts business in the state and that has a unique profile on a social media internet website subject to this section.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
SECTION 1.Section 17500 of the Business and Professions Code is amended to read:
17500.

It is unlawful for a person, firm, corporation or association, or an employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into an obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in a newspaper or other publication, or an advertising device, or by public outcry or proclamation, or in any other manner or means, including over the internet, a statement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, that is untrue or misleading, and that is known, or that by the exercise of reasonable care should be known, to be untrue or misleading, or for a person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised. A violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.