Ad Industry Must be Alert to Potential 'Tsunami' of Regulation

AAF's Datri Calls Commercial Speech 'Poor Stepchild' of Free Speech

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ORLANDO, Fla. (AdAge.com) -- The advertising industry is heading for a "tsunami" of regulation and is at a "tipping point" of greatly increased scrutiny, warned a panel on social media and privacy at the American Advertising Federation conference here.

But Mary Engle, associate director-advertising practices, bureau of protection of the Federal Trade Commission, said the FTC was "struggling" with staying abreast of all the changes in new media. And added that the agency is rethinking its policies on privacy and is encouraging self-regulation in the areas of behavioral targeting advertising and privacy.

After the panel, Ms. Engle said that in 2005 the FTC published rules on children's online protection activities but completely overlooked the coming of Facebook and MySpace. Because things are changing so fast, she said, FTC is "constantly updating" its information and needs to stay "flexible" on new developments, such as children's use of mobile phones and texting.

Jeffrey Edelstein, partner-advertising, marketing and media, Manatt, Phelps and Phillips, contended that the FTC "is doing a very good job" dealing with new media. Jill Meyer, attorney and member-in-charge, Cincinnati office of Frost Brown Todd, told her audience that "everyone should know that your Facebook page is advertising speech."

Carla Michelotti, exec VP-global chief legal, government and corporate affairs officer at Leo Burnett Worldwide, said the industry was at a tipping point of increased regulation and urged it her colleagues to take notice. "We have to stay more alert," she said.

James Datri, president of AAF, took "a view from 15,000 feet" when he pointed out that commercial speech is often treated as the "poor stepchild" of individual free speech. He added: "We've got to be very careful before we start allowing parts of commercial speech to be chipped away."

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