FTC opinion stirs advertiser fears

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The Federal Trade Commission doesn't believe it has the authority to discipline companies that market violent films, music and video games to kids. But that gives little comfort to advertisers.

In fact, advertising groups fear the FTC opinion could increase congressional pressure to pass legislation targeting the same advertising if the entertainment industry doesn't unveil new self-regulatory initiatives.

"Typically when an agency says, `We don't have the jurisdiction,' a member [of Congress] will leap into that void," said Penny Farthing, counsel to the Freedom to Advertise Coalition, made up of major advertising and media groups.

"It's good news in that it gives us an opportunity for the private sector to do the job," said Wally Snyder, president-CEO of the American Advertising Federation. "But there is also a stick from Congress that we need to take action. This issue is real popular on [Capitol] Hill."

Last week, an aide to Sen. Joseph Lieberman, D., Conn., reiterated the senator's intention to seek legislation if the film, music and video game industries don't take voluntary action.

"We anticipated all along that there was this possibility that the FTC would feel it couldn't act," said the Lieberman aide, Dan Gerftein. "We are sticking to our challenge. If they don't act in six months, we would seek narrowly tailored legislation."


FTC Chairman Robert Pitofsky announced the commission's view in a letter last week, responding to questions raised by legislators about the FTC's Sept. 11 report on the marketing of adult-oriented products to kids. Mr. Pitofsky said it would be difficult for the FTC to prove such ads are either deceptive or unfair, the areas in which it has authority.

Mr. Pitofsky also warned that pushing the FTC to enforce industry self-regulatory codes could be counterproductive, leading industries to either drop or weaken their codes. "Even if the commission could overcome the considerable difficulties it would face in proving cases, there are also questions about whether such actions would advance the goal of providing increased protection to children," he wrote.

"It seems clear that because of the substantial First Amendment protections accorded these products, a comprehensive and effective self-regulatory response could have a more prompt and substantial impact," he added.

Entertainment-industry groups applauded the FTC letter. "Chairman Pitofsky's letter plainly states that any attempt to charge the movie industry for deceptive advertising of R-rated films would be fatally infected with serious constitutional problems," Jack Valenti, president-CEO of the Motion Picture Industries of America, said in a statement.

Meanwhile, in Congress, several legislators said they intended to first push the industry to act voluntarily.

"I will continue to work with the entertainment industry to substantially enhance and enforce voluntary codes of conduct," said Senate Commerce Committee Chairman John McCain, R., Ariz., whose committee held hearings on the FTC report. "This requires an express commitment on the part of all three industries not to target children with advertising for restricted products, a commitment to provide more information to parents about violent content in media products. . . to ensure children are not able to purchase such products without parental consent."

Advertising groups said that because the issue is bipartisan, it is likely to get scrutiny in a split Congress. "At the very least, what this means is that what the industry is doing is going to be put under the searchlight in the new Congress," said Dan Jaffe, exec VP, the Association of National Advertisers.

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