Payola occurs when a person or entity fails to disclose that they provided or promised to provide money, services, or other consideration in exchange for the inclusion of program matter in a broadcast before the broadcast occurs, in accordance with Section 508 of the Communications Act of 1934. Both the individual or entity providing the money, services, or other consideration and the recipient must make this disclosure so that the station can disclose the payment to its viewers when the matter is broadcast, in accordance with Section 317 of the Communications Act. Failure to disclose such payment or provision of services is punishable by a fine of no more than 10,000 dollars or a term of imprisonment no more than one year, or both.
See also: sponsorship disclosure
[Last updated in July of 2024 by the Wex Definitions Team]