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FCC Comments Raise Issues Regarding Content-Rated Ads and Product-Placement Blocking that Underscores the Need for Further Parental Controls Discussions

Television parental content controls are still under review by the Federal Communications Commission (“FCC”), and children’s activist groups are urging the FCC to mandate technology that would allow viewers to block “objectionable” advertising material.

As a follow-up to the last month’s article regarding the FCC’s Notice of Inquiry to Implement the Child Safe Viewing Act of 2007 (“CVSA”), thousands of comments have been submitted to the docket already. In addition, some children’s advocacy groups have suggested that the FCC (1) require broadcast networks, cable networks and individual broadcast stations to rate advertising content, and (2) facilitate an industry solution to allow parents to preemptively identify and block programs containing embedded advertising messages. It would be advisable for industry to directly address the nuanced issues that should be considered if ad ratings and embedded advertising blocking proposals are further explored, such as: 

Advertisement Content Ratings:

• Should advertising content be tailored to the rating of the television program (i.e., if a television program is rated TV14 under the Television Parental Guidelines, should all advertisements contained in the program-hour be suitable for at least a TV14 audience)?
• Would the content rating be based on the actual content of the advertisement?
• Or, would the content rating be based on the product advertised (i.e., feature film ads may not contain racy content, but the full-length feature could have nudity, expletives and violence)?
• How would the FCC treat advertisements for entertainment-related toys (i.e., toys related to the movies “Pirates of the Caribbean” and the “Transformers” are popular for young children, but the movies themselves are both rated PG-13)?
• How would the FCC treat popular children’s products that symbolize violence, (i.e., advertisements for toy guns or even common war play board games, such as Battleship!)?

Product-Placement Blocking:

• Would the regulation be limited to direct paid product placements?
• Or, must the program-producer avoid any mention of logo-related goods or apparel?
• What if the brand is essential to the story line or title of a program (i.e., if the full length feature, “The Devil Wears Prada,” is broadcast on television, must it become “The Devil Wears Undisclosed Designer Label” in the promotions, for the television broadcast to avoid blocking)?

Bear in mind, the CVSA directs the FCC to examine advanced parental control technologies that would be compatible with various communications devices and platforms, consistent with the medium-specific First Amendment analysis. Currently, parents are faced with several different ratings standards for content, depending upon the media: (1) the TV Parental Guidelines for television programs, (2) the MPAA Film Ratings for feature films, (3) the Entertainment Software Ratings Board ratings for video games, and (4) various Internet web-filtering technologies. So, to the extent that commenters can discuss the proposed advertising ratings and blocking technologies in the context of synergizing the different forms of ratings standards, the comments are likely to be more effective. 

Why this Matters:

A report on television parental controls is due to Congress Aug. 29, and this is likely to be the first media proceeding tackled by presumptive FCC Chairman Julius Genachowski. The presumptive chairman is also a founding board member of a parental content control group, Common Sense Media, so he is likely to be well-versed on this issue and less willing to accept that the status quo is ideal. Further, assuming Al Franken wins the Senate seat in Minnesota; with Arlen Specter’s recent announcement, the Democrats in Congress now have a majority in the House and a filibuster-proof majority in the Senate. These recent Senate gains would make it easier for Congress to address comprehensive parental controls reform, if it chooses to do so. 

There is still time to add meaningful nuance to the docket that is being reviewed by FCC staff and will ultimately be summarized for Congress. Any interested commenter may submit reply comments until May 18.

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NY Times: Pepsi Suing Coca-Cola Over Powerade Ads

PepsiCo Inc. sued rival Coca-Cola Co. on Monday over ads for a new version of Coca-Cola's sports drink Powerade, saying the campaign makes false claims that could hurt its Gatorade brand.

Brandweek:  Recession Dampens Green Enthusiasm

Is the recession taking a bite out of environmentalists’ unwavering passion to buy green? GfK Roper’s latest green study suggests so.

In a survey of more than 2,000 U.S. adults (ages 18 and older), the market research firm found that consumer concern for the environment over the economy fell from 69 percent in 2007 to 55 percent in 2008. The decline represents a shift from “broad-based green thinking to more practical green action.”

Reuters: Burger King to scrap ad after complaint by Mexico

Fast food giant Burger King apologized on Tuesday for an advertisement featuring a squat Mexican draped in his country's flag next to a tall American cowboy and said it would change the campaign.

NY Times: US lawmakers target deep packet inspection in privacy bill

U.S. lawmakers plan to introduce privacy legislation that would limit how Internet service providers can track their users, despite reports that no U.S. ISPs are using such technologies except for legitimate security reasons.

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On April 22, the FTC issued a Report concerning consumer protection issues arising in the mobile commerce marketplace, entitled “Beyond Voice: Mapping the Mobile Marketplace.”  The Report followed several public meetings involving the FTC since 2000, including those held on May 6-7, 2008 and in November of 2006. In concluding that “the FTC staff is committed to policing the wireless space to ensure consumer protections are in place,” several key findings included:

• Cost disclosures about mobile services continue to generate consumer complaints. The FTC staff will monitor cost disclosures, bring law enforcement actions as appropriate, and work with industry on improving its self-regulatory enforcement.
• The FTC and its law enforcement partners should continue to monitor the impact on consumers of unwanted mobile text messages, malware, and spyware, and take law enforcement action as needed.
• Although spyware and malware have not yet emerged as a significant problem on mobile devices, that situation can change as consumers increasingly use mobile devices for a wide variety of applications, including Internet access. The FTC staff encourages stakeholders to continue developing strategies that prevent or minimize the spread of spam, spyware, and malware on consumers’ mobile devices.
• The increasing use of smartphones to access the mobile Web presents unique privacy challenges, especially regarding children. The FTC will expedite the regulatory review of the Children’s Online Privacy Protection Rule to determine whether the rule should be modified to address changes in the mobile marketplace. This review, originally set for 2015, instead will begin in 2010. An opportunity for public comment will be provided.

Given the numbers of wireless and mobile devices in the hands of individuals under the age of 18 (and 13), and the increasing proliferation of mobile devices, this will become a hotter topic in the months and years ahead. As if this point needed to be emphasized, it has been reported that as of January 2007—two years ago—there were approximately 800 million cars, 850 million personal computers, 1.5 billion television sets, but already 2.7 billion (yes, billion) wireless and mobile devices in use around the globe, with more than 800 million e-mail and 1.8 billion SMS text-messaging users.

For more information on this topic, also check out the Legal Bytes blog.

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This post was written by Avv. Felix Hofer.

1. When I came around 'game advertising' for the first time my attitude as a lawyer, not necessarily familiar with what I – snobbishly – considered as basically being “kid's or nerds' stuff”, was obviously extremely skeptic. Running more and more frequently into articles published on the topic, I very soon had to realize that this was already a definitely “hot” topic to a number of industry sectors, involving an incredible amount of investment as well as offering truly exciting business perspectives.

According to an interesting US study, published in June 2007 on in-game ad spending targeted to digital homes in the period 2006–2012, companies had already invested 370 mln. of USD and were expected to increase such figure up to 2.051 mln. USD in year 2012.

Fairly impressed by the forecast exposed in the US study I got curious about how feelings would be in Europe about potential business development with respect to the specific area. Again surprise, surprise: according to a study performed on behalf of the EU Commission total revenues from on-line content sales will reach 8,3 bln. on Euro by 2010 (at an increase rate of a growth of over 400% in five years!) and on-line games will contribute with a significant share to that quite remarkable pie. In Fall 2007 another study showed that the Internet had already become the most popular communication tool among youngsters aged between 16 and 24; in the specific target group 82% affirmed to go on-line at least 5 days per week for entertainment and information purposes, while 46% declared that they preferred the Internet over (and used it more than) TV.

With the final blow I was provided when I had to realize that 9,8 bln. Euro had been spent for game consoles only during the 2007 Christmas period, that even traditional community venues (as sports arenas, shopping centers) were arranging specific gaming areas and organizing new entertainment events (e. g. “disc burn” sessions) attractive for gamers, that digital platforms did score important come-backs for popular past-time games and that in France the gaming sector had surpassed the entertainment industry for the first time in annual revenues.

Click here to learn more.

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This post was written by Avv. Felix Hofer.

1. The general principle is that the use of a person's image without his/her consent is basically prohibited (this even more if such use is performed for marketing or – in general - commercial purposes). In Italy the right on a person's image is governed both by the Civil Code and the Intellectual Property Act (Law no. 633 dated April 22nd, 1941, amended and integrated in the following).

(i) According to Section 10 of the Italian Civil Code the image of a person, or of his/her parent, spouse, or child can be exhibited or published only if such use is explicitly permitted by law and provided that the use does not cause prejudice to the dignity or reputation of the person represented.

Should abuse occur (save for the cases in which the use performed results in a criminal offense), a local (civil) Court can order termination of the abuse and award damages.

(ii) The local Intellectual Property Act contains additional provisions on the use of a person's image.

(ii.a.) A person's image MAY NOT be exhibited, reproduced or put on sale without his/her consent (so Section 96 of Law n° 633 dated April 22nd, 1941).
(ii.b.) Exceptions to this basic provision (i. e. use without consent) are allowed if the reproduction of a person's image is justified by his/her notoriety (see Section 97) and by a public interest (e. g. for purposes of information to the general public).
(ii.c.) Finally, a person's image may not be exhibited or put on sale if such use causes prejudice to the represented person's honour, dignity or reputation (Section 97 of the Intellectual Property Act). 

Click here to learn more. 

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This post was written by Gregor Pryor and Elisabeth Hoffnell.

On 17 April 2009, the four men behind the popular Pirate Bay website were found guilty of copyright infringement and sentenced to one year imprisonment and payment of a fine of SEK 30 million (£2.4 million).

The defendants include the site's operators Fredik Neij, Gottfrid Svartholm Warg and Peter Sunde Kolmisoppi. The prosecutor also charged the Swedish millionaire Carl Lundström, who has donated money to the organisation and has helped configure larger numbers of computers to host the site. The defendants have run The Pirate Bay since 2004 after it was set up a year earlier by the Swedish anti-copyright organisation "the Piracy Agency".

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WSJ.com: Fed Features: Ads at Movies Warn Against Scams

The Federal Reserve is coming soon to a theater near you.

The subject won't be the drama inside the central bank or its role in the current financial crisis. Rather, Fed officials plan to launch advertisements in movie theaters to warn homeowners about foreclosure scams.

Reuters: UPDATE 2-US online gambling crackdown a breach of WTO - EU

* EU Commission: U.S. Internet gambling laws hamper trade 

* Commission seeks negotiated solution with U.S. 

A U.S. Justice Department crackdown on European online gambling companies violates U.S. commitments under the World Trade Organization, the European Commission said on Thursday in a draft report.

Reuters: Jennifer Lopez wins cybersquatting case at UN agency

American singer and actress Jennifer Lopez has won a cybersquatting case against a U.S. web operator who registered two Internet addresses that used her name for commercial profit, a U.N. agency said on Thursday.

NY Times:  Front of Los Angeles Times Has an NBC ‘Article’

In a move that raised questions about how far newspapers would go to please advertisers, The Los Angeles Times ran a front-page ad on Thursday that resembled a news column.

Excite News: EU to sue Britain over Internet privacy 

The European Union started legal action against Britain on Tuesday for not applying EU data privacy rules that would restrict an Internet advertising tracker called Phorm from watching how users surf the Web.

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The JPC and the unions have agreed on the new rate charts. Remember that while you can now pay under those rates, should the new Contract not be ratified by the unions (expected within a month), you will have to seek refunds. If you prefer, you can pay under the old rates and issue a retroactive payment once the formal approval of the new Contract is accomplished. Retroactive payments must be received by the performers no later than June 15, 2009.

• 2009 AFTRA Radio Recorded Commercials Contract Schedule of Minimum Fees
• 2009 TV Wildspot Unit Values
• 2009 TV Cable Network Unit Values
• 2009 TV Commercials Contract - Main Rates
• 2009 TV Commercials Contract - Miscellaneous Rates
• 2009 TV Local Cable Rates
• 2009 TV Spanish Language Wildspot Unit Values

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Looking for high quality CLE in a beautiful venue?

Join experienced corporate counsel and outside practitioners in Limerick, Ireland for Advertising Law in the United States and Europe -- The Challenges Ahead sponsored by the Franklin Pierce Law Center and the University of Limerick.

The venue is the campus of the University of Limerick, a short distance from Shannon, Ireland and to where inexpensive direct flights are available daily from major East Coast cities.

Political leadership throughout the world is changing, nowhere more so than in the United States. With that will come major changes in regulation, whether at the local or federal level or through voluntary compliance with industry standards. Member states in the EU find themselves struggling to respond to local concerns while maximizing their combined market strength. Globalized media and interactive technology are providing consumers worldwide with greater control and choice in what they experience, and once local markets are now boundary-less and at odds with attempts at local regulation. What are today’s rules? How should advertisers and their counsel respond to the merged but dissonant marketplace and how can they balance competing attempts at regulation in the United States and Europe?

Faculty is comprised of professors, practitioners and government leaders from both sides of the Atlantic, including Douglas Wood and Anthony DiResta of Reed Smith LLP.

To register, go to piercelaw.edu. 

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Q: What timetable now applies to implementing the new Contract?

The new Contract began April 1, 2009, but is not officially approved until the SAG and AFTRA Boards and members vote favorably on its ratification. The union voting process should be completed by May 15, 2009. Since the new Contract was unanimously approved by the SAG and AFTRA negotiating committees, it is virtually assured that it will be ratified by the union Boards and members. But nothing is certain, so there are two options:

• Continue to operate under the current contract and make retroactive payments of the new rates once the union Boards and members ratify the new Contract
• Pay the new rates (the unions have issued new rate charts), and run the risk that the new Contract will not be ratified and refunds might be required. Since getting refunds for overpayments from actors is very difficult, the risk associated with paying the new rates may outweigh the benefits of avoiding additional accounting. Each company needs to make that determination on an individual basis.

Q: How long until the deal is ratified by the unions’ Boards and members?

The new Contract was unanimously approved by the Commercials Committees of both unions. It will now go to each of the union Boards for approval, and will then be sent out to the union members for a vote on ratification. This entire process should be completed by May 15.

Q: Until the new rates are published, how should I pay actors?

It is probably better to pay under the old rates until the new ones are all agreed upon. Then you will be able to make retroactive payments to actors. The proposed new rates will be published shortly, but will not be official until the unions’ Boards and members ratify the new Contract. While you can pay under the new rates prior to ratification, you then take the risk of seeking reimbursement should the unions’ Boards or members fail to ratify the new Contract.

Q: Which commercials are subject to the new rates and new Contract provisions?

The new rates, terms and provisions apply to the following:

• All original commercials produced on or after April 1, 2009
• All new or additional versions of commercials originally produced under prior contracts for commercials that are integrated on or after April 1, 2009 under the Integrating of Commercials into Different Commercials  provisions
• All versions of commercials that are edited and aired after April 1, 2009, other than as expressly permitted under the Editing of Commercials provisions

Any terms, rates or conditions of current performer contracts that are more favorable to the performer than those under the new Contract remain in effect, although we are not immediately aware of any such provisions.

Q: Can I still freely bargain for made-for-Internet or made-for-New-Media commercials, and set any rate I can get the actor to agree to?

Yes. The minimums will not apply until April 1, 2011. So you can continue to freely bargain until that time. Even when the minimums are established, your right to freely bargain on editing remains.

Q: What happens now with the eight-week cycle for the Internet and New Media?

The eight-week cycle is now a permanent part of the new Contract. You can run consecutive eight-week cycles as well. Nor do you need to ask an actor if you can use his or her spot for an eight-week cycle if they have not objected to Internet use. With regard to rates, the one-year moveover rate is now 3.5 session fees, and the eight-week cycle is now 1.33 session fees.

Q: Will the JPC be conducting any seminars to explain the new Contract?

Yes. We’ll have a schedule for seminars out in a few weeks.

Q: Where can I get more information?

Information will be forthcoming as it develops. For the next few weeks, you need to be patient as documents are finalized and rates are set. The SAG and AFTRA approval process will also take us through to May 15. But I’ll try to keep everyone posted on my JPC Blog at the ANA website, as well as here on the Adlaw by Request blog. In the meantime, please feel free to email me at dwood@reedsmith.com or call me at 212 549 0377.

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Has it ever occurred to you why you get so many calls at home from people trying to sell you stuff (or from creditors) but very few, if any, on your mobile phone? This is rooted in a Federal Communications Commission (FCC) rule that prohibits telephone calls (other than calls made for emergency purposes or made with the prior approval of the called party) using an automated dialing system or an artificial / pre-recorded voice to any telephone number assigned to a mobile phone service.

When wired-line phone numbers and wireless phone numbers were completely separate and never intended to be interchangeable, the FCC’s rule seemed both logical and enforceable. However, as soon as the FCC allowed the porting of wired-line phone numbers to wireless carriers, the ability to continue enforcing this rule understandably became more difficult, especially as to the issue of consent.

The Direct Marketing Association (“DMA”) has recently taken up this issue with the FCC by filing comments regarding the FCC’s Telephone Consumer Protection Act passed in 1991 (the “TCPA”). The DMA has requested clarification from the FCC as to whether a marketer or creditor is permitted to place an auto-dialed call or pre-recorded message to a telephone number associated with a wireless service, if that number was originally provided as a contact number associated with a land-line phone. The DMA cited an earlier FCC declaratory ruling in 2008 in which the FCC permitted a creditor to call a debtor on his/her mobile phone, if that debtor previously provided the creditor his/her mobile number. The DMA has made the argument that both situations described above are analogous as they involve the called party previously authorizing calls to a specific number, regardless if that number was previously associated with a wired or wireless service. 

According to the DMA, “The Petitioner’s reading of the Commissions’ rule disregards a consumer’s choice and the realities of the marketplace. We believe a business should be permitted to call a consumer at a number designated by the consumer regardless of the underlying telecommunications involved.” The DMA also cited a 1992 FCC TCPA Order in which the FCC stated, “Persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.”

Why this matters: From a creditor or marketer’s standpoint, a favorable ruling would open up new opportunities to reach customers/debtors who are continually moving between services. On the other hand, violations of the FCC’s Telephone Consumer Protection Act can be daunting and expensive, as both the FCC and private citizens alike have the right to bring actions against marketers and creditors engaging in prohibited telemarketing practices.

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This post was written by Benjamin Waltuch, Adv.

Worldwide Anti-Spam legislation is now more than six years old. However, the amount of spam that we all receive daily continues to grow despite the installation of spam blocking software. The Israeli Knesset has approved an “Opt-In” anti spam statute in its communication law which was modeled after European Union’s Directive 2002/58/EC and requires affirmative permission before a commercial message is allowed. This is much more extreme than the CAN-SPAM Act in the US, which requires that a sender must provide a method to be removed from the mailing list or an “Opt-Out” method but does not require specific affirmative permission.

The “kick” is that the Israeli Anti-Spam Law provides for a minimum liquidated civil damage amount of approximately US$250 (one thousand New Israeli Shekels) PER EMAIL without any necessity to prove that the recipient was damaged in any way by the email. The law allows for a recipient to sue the sender in small claims court and also amended the Israeli class action law to allow for a cause of action under this anti spam statute to be certified for class actions. In addition, the statute provides for criminal fines of approximately $50,000 for sending emails without consent and approximately $17,000 for emails that do not follow the procedural requirements spelled out below. Finally, the law states that the individuals who comprise the management of a company are considered liable for any violation of the law with the civil penalty of approximately $17,000. Upon violation of the law by a company, it is presumed that the members of management of that company have not fulfilled their duty to keep the law.

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Yahoo! News: Feds sue Dish Network over do not call complaints

The nation's second-largest satellite TV provider — Dish Network — is being sued by the government for alleged violations of the national Do Not Call Registry.

NY Times: 8 Hours a Day Spent on Screens, Study Finds

IN a world with grocery store television screens, digitally delivered movie libraries and cellphone video clips, the average American is exposed to 61 minutes of TV ads and promotions a day.

Adage: Georgia-Pacific Sues P&G for False Advertising by Bounty

Claims that New Paper Towels are Thicker are False, Says Marketer

Brawny paper-towel marketer Georgia-Pacific Corp. is suing Procter & Gamble Co. for falsely advertising "25% thicker quilts" on its Bounty towels.

Reuters: EU threatens action to defend Web users' privacy

Some Internet companies are abusing consumers' personal data and this cannot be allowed to continue, a top European Union official will warn the industry on Tuesday.

Mediaweek: SAG, AFTRA Reach Commercials Contract

SAG and the American Federation of Television and Radio Artists said early Wednesday that they have reached a tentative new three-year commercials contract.

Reuters: House votes to grant FDA authority over tobacco

A measure giving the Food and Drug Administration power to regulate the manufacturing and marketing of cigarettes cleared the U.S. House of Representatives on Thursday.

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In honor of the official opening of the Eiffel Tower which took place on this day in 1889, we’ve decided that such an auspicious occasion is deserving of an Adlaw By Request Round-Up.  We’re serving up a bountiful harvest of informing, interesting and hopefully useful articles. Just a few of the topics we’ve covered include:

• State of SAG/AFTRA Commercial Contract Negotiations
• Anti-SPAM
• Advertising to Children
• Safe Harbor Developments within the Digital Millennium Copyright Act (DMCA)
• Food-Related Advertising
• FTC Endorsement and Testimonial Guidelines
• FTC Free-to-Pay Guidelines

In addition, we recently established a new section on Adlaw by Request which we’ve aptly named What We’re Reading. In this weekly segment, our goal is to share with you, our readers, a handful of articles from various sources that caught our attention over the past week. We encourage you to check back with us each week (usually on Friday) to read what we’re reading.

Lastly, we very much encourage feedback, thoughts, comments, questions, etc. from our readership. We’ll try to publish all of them, and hopefully create a constructive dialogue on some of the issue with which we’re all grappling.

Thanks for reading and Viva L’Adlaw By Request.

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