Legislative Updates

FCC Announces Embedded Advertising Inquiry and Rulemaking

The Federal Communications Commission has indicated it will conduct a Notice of Proposed Inquiry on simultaneous disclosure of embedded advertising and a Notice of Proposed Rulemaking on all other facets of product placement. The FCC is seeking comments on whether it should require broadcasters to include an on-screen "crawl" whenever there is an instance of product placement on television. The FCC decision is troubling to the advertising industry because it suggests that regulatory action is necessary. In 2005, the Federal Trade Commission considered and rejected a similar proposal, saying there was no evidence that product placement was unfair or deceptive or resulted in consumer harm.

Online Advertising Hearing Announced

House Energy and Commerce Committee Commerce, Trade and Consumer Protection Subcommittee Chairman, Bobby Rush, D-Ill., and Rep. Ed Whitfield, R-Ky., the ranking member of the subcommittee, announced they will hold a hold a hearing this summer examining online advertising issues. The members of Congress said they are concerned about data collection and personalized Internet content, including behavioral advertising. They added that they are especially interested in recent online advertising partnerships and the risks such agreements pose to consumer privacy. No date for the hearing has been set.

New DTC Moratorium Bill Introduced in House

Reps. Rosa L. DeLauro, D-Conn., and Jo Ann Emerson, R-Mo., introduced a bill that would require many of the same changes to direct-to-consumer advertising considered and rejected by Congress last year. The Responsibility in Drug and Device Advertising Act of 2008 (H.R. 6151) would impose a three-year moratorium on DTC ads and give the FDA authority to require companies to distribute "corrective materials" if they violate the moratorium. Additionally, the proposal requires prominent display of potential side effects and a federal public education campaign that describes the risks of certain drugs. DeLauro chairs the Agriculture, Rural Development, Food and Drug Administration Appropriations Subcommittee, and Emerson is a senior Republican member of the Appropriations Committee. The bill was introduced soon after a House Energy and Commerce Committee Oversight and Investigations Subcommittee hearing on DTC advertising. At that hearing, subcommittee chairman Bart Stupak, D-Mich., and full committee chairman John Dingell, D-Mich., criticized representatives from three pharmaceutical companies and asked if their companies would voluntarily agree to impose a two-year moratorium on DTC advertising and not to market prescription drugs until a valid outcomes study of the product is completed. A two-year moratorium was considered and rejected by the committee and Congress last year during consideration of the FDA Amendments Act of 2007.

Massachusetts Rep. to Introduce Online Data Collection Opt-Out Bill

Massachusetts Rep. William Straus, D-Mattapoisett, plans to introduce legislation that would allow users to opt-out of data collection mechanisms on Web sites. The proposal mandates Web sites provide notice of what kinds of data are collected and provide specific data security for users who do not opt-out. Additionally, the bill would limit third-party advertisers to accessing tracking data no longer than 24 months after it is collected. Rep. Straus is seeking co-sponsors before he introduces the bill.