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Legal Issues to Watch in 2009

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1. A NEW HEADACHE FOR PHARMA
Prescription drugs will get their own dose of regulation as the FDA reopens rule-making proceedings. Congressmen Henry Waxman and Ed Markey previously pushed for a three-year moratorium on ads for new prescription drugs, preclearance for all other DTC ads and a requirement that ads contain a symbol indicating that a drug is new to the market. This will all be reintroduced. While drug companies will fight back in court, the FDA and Congress will be undeterred, and the attacks will be fierce.

2. THE TAX MAN COMETH
Next year will bring a perfect storm for taxes, and advertising will be in its path. President-elect Obama has made promises he can't keep without raising a lot of money, so a partial loss of the ad deduction, amortization of some expenses or requirements that ad deductions are conditioned on matching research investments will hit the floors of Congress. Whether such a bill will reach the Oval Office will depend upon a concerted industrywide effort and investment.

3. PRIVACY TO THE BACK BURNER
Congress and regulators are in a Catch-22: While under constant pressure from constituents and consumerists to curtail the use of personal information or behavioral targeting, they recognize that advertising is the backbone of the internet. So while there will be occasional skirmishes, the war on privacy will continue in its stalemate. Regulators will also see browser makers offering more control to consumers to block ads and the collection of personal information as adequate progress.

4. PAY UP OR SHUT UP
Sequential liability will be the term of the year, as more companies file for bankruptcy, leaving media and marketing companies with unpaid bills. Agencies and media buyers will try to disclaim liability to media companies for time and space taken up by bankrupt advertisers, while media will continue to insist that the advertisers and their agencies owe the money. Agencies will defend with the 4A's defense of sequential liability, claiming they're not liable unless they've been paid by the advertisers.

5. ADDING INSULT TO INJURY
Comparative advertising will rise, and so will suits and challenges. In a recession, advertisers get more aggressive in their quests for the consumers' dollars. While coupons and credit will be meted out to stingy consumers, comparative advertising will become far more relative. Unfortunately, there's a line between a fair comparison and an unfair practice. As aggressive comparative advertising rises, so will complaints filed by company lawyers.

6. SELF-REGULATION IN THE CROSS HAIRS
In 2008, both Congress and federal regulators showed some impatience with self-regulation, as children continued to eat junk food, marketers continued to target consumers with new technology that could track behavior, and drug companies ran ads that some consumers found troubling. In 2009, self-regulation will be tested again and asked to unite marketers to make even more concessions to their First Amendment rights. There is no telling how far the industry will be pushed.

7. HIDDEN IN PLAIN SIGHT
Congressmen Waxman and Markey are urging the FCC to take a serious look at embedded advertising and product placement, fearful that it is "blurring" the line between advertising and programming. Advertisers will retort that consumers are not that stupid and are perfectly comfortable with product placement, and that without it, the entire model for new ways to underwrite programming will be sent back to the Stone Age. In the end, the FCC will do nothing.

8. IT JUST AIN'T FAIR
Congress will fund the FTC and this time around allow the commission to issue regulations under the umbrella of unfair acts and practices. Societal issues that cannot be addressed through regulation of deceptive acts and practices will be prime targets. But wait -- there's more. Congress has been asked to expand the FTC jurisdiction to include banks and nonprofits and to increase its muscle for civil penalties. For now, not much will be enacted as the FTC determines its own limitations.

9. WHO'S NAGGING ME NOW?
State attorneys general will not sit idly by as legislative and regulatory initiatives languish in Congress. Expect the National Association of Attorneys General to establish task forces targeting privacy, obesity, behavioral targeting, social networks and the like as consumerists decry the lack of oversight. Nor will state legislators stand by and watch their budgets go further into the red. They'll be looking for their own revenue streams, and advertisers will be pinched by sales-tax collectors.

10. FLU SHOTS FOR EVERYONE
More companies will look to viral campaigns on YouTube and the growing social-media space as cheap ways to stretch advertising dollars. But a new player will enter the field: the class-action attorney. These lawyers will pick up the consumer-protection issues left unresolved by Congress and regulators and file class actions alleging that advertisers that initiate viral campaigns are duping consumers by disguising product pitches as entertainment.

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