|Both the FCC and the FTC are involved in the rising debate about product placement practices.
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Call the Labeling of Product Placement on TV 'Ludicrous'
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Action By Commercial Alert Calls for TV Content Labeling
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The document underlines the foundation's broad support of marketers' rights to place products in TV programming, without the burden of labeling them. The foundation's submission is in response to a petition submitted to the two federal agencies by Commercial Alert, a group that wants to see product placement on TV clearly labeled. The consumer group made its initial submission in October 2003.
Commercial Alert was co-founded by consumer advocate Ralph Nader and is run out of Portland, Ore., by executive director Gary Ruskin. It claims TV networks are deceiving the public, in part by selling product placement to advertisers as part of their overall sales deals.
Shortly after Commercial Alert filed its original complaint against unlabeled product placements, six advertising trade organizations sent letters to the FTC and FCC calling Commercial Alert's product placement disclosure concept "ludicrous" and "radical."
The FTC's associate director, Mary Engle, said she had not yet read the submission from the Washington Legal Foundation and added that the Commercial Alert petition was under review. The FCC had no comment on the matter.
Ms. Engle was quoted in a Boston Globe story, published March 21, as saying, "Product placement in TV and movies is a tricky area. ... In many cases, the characters aren't talking about the virtues of the product. A can of Comet may be on the set of Everybody Loves Raymond, but its benefits are not necessarily being promoted so it seems a bit different."
The legal foundation's document to the FTC states, "We believe product placement is a longstanding and legitimate form of commercial speech." It went on to say the petitioner is "concerned that Commercial Alert's proposal, if adopted, would effectively ban this form of entertainment sponsorship to the detriment of viewers."
David Price, senior vice president of legal affairs at the foundation, told AdAge.com, "Product placement has been around, in one form or another, since TV's earliest years. They [Commercial Alert] have never really demonstrated any real problem to be solved here."
Burdensome for producers
Mr. Price said Commercial Alert's proposal to have product placements clearly identified as advertisements would be burdensome for TV producers and would have the affect of banning product placement outright. Commercial Alert has already won battles to have search engines separate advertising from content.
Mr. Price also argues that Commercial Alert's submission is unable to prove any harm or injury to the consumer. When asked whether consumers want to be bombarded with commercial images during TV shows, Mr. Price said questions like that ought to be determined by the free market and that consumers were free to switch off their TV sets.
Mr. Ruskin, of Commercial Alert, responded to news of the petition by saying: "The Washington Legal Foundation and advertising agencies can whine all they want. The law is the law and they have to live with it."
Mr. Ruskin explained that the FTC's own rules state clearly that advertising must be labeled as such. Mr. Ruskin said, "Television is becoming an infomercial medium. We have a right to know if we're being propagandized." He added that other countries, including the U.K., have very strict laws against placement of commercial messages in TV shows.
While Mr. Price argued product placement is protected by commercial free speech, Mr. Ruskin said, "Corporations don't deserve any protection under the Bill of Rights, only people. That's the fundamental difference between Commercial Alert and the Washington Legal Foundation."