April 4, 2008

Jeff Perlman, Executive Vice President – Government Affairs
Clark Rector Jr., Senior Vice President – State Government Affairs
Robert Kohlmeyer, Manager – Government Affairs

FTC Publishes Consumer Protection Workshop Staff Report

In a staff report on a recent consumer protection workshop, the Federal Trade Commission said it will continue to use four main tools to protect consumers using new technologies: law enforcement, consumer education, fostering industry self-regulation, and research and policy development. The report is a summary of findings from the November 2006 workshop "Protecting Consumers in the Next Tech-Ade." The commission has recently held workshops on unsolicited e-mail and behavioral advertising and is soliciting formal comments for proposed self-regulation guidelines for behavioral advertising. The AAF will submit comments. A workshop on mobile marketing is planned for May. A copy of the staff report is available here.
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FCC Embedded Advertising Consideration Delayed

Action on a Federal Communications Commission proposal that would require simultaneous disclosure of televised embedded advertising has been delayed again. If the proposal is ultimately approved, broadcasters would be required to alert viewers every time a paid product placement occurs. Like the Federal Trade Commission, the AAF believes there is no evidence that product placement is unfair or deceptive or causes consumer harm. The FCC originally was to consider whether they should open either a Notice of Proposed Rulemaking or a Notice of Proposed Inquiry in December. The AAF, along with other advertising trade associations, sent a letter to FCC commissioners arguing that creating a Notice of Proposed Rulemaking would create a presumption that regulation is necessary. A copy of the letter AAF sent to the FCC is available here (Word document). A copy of the FTC letter indicating the agency's satisfaction with current product placement rules is available here.
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Florida Tax Exemption Amendment Deliberation Continues

A proposed constitutional amendment offering to reduce local property taxes in exchange for an increase in sales tax and a possible elimination of some current sales tax exemptions is under consideration in Florida. The state legislature's Style and Drafting Committee is drafting new language designed to withstand the scrutiny of Florida courts. The amendment would direct the Florida legislature to review current sales tax exemptions and eventually revise which industries should benefit from tax exemptions. The Taxation and Budget Reform Commission must approve the plan this month in order for it to appear on a May ballot for voter approval or rejection. Some commission members, including State Sen. Mike Haridopolos, R-Melbourne, have requested more specific details on which exemptions lawmakers want to eliminate to help fill the revenue gap. The proposal comes after an earlier plan to eliminate the services tax exemption was rejected in February. The AAF and local ad clubs have worked to oppose these changes, because the amendment could lead to a sales tax on advertising, which would immediately harm the industry, raise overall tax costs and cause economic damage.
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N.Y., Conn. Introduce Online Advertising Bills

Legislation introduced in New York and Connecticut would impose restrictions on Web site operators who collect and use personally identifiable and anonymous information for advertising. In New York, Assembly Bill 9275, introduced by Rep. Richard Brodsky, D-Westchester, would penalize Web companies who use personal information about consumers for advertising without their consent. In Connecticut, House Bill 5765 would require third party network advertisers to post a notice on its Web site of its data collection and use practices. The AAF opposes both bills, because absent any demonstrable consumer harm or concern with Internet advertising, additional government regulation is unnecessary. We are joining with other industry groups to send letters to representatives in both states.
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