Centers of Excellence: marketing to children

On April 28, the Interagency Working Group on Food Marketed to Children released the “Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts.”  The Working Group consists of representatives from several agencies, including the Federal Trade Commission, the Centers for Disease Control and Prevention, the Food and Drug Administration, and the United States Department of Agriculture.  The Working Group aims to provide uniform nutritional and marketing principles that will promote children’s health while reducing obesity.

Despite its legitimate goal, the proposal sets overly ambitious standards that will be challenging for the industry to meet, especially due to the definitions regarding what activities by food companies constitute “marketing.”   The proposal would ban various forms of marketing to children and adolescents for virtually all foods.  And it would reach marketing activities not directed toward children – such as using endorsements by celebrities or athletes who are popular with children or using words like “child” or “kid” on packaged foods.  The proposal would also ban advertising/promotion on an Internet site with a 20% share of viewers being adolescents or children.  This would have a devastating effect on social media sites.

The effect will be felt far beyond the food industry, including on business partners and promotion partners of food companies; in addition, the proposal sets a very dangerous precedent of what constitutes “marketing to kids” and an even more troubling precedent in its move to restrict commercial speech through nominally “voluntary guidelines” backed up by four powerful governmental agencies.

PMA will comment to the FTC on the proposed rules and is engaged in numerous other steps, both with a coalition of other concerned entities, and independently, to help protect the industry.

These rules and the subject of marketing to children will be extensively covered at the PMA Marketing Law Conference, November 15-16, 2011 in Chicago.  For more information on the conference, click here.

Last week a  complaint was filed in Federal Court in Maine  (1)seeking a declaratory judgment that the recently passed Maine statute(10 MRSA SEC 9551 et seq,)— which prevents the collection of personal  information for marketing purposes from a minor without parental consent and further restricts the use of such information for the purpose of marketing a product or service to a minor —is unconstitutional and (2) seeking an injunction against the enforcement of said statute.

In response thereto, on Friday Aug. 28, the Attorney General of Maine, Janet Mills, commented as follows:
“After speaking with the sponsor and other legislators involved in it, I think they understand that the law is not presently enforceable,” Mills told Capitol News Service.  “And so the position we’ll take in the court, I believe, is that we won’t be acting to enforce the law as currently drafted.”

Mills say she has spoken with the measure’s sponsor, Sen. Elizabeth Schneider, a Democrat from Orono, and suggested they craft changes to the law that will achieve Schneider’s original goal of preventing minors from sharing sensitive health information online without infringing on constitutional rights.

However,notwithstanding the above, the AG may oppose the motion for a preliminary injunction by plaintiffs, because she may contend that there is no case or controversy  and the case is moot in view of the nonenforcement.  Since however, the statute also allows for a private right of action, it is possible  that pending a rewrite of the statute, which goes into effect Sept. 12, clients may be in limbo vis a vis such private enforcement even if the AG does not enforce  the statute. Accordingly,  in such event,businesses are advised to consult with their attorneys as to the  course of action they should undertake in the interim.

The Maine governor signed into law on June 2 a new law that, starting September 12, will essentially bring the requirements of COPPA to 13-18 year olds that reside in that state, both in the online and the offline world. Under the new law, it will become an unfair trade practice to collect personal information from children under 18 without first obtaining parental consent. Consent must be “verifiable,” defined as “any reasonable effort, taking into consideration available technology” to ensure that the parent receives prior notice of and authorizes the collection of his or her child’s personal information. The law also makes it an unfair practice to engage in “predatory marketing” to kids under 18, defined as, among other things, using a minor’s personal information to market “a product or service to that minor or promoting any course of action for the minor relating to a product.”

The Maine Attorney General is given authority to enforce the law, with potential civil penalties of $10,000 to $20,000 for the first violation, and $20,000 or more for the second or subsequent violation the law. In addition, the new law provides for a private right of action, with statutory damages of up to $250 for each violation. Many are concerned about this law, in particular the private right of action, and fear that it could have serious impact for those who collect information from teenagers online, those who engage in direct marketing to children under 18 (for example

to teenagers between 13-18), as well as those who collect information offline in Maine from children. Several industry groups have indicated that they will be working to delay implementation of the law, PMA is working closely in this area, but as of this writing, no delay has been announced by the state of Maine.

However, this is an evolving situation and we will report very soon again about the efforts undertaken in this area, and the possibility of revision of the statute and the time frame frames therein contemplated.