DataVault Holdings, Inc. (DataVault) may license its technology to political committees in the ordinary course of its business, for the usual and normal charge, and on the same terms and conditions it offers its non-political clients because it would not result in a prohibited contribution to its political committee clients.
DataVault is a for-profit corporation that wholly owns Adio, LLC. Through Adio, LLC, DataVault licenses its patented Adio Tones technology to different organizations, including charitable and for-profit entities, to use in their fundraising activities. To use this technology, users must download an app and authorize the app to listen for tones that are inaudible to humans. These tones can be embedded in an audio broadcast or file that is delivered by television, radio, satellite, or streaming. When the phone “hears” a programmed tone, it sends a notification and solicitation to the phone’s user.
DataVault proposes to license this technology to political committees. With the technology, a political committee could include an inaudible tone in its advertisements. Any user who downloads the app will, upon accessing any of the committee’s advertisements, receive a notification that includes a link to the political committee’s website, where the user could make a contribution. DataVault will charge its political committee clients a “commercially reasonable” licensing fee for using Adio Tones. DataVault asserts it will operate as a commercial vendor of political committees by acting within its “usual and normal business involv[ing] the sale, rental, lease, or provision of those goods or services.”
The Federal Election Campaign Act (the Act) and Commission regulations prohibit corporations from making contributions to federal candidates and to political committees that make contributions to federal candidates. A contribution in this context includes in-kind contributions, such as the provision of goods and services without charge or at less than the “usual and normal charge.” Commission regulations define “usual and normal charge” as the price of goods in the market from which they ordinarily would have been purchased at the time of the contribution, or the commercially reasonable rate prevailing at the time the services were rendered.
Data Vault states it will license its Adio Tones technology to political committees to use in their political advertisements in the ordinary course of its business, at the usual and normal charge, and on the same terms it offers to non-political clients. Therefore, the Commission concluded that DataVault’s proposal is permissible because it would not result in a prohibited corporate contribution to political committees.
Date Issued: December 15, 2022; Length: 4 pages