Mid-Year 2024 Marketing Law Summary

As many readers are doubtless aware, thus far 2024 has been a particularly eventful year in the marketing law world, thanks to several highly impactful new rules, regulations, and court rulings that will change the way many companies currently conduct their business. This article highlights the most critical marketing law changes of 2024, summarizing the major legal developments from the first half of the year that will impact business practices moving forward.

FCC Rule Change: Prior Express Written Consent

FCC Declaratory Ruling on Artificial Intelligence

FCC Rule Change: Revocation of Consent

New State Laws

Supreme Court Ruling: Loper Bright Enterprises v. Raimondo

District Court Ruling: Bradley v. DentalPlans.com

The Months Ahead for Marketing Law

FCC Rule Change: Prior Express Written Consent

In December of 2023, the Federal Communications Commission (FCC) amended its marketing law rules implementing the Telephone Consumer Protection Act (TCPA) by revising the first full paragraph of paragraph (f)(9) of §64.1200 in the Code of Federal Regulations, which defined the term prior express written consent (PEWC) to contact a consumer by phone using an automated telephone dialing system (ATDS) or a prerecorded voice.

The FCC undertook this action to close what it deemed a “loophole” in its current regulations that enabled companies to secure online consent for consumers to be contacted by multiple companies, such as in response to an online request for an insurance quote. Numerous companies were abusing this loophole to secure consent on behalf of hundreds of potential callers in one fell swoop, and many of the calls they placed had nothing to do with the subject matter of the website that collected the consent.

To address these perceived abuses, the new rule defined PEWC as a signed, written agreement that “clearly and conspicuously authorizes no more than one identified seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice. Calls must be logically and topically associated with the interaction that prompted the consent…”

Although this “one-to-one” consent rule will take effect until January 27, 2025, many companies are already requiring their lead vendors to comply with the new rule well in advance of that date.

FCC Declaratory Ruling on Artificial Intelligence

In February of 2024, the FCC issued a Declaratory Ruling that clarified the meaning of “artificial voice” as that term is used in the TCPA to include a voice created by a generative artificial intelligence (AI) program, which effectively made calls that employ an AI-generated voice the legal equivalent of a prerecorded robocall.

Thus, when using AI to generate a voice for a call, companies must satisfy all consent requirements imposed by the TCPA and its associated rules, including the FCC’s revised PEWC rule summarized above.

In the months leading up to and following the declaratory ruling, regulators and lawmakers uniformly expressed a healthy dose of skepticism regarding the potential negative implications of widespread AI usage, as seen in a recent blog post by the Federal Trade Commission (FTC) outlining the potential dangers that could arise from companies employing AI chatbots.

FCC Rule Change: Revocation of Consent

Also in February of 2024, the FCC adopted new rules governing consumers’ ability to revoke their prior express consent to receive marketing calls and texts, and altered the period in which companies must honor a consumer’s Do-Not-Call (DNC) request.

The new marketing law rule clarified the right of consumers to revoke consent in any reasonable manner that clearly expresses a desire not to receive further calls or texts, and that companies may not infringe on that right by designating an exclusive means to revoke consent that precludes the use of any other reasonable method.

The FCC also revised its rule clarifying that a one-time text message confirming an opt-out request does not violate the TCPA or FCC rules as long as the text merely confirms the opt-out request and does not include any marketing or promotional information, and the text is the only additional message sent to the called party after receipt of the opt-out request.

FTC Rule Change: Telemarketing Sales Rule

In March of 2024, the FTC announced significant amendments to the Telemarketing Sales Rule (TSR) that expanded aspects of the TSR to cover business-to-business calls, and also added more onerous recordkeeping requirements that require companies to maintain detailed records of a wide variety of telemarketing calls and transactions for a period of no less than five years.

Most of the changes to the TSR took effect in May, but the recordkeeping requirements will become effective on October 15, 2024.

Marketing Law Changes 2024: New State Laws

So far, the following states have amended their telemarketing statutes this year.

Georgia: Several amendments to Georgia’s existing telemarketing legislation are taking effect this month, including one that enables the Georgia Attorney General to pursue violations regardless of whether they were “knowing and willful” and extends liability for calls made on the behalf of third parties that violate the law. These new amendments also permit private plaintiffs to initiate class action lawsuits with no limitation on damages. Finally, the amendments to Georgia law introduced a new type of affirmative defense to telemarketing violations for calls placed to a consumer “whose telephone number was provided in error by another subscriber.”

Maine: In 2024, the Pine Tree State amended its telephone solicitation law, requiring covered companies to scrub outbound calling lists against the FCC’s reassigned number database before placing a call, which takes effect this month. Solicitors should be aware of this marketing law when operating in Maine.

Maryland: In the beginning of 2024, Maryland’s new “Stop the Spam Calls Act of 2023” went into effect, which requires “prior express written consent” for any telephone solicitations which use “an automated system for the selection or dialing of telephone numbers.” It also includes time and frequency calling restrictions that mirror those of other states, as well as granting Maryland residents a private right of action to pursue violators.

Mississippi: Recent amendments in the Hospitality State have limited the ability of companies to call consumers and inform them about Medicare Advantage plans, unless prompted to by the consumer. Telemarketing for Medicare supplement plans essentially has been banned altogether in Mississippi. These amendments also came into effect this month.

Supreme Court Ruling: Loper Bright Enterprises v. Raimondo

The Supreme Court ruling in Loper Bright Enterprises v. Raimondo the effectively eliminated a long-standing legal doctrine known as the Chevron Doctrine or Chevron Deference, named for the 1984 Supreme Court decision that birthed it, Chevron USA Inc. vs. Natural Resources Defense Council, Inc.

According to the Chevron Doctrine, when Congress delegates the interpretation and enforcement of a particular statute to a federal administrative agency, any reasonable interpretation of that statute by the agency cannot be overruled by a court. In the context of performance marketing, Congress gave the FCC authority to implement rules and regulations to enforce the TCPA. If a business attempted to challenge an FCC rule in court, it had to prove that the FCC’s rulemaking was arbitrary and capricious, or otherwise not a reasonable interpretation of the TCPA, which before Loper Bright was a difficult hurdle to overcome.

Now that the Chevron Doctrine has been effectively neutralized, courts are no longer required to defer to the opinions of federal agencies when their rules are challenged. Thus, any business or organization affected by an agency rule (such as the new FCC rule to secure prior express written consent) can challenge it in court. While businesses had that right before Loper Bright, the ruling gives them much greater odds of success.

District Court Ruling: Bradley v. DentalPlans.com

Among other matters, the Maryland case of Bradley v. DentalPlans.com concerned the sufficiency of a recorded consent to contact the plaintiff using an automated telephone dialing system (ATDS) and a prerecorded voice that was collected during the course of an inbound call the plaintiff placed to the defendant.

FCC guidance on securing consent seemed to indicate that using a voice recording was acceptable under the E-SIGN Act. However, court in Bradley interpreted the E-SIGN Act to require that certain “clear and conspicuous” disclosures companies must provide to consumers under FCC rules to secure valid consent (that they are authorizing the delivery of telemarketing calls using an ATDS or prerecorded voice and an agreement to receive them is not required as a condition of purchase) had to be presented to the consumer in writing.

The Court further held that the signature and consent of the consumer can be secured via voice recording, as can the substance of the agreement; the only portion of the agreement that cannot be presented via voice recording are the TCPA's required disclosures.

As this case was only decided by the District Court of Maryland (and not by the Fourth Circuit Court of Appeals), it will only serve as guiding precedent in Maryland, although TCPA class action attorneys will doubtless use it to argue that it invalidates any consent secured solely via voice recording.

The Months Ahead for Marketing Law

The first six months of 2024 have already delivered massive Marketing Law Changes 2024 on both the federal and state levels, and forward-looking companies are rising to meet these new compliance challenges. With the halfway point of 2024 now in our collective rear-view mirror, all businesses operating in the heavily regulated marketing space should stay vigilant to the ongoing Marketing Law Changes 2024, including new rules, regulations, and court decisions expected in the latter half of the year, and prepare to adapt accordingly.