Top Legal Issues for 2008

Plus Consumerist's Biggest Business Debacles and Dangerous Toys of 2007

By Published on .

WILL THE ACTORS JOIN THE WRITERS?
The Writers Guild is on strike. In October 2008, Screen Actors Guild and American Federation of Television and Radio Artists face a similar dilemma as their collective-bargaining agreement with advertisers for the production of television and radio commercials ends. Will there be a strike? Not likely. The ad industry, together with SAG and AFTRA, commissioned an independent study in 2007 to find new ways to fairly compensate actors and get a fair return for the advertisers on their investment.
SO HOW COME KIDS ARE STILL FAT?
Throughout the world, concern of obesity among children was center stage in 2007. Regulators convened and targeted advertising. Respected medical organizations said advertising had a role in the problem, although they weren't quite sure what role it actually played. The results? Lots of new rules. And just as many fat kids. So now what? Watch out in 2008 as legislators and regulators get even more aggressive. They've drawn the line in the sand, and we can expect them to be serious bullies on the beach.
WAS THAT YOU OR YOUR AVATAR I SAW LAST NIGHT?
It started with Second Life, a virtual-reality world on the internet where you created an avatar and proceeded to become your own self-made personality. Marketers are advertising in this digital space. Dollars are changing hands. In 2008 legislators will awaken as they react to anecdotal evidence of problems in the virtual worlds. Self-regulators will step in, particularly to virtual worlds targeting kids. It will make us all reminisce about the good old days when we only dealt with internet sites, not internet worlds.
TURNING GREEN ISN'T ABOUT ENVY ANYMORE
In 2008 we'll all be asked to help by finding ways to "go green." Hybrids, recycling, conservation, sharing and every other activity Al Gore and his compatriots are urging us to support will begin the age-old regulatory journey from voluntary to mandatory. Congress will use its tax hammer to incentivize companies and individuals to join the great green coalition. Regulators such as the FTC will step in with hearings and, perhaps, subpoenas. But 2008 will be the crossroads for the greening of America.
THE DMCA IS NOT A TRADE ASSOCIATION
The Digital Millennium Copyright Act of 1998 was once considered a quantum leap forward in balancing the interests of copyright owners and internet publishers. Problem is that no one anticipated the viral end. Today, removing copyrighted material from the targeted website equates to winning a minor battle and losing a major war. In light of this, some copyright owners have taken sites such as YouTube to court. A compromise must be found if there is hope to foster continued growth in user-generated content.
INTEREST FOR EVERYONE
Without doubt, the crash of the subprime interest markets was a crushing blow to countless Americans. With such a critical election year at stake, Congress will demand closer scrutiny on the financial industry. Regulators and pundits will argue that advertising was the vehicle that promised millions of Americans they could afford loans that they really could not afford. In 2008, financial advertising will be a prime target of congressional interest.
THE GOLDEN AGE OF SELF-REGULATION
When the FTC held a "town meeting" last fall on tracking behavior on the web for marketing purposes, Commissioner Jonathan Leibowitz pulled out the same script he used to push companies toward the food and beverage self-regulatory initiative: Self-regulate or else. No one's quite sure what the "else" is but it doesn't sound good. But it's better than the alternative. The trick will be to ensure that self-regulation does not become so closely tied to the FTC that we lose the "self" in self-regulation.
THE IRON AGE OF GLOBALIZATION
The growing popularity and vitality of global, borderless web domains and activities will strain the limits of existing national intellectual-property laws, privacy and data-protection regulation and the national or regional (EU) regulation of advertising and marketing. Click and buy, rather than click and learn, will grow in importance. All this will cause great consternation among consumers and regulators as they try and grabble with the impossible -- the juggernaut we know as technology.
SEX AND ROCK 'N' ROLL? IT'S ALL ABOUT THE DRUGS
Thanks to the Food and Drug Act Amendments Act of 2007, the FDA now has the authority to require pre-review/approval of direct-to-consumer TV advertising for prescription drugs. Say hello to your new copywriters. And guess who is paying for it? To subsidize the costs, companies will have to estimate how many ads it will produce in a year and pay a user fee based on that number submitted for review. What a frightening idea. Paying the government to tell you what you can and cannot say.


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Douglas J. Wood is a partner at Reed Smith and chairman of the Global Advertising Lawyers Alliance.

Consumerist's Biggest Business Debacles

From Consumerist.com
BEST BUY CAUGHT STEALING PORN
In response to insider tip-offs of systematic porn pilfering, The Consumerist rigged a computer to make a video of itself, loaded it with porn and took it to Best Buy. It caught one of the techs purloining porn from its computer. The video went viral and Best Buy was forced to conduct a nationwide internal investigation.
SUBPRIME-MORTGAGE MELTDOWN
Housing prices stopped going up and banks stopped refinancing houses, pulling out the bottom blocks of the giant Jenga tower that was the housing frenzy. Everyone in the confederacy of dunces -- homeowners, loan officers, credit agencies, banks, investment firms -- stands to lose. Now it's just a matter of who is going to get stuck holding the hot potato.
JET BLUE PASSENGERS STUCK ON TARMAC
A winter storm swamped discount airline Jet Blue's operating capacity, with flights grounded, passengers stuck on the tarmac, flights canceled and call centers jammed. The CEO initially won kudos for making an online video apology, but that and his subsequent apologies weren't enough to save his job.
MATTEL'S LEAD RECALLS
Mattel was forced to conduct the largest toy recall ever after it was found a number of its toys contained lead well above the federally allowed toxicity levels. We may not know the true impact until 20 years from now when we wonder why national IQ levels have dropped 45 points.
COMCAST THROTTLES BITTORRENT
The Associated Press proved Comcast was disrupting the traffic of customers using file-sharing program BitTorrent. Though often used to trade pirated movies and music, the software is used legally by online gamers and open-source groups, and in the AP's case, the decidedly non-copyrighted Bible. Comcast denied disrupting traffic.
TOPPS MEAT -- E. COLI
Late 2007 saw an extremely high number of meat shipments recalled for E. coli contamination. At Topps Meat, the recall was so massive that the company went bankrupt. Insiders say the USDA's meatpacker-friendly loopholes have led to higher tolerances for E. coli at plants.
STUDENT-LOAN SCANDAL
Attorneys general sued and fined prominent banks and universities after uncovering widespread collusion and conflicts of interest between the two to sell students on high-priced loans. Looks like someone needs to repeat that introduction-to-ethics class they slept through.
TJ MAXX: DATA BREACH
Unsecured wireless systems at TJ Maxx lead to the largest data breach in the history of the universe, with millions of credit-card numbers compromised. The issue highlighted how retailers have been quick to adopt convenient wireless information systems without taking adequate security measures.
VERIZON FIOS SETTING HOUSES ON FIRE
Verizon's fiber-optic cable network is fast, but its technicians can't be accused of the same swiftness as they keep drilling through electrical and gas lines, leading to small fires. Somehow Verizon's PR mavens felt they could reinvent physics and claim the smoke at some incidents occurred in the absence of fire.
MENU FOODS KILLS DOGS WITH FAKE PET FOOD
Menu Foods of Canada was found to be selling pet food tainted with fake protein. Dozens of pets died. A recall ensued, and readers got a glimpse into how Chinese ingredient makers get contracts approved, only to later replace key ingredients with cheaper and sometimes fraudulent components, which came to be at the center of the massive lead recalls that came later.

Dangerous Toys of 2007

MAGNEBLOX
If swallowed, the magnets in toys can reattract inside intestines and cause twisting, blockages and tears.
EASY-BAKE OVENS
Snackers' hands can get stuck via front metal opening, resulting in light bulb burns.
BATTERY PACKS FOR TOY VEHICLES
The lithium-ion batteries can ignite while charging.
FLOATING EYEBALLS
Encased eyeball contains kerosene, which if cracked can be hazardous.
THOMAS THE TANK ENGINE
The little tooter and his dozens of friends are covered in lead paint.
SKY RANGERS RC AIRPLANES
Poses "a risk of temporary hearing loss and injuries to eyes, face and hands."
DORA/SESAME STREET TOYS
More lead paint, this time from Mattel. An overriding theme for the year.
MINI ZOOPER DOLL STROLLERS
Two of the strollers hinge clips pose potential to "sever a child's finger tip."
GYMBOREE PIRATE SWORD
The blade can snap off, creating the possibility for real blade action.
AQUA DOTS
The coating on beads is the chemical equivalent of date-rape drugs.
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