GALA Gazette: Latest Developments in Advertising to Children

AMERICAS: UNITED STATES

Latest Developments in Advertising to Children
Author: John Schoenecker & Anthony DiResta, Reed Smith LLP

The debate about the relationship between childhood obesity and food marketing led to significant legal developments in the United States in 2006. Food advertisers saw changes to the U.S. self-regulatory guidelines for children’s marketing as well as a potential inquiry from the U.S. Federal Trade Commission. With new leadership in the U.S. Congress, issues relating to children’s advertising will be a focus for all advertisers in the coming months.

“The Food Initiative”

For the past several years, social activists and some U.S. legislators have been vocal in blaming food advertisers for causing greater obesity in children. To counter this criticism, several top food and beverage companies collectively decided to limit how they advertise their products to children in what is being called the “Children’s Food and Beverage Advertising Initiative” (“Food Initiative”). The Food Initiative is a self-regulatory scheme in which the participants agreed to increase their advertising of healthy foods to children in the United States. The Food Initiative has five requirements: (1) committing at least half of all children’s TV, radio, print, and Internet advertising to the promotion of healthy food or healthy lifestyles, (2) allowing only healthy food products to be shown in most interactive games, (3) reducing the use of third-party licensed characters to promote certain foods, (4) eliminating food product placement in entertainment media content, and (5) eliminating food advertising in elementary schools.

So far, the following companies have agreed to the Food Initiative: Cadbury Schweppes USA; the Campbell Soup Company; The Coca-Cola Company; General Mills, Inc.; The Hershey Company; the Kellogg Company; Kraft Foods Inc.; McDonald's; PepsiCo, Inc.; and Unilever.

The FTC’s Anticipated Subpoenas

In October, the Federal Trade Commission (“FTC”), the government’s watchdog over marketing practices in the United States, requested comments from the public on how it might soon go about issuing “§ 6(b) requests” (similar to a subpoena) to food and beverage manufacturers and fast food restaurants. This formal request for comment noted that the FTC will be seeking data from at least 50 different food and beverage companies concerning: (1) the types of foods marketed to children, (2) the types of media techniques used in children’s marketing, (3) the amount of money spent on children’s marketing, and (4) the amount of commercial advertising time purchased. The data received will be used in a report that the FTC must submit to Congress concerning a possible connection between advertising and children’s obesity.

Revised CARU Guidelines

2006 also saw changes to the Children’s Advertising Review Unit (“CARU”) guidelines, which are the most discreet set of rules that advertisers can follow when marketing to children in the United States. CARU is the self-regulatory body that governs the content of children’s marketing. Although advertisers are not legally bound to follow CARU rulings, CARU can refer a matter to the FTC for further investigation if an advertiser ignores a ruling. The changes to the guidelines focus, in part, on helping children understand the difference between advertising and editorial content when they see it. One of the new guidelines prohibits children’s marketing from blurring the distinction between advertising and editorial content, such as with product placement and advergaming. A similar new guideline requires that advertisers’ websites that are directed to children indicate that the website’s activities are advertisements.

CARU Actions

CARU focused attention in 2006 on children’s advertising issues beyond just food advertising. For example, CARU found fault with movie studios that place advertisements for PG-13 movies in television shows aimed at children under 13. Some of the movies that CARU criticized for this practice were: “Star Wars Episode III,” “Harry Potter and the Goblet of Fire,” and “Superman Returns.” This is controversial because CARU has taken the position that PG-13 movies should not be advertised to children under 13 although a PG-13 rating does not necessarily mean that children younger than 13 should not view the movie.

In addition, CARU heard several cases involving websites that allegedly allowed children to submit personal information without obtaining parental approval, a practice that could violate not only the CARU guidelines but also U.S. law. Where website operators have participated in these CARU inquiries, the result has typically been that CARU suggest that the operators get parents’ consent or simply block children under 13 from posting to the websites. For those website operators that failed to participate in the inquiries, CARU reported the operators to the FTC for further investigation.

Political Landscape

The Democratic Party won control of both houses of the U.S. Congress in November. As a result, advertising directed to children will likely become a key political issue – presenting potential regulatory, legislative, and adjudicative challenges for the industry.

For example, Democratic Senator Tom Harkin will likely become the Chairman of the Senate Agriculture, Nutrition and Forestry Committee. He is expected to use that to position to argue – as he did in a 2004 speech – that “the marketing of junk food, especially to kids, is out of control.” In 2004, Senator Harkin proposed a bill that would have given the FTC the authority to regulate food marketing to children under 18. While the bill did not get much attention from Congress at the time, an aide to Senator Harkin recently stated, “We are certain to introduce the legislation again this year. This is an area where Senator Harkin is an advocate. It will be one of our top-tier agenda items.”