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In the USA is there federal liability to a broadcaster if that broadcaster transmits an advertisement that makes a false commercial claim? For the scenario that I am thinking about, the advertiser has no knowledge that the claim is false and is not in a position to determine the truth of the claims made in the advertisement.

Ex: The WXYZ station broadcast an ad that Acme brand ferret oil will make your hair grow, but this product has no effect on actual hair growth.

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  • Usually such false claims are pursued through state false advertising law against the advertiser, or the broadcaster. It seems unfair and unhelpful to make the broadcaster liable, when the broadcaster is not in a position to easily verify such claims. But laws sometimes are unfair and unhelpful. For all I know there is such a Federal law, although I doubt it. That is why this isn't an answer. Commented Nov 15, 2021 at 15:25

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There can be liability. 15 USC 52 says that "It shall be unlawful for any person, partnership, or corporation to disseminate, or cause to be disseminated, any false advertisement". In the case Standard Oil v. FTC, 577 F.2d 653, one of the petitioners was Batten, Barton, Durstine Osborn, an advertising agency. In this particular case, using a set of tests established by previous case law, the court find that "BBDO knew or should have known of the deceptive nature of the F-310 advertising". See p. 13ff of this FTC document regarding advertising agency liability, which summarizes the situation that

An ad agency does not have to substantiate independently the claims or scientifically reexamine the advertiser’s substantiation. However, it cannot ignore obvious shortcomings or facial flaws in an advertiser’s substantiation.

Cases also include catalog marketers, infomercial producers and even Home Shopping Network. Given the right knowledge, a broadcaster could therefore be liable, if they know they are broadcasting false advertising.

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  • this is a great find!
    – kisspuska
    Commented Nov 23, 2021 at 9:38

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