FCC to Consider Rewriting Product-Placement Disclosure Rules

Says Formal Rule-Making Is Imminent

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WASHINGTON -- A majority of the five members on Federal Communications Commission has approved the agency's moving forward to rewrite disclosure rules for product placement on TV.

FCC officials said a final announcement that it will launch a formal rule-making is imminent; the agency is awaiting the vote of two remaining commissioners, Robert McDowell and Deborah Taylor Tate. The FCC pulled a vote on the proposal to start the disclosure rewrite from its December meeting agenda, but the proposal has since been circulating among the commissioners.

Ad, media opposition
Advertising groups and media companies had opposed the FCC decision to rewrite the disclosure rules, arguing that there was no evidence consumers are hurt or misled by product placement. The Advertising Coalition in two letters to FCC commissioners argued that any changes puts the cart before the horse, essentially altering rules before showing they need to be altered.

Commercial Alert, a consumer-activist group, had petitioned the FCC and the Federal Trade Commission to look at new rules for product placement. The FTC previously rejected the request.

Robert Weissman, the group's managing director, today said the group would like to see any product placement disclosed at the moment a product is seen on a telecast, not a the end or beginning of the telecast.

'Placement is deceptive'
"Our view is product placement is deceptive unless simultaneous disclosure," he said.

Last year U.S. Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) have warned that product placement is increasingly "blurring" the lines between content and advertising, leaving viewers without any certainty on whether they are seeing commercial messages. Mr. Waxman heads the House Oversight and Government Reform Committee and Mr. Markey heads the House Energy and Commerce Committee's telecom subcommittee.

FCC Chairman Kevin J. Martin last year at a hearing in Chicago said digital video recorders may be prompting networks to look at more subtle and sophisticated ways to place ad messages into content. He questioned whether current FCC rules offer adequate disclosure. Commissioner Jonathan Adelstein has also questioned the growing level of product placement.
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