Washington State Court of Appeals Upholds $24.6 Million Penalty Against Meta for Not Meeting State Political Advertising Disclosure Requirements – A Warning to All Media Companies to Assess and Comply with State Political Disclosure Rules

Washington DC is not the only place where there are regulatory or political decisions made that affect broadcasters and advertising for candidates or political issues.  We’ve written many times about state laws that govern the use of AI in political advertising, with more than 20 states already having laws on their books and more considering such legislation in legislative sessions this year (see our articles here and here).  We have also noted that there are a number of states that have laws requiring media companies, including digital media companies, to keep records of political advertising sales and, in some cases, to make those records available to the public (see, for example, our article here).  While there are few federal elections in 2025, there are state and local elections in many states – and most of these laws are targeted to those state and local elections, so broadcast stations and cable systems regulated by the FCC need to be aware of these state laws.  But most of these laws reach far beyond FCC-regulated entities and apply to digital and even print media – so all companies need to be paying attention to their requirements.  And a number of recent actions highlight these concerns.

No state has been as active in enforcing such requirements as Washington State.  In a December decision seemingly overlooked by much of the trade press, the Washington State Court of Appeals upheld a decision fining Facebook parent company Meta $24.6 million for its failure to comply with the extensive political disclosure rules adopted by that state.  This decision upheld a summary judgement by a state trial court finding Meta liable for a $24.6 million penalty for violating the state’s public disclosure rules that apply to political advertising (for more on the trial court decision, see our article here). 

This decision was one of the first that we have encountered where a state imposed significant fines on a digital media company for not providing details of political advertising run on its system (though, as noted below, we are seeing more use of these state laws across the country).  The State’s Election Commission initially brought suit against Meta after receiving complaints from an individual who asked Meta for information about political ads that ran on its platforms, and Meta was unable to provide the required information.  Washington State laws require that companies that sell political advertising keep many of the same records required by the FCC of broadcasters and cable companies, including information about the price and schedule of political advertising that was bought, as well as information about the sponsors of the ads.  In addition, for digital advertising, the state’s rules require information about the demographic targeting of the political ads.  The state laws also require that these records be made available to the public, upon request, in a matter of days. 

The December Court of Appeals decision rejected Meta’s many arguments against the proposed penalty.  The court rejected Meta’s First Amendment argument that the decision put an unconstitutional burden on both Meta and political advertisers by making them disclose information about political ad buyers.  In making this argument, Meta relied on the reasoning of a federal Fourth Circuit Court of Appeals decision finding a similar law in Maryland to be an unconstitutional abridgement of the media company’s First Amendment rights (see our article here on the Fourth Circuit decision).  The Washington Court of Appeals rejected that argument, finding that the Fourth Circuit decision was limited to “news organizations,” particularly newspapers, and that Facebook (on which the Washington political ads ran) was not a news organization. 

The court also rejected arguments that the fine was precluded by Section 230 of the Communications Decency Act (insulating tech platforms from liability for content posted by third parties – see our posts here and here on Section 230).  The court found that Meta was not being penalized for the content of the posts on its platform to which Section 230 applies.  Instead, the penalty was for Meta not providing the required reporting on its own actions – the sale of those posts and their target audience, as required by state law.  As this was information in Meta’s control, and not part of the content of the third-party post, the court determined that Section 230 did not apply. 

While this decision may be appealed to the Washington Supreme Court, it is important precedent as more and more states adopt their own political rules that can apply disclosure rules akin to those set out in the FCC’s political file rules not only to broadcast content, but also to political ads transmitted online.  These substantial penalties should make all media companies sit up and take notice of these state political advertising requirements to make sure that there are compliance programs in place to adhere to the rules.  With digital advertising involving many automated systems, and various intermediaries in the digital sales process, setting up compliance programs can be complex and, in the relative lull of this off-year, media companies should be reviewing their compliance programs. 

As we have noted above, Washington State is not unique in adopting rules requiring disclosure of political advertising sales, though its rules are among the most complex.  Several other states have rules requiring that any company selling advertising time to political candidates maintain records of those sales.  There is little uniformity in the rules adopted by these states, with each state that has adopted rules having their own requirements as to what records must be kept and what kind of political sales trigger the recordkeeping requirements.  In some cases, the records are open to the public (like those in Washington State).  In others, the state authorities can request them.  In a few states, it is unclear who has access to the required records.  In recent months, we have seen officials from at least one state’s election authority request documents from a number of media companies about ads run in connection with the 2024 election.  In other states, we have seen private parties make a request for documents under these laws. 

One of the states with comprehensive rules for political recordkeeping is New Jersey, which has gubernatorial and other state elections in 2025.  With the potential for penalties like that imposed in Washington, companies all across the country that sell political advertising, even on media not subject to FCC rules, must be sure that they are complying with these rules so that, if asked, they can provide any required records.  Now is the time to assure your compliance.