June 11, 2009

Clark Rector Jr., Senior Vice President – Government Affairs

Tobacco Advertising Legislation Moves

Legislation designed to give the FDA broad power to regulate tobacco advertising has passed an important procedural battle in the Senate and appears headed for passage. The procedural vote was closer than expected indicating concern over the legislation. The bill would give the Food and Drug Administration power to severely limit the placement of advertising, as well as the amount of information that tobacco companies could provide to legal, of-age customers. It is similar to a proposal from years past that was ultimately withdrawn after lawsuits supported by the AAF and other advertising organizations demonstrated that it was unconstitutional. The legislation also takes regulatory control from a Federal Trade Commission that has decades of advertising regulatory expertise and transfers it to an FDA which has very limited experience with advertising.
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House Subcommittee Holds ICANN Hearing

On Thursday, June 4, the House Energy and Commerce Subcommittee on Communications, Technology and the Internet conducted a hearing on the Internet Corporation for Assigned Names and Numbers (ICANN) in light of the pending September 30 expiration date of an oversight agreement between ICANN and the U.S. Commerce Department National Telecommunications and Information Administration. Subcommittee members were virtually unanimous in their recommendation that the agreement be extended citing concerns about ICANN’s transparency, accountability, budget processes, and stakeholder affairs. During the hearing ICANN President Paul Twomey assured the subcommittee that the organization would not move forward on the introduction of new top level domains until concerns of brand owners are addressed. ICANN currently plans to being accepting applications for new top level domains in 2010. AAF has written Commerce Secretary Locke asking for an extension of the oversight agreement. AAF has also written ICANN expressing concerns about the plan to introduce new top level domains.

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FDA Proposes DTC Guidelines

The FDA has released new, proposed guidelines that would amend the way broadcast direct-to-consumer advertising of pharmaceuticals is provided to consumers. The proposal would require that both benefit and risk information should be presented in similar typestyles and voiceovers. The proposals are subject to comment and possible revision before the FDA determines whether to move forward. The proposals appear to be generated by complaints alleging that drug manufacturers use audio and video techniques in an effort to minimize a consumer’s recognition of risks.

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Green Marketing Claims Examined

The House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection conducted a June 9 hearing on green marketing claims. Witnesses discussed the role of the Federal Trade Commission’s Green Marketing Guides and the complexity of making meaningful, substantive and nondeceptive claims for products that multiple environmental impacts, such as a product that may be recyclable, but is energy intensive to distribute.

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Commercial Volume

An old effort to limit the volume of advertising has once again come to the House of Representatives. The House Commerce Committee was scheduled to hold a June 11 hearing on legislation that would require the FCC to develop a standard limiting the volume of adverting to no higher volume than the program material that it is supporting. The AAF sees numerous problematic issues with this proposal and will oppose it.
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France Moves to Protected Copyrighted Material on the Internet

French lawmakers have reconsidered an earlier position and have voted to cut off access to Internet users who continue to illegally download copyrighted material after repeated warnings. A new agency created by the French legislation could cut off a users Internet access for up to one year. French government sources estimate the legislation might result in as many as 1000 Internet users a day losing access

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California Anti-Spam Law Preempted

California courts have recently limited the scope of the California anti spam law by determining that the law is preempted by the federal CAN-SPAM Act. Under the decision, the court found the law is preempted unless the plaintiff can demonstrate that there was “falsity or deception” in the message. This ruling also means that in order to recover damages, the plaintiff must show both “falsity” and proof that he or she suffered monetary damages as a result of relying on the false message. Under the federal CAN-SPAM Act, companies can be found liable for false emails, but individuals do not have a right to bring suit against the sender.
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