January 27, 2012

Congress Requires Cost/Benefit Analysis for Food Advertising Guides

The Omnibus Appropriations bill passed by Congress and signed into law at the end of 2011 included language putting at least a temporary halt to the Interagency Working Group’s proposed “voluntary” nutrition principles for foods marketed to children.

Specifically, the Federal Trade Commission is prohibited from expending any funds moving forward with the principles until it complies with Executive Order 13563 issued by President Obama in January, 2011. Under the order, federal agencies are required to submit a description of the need for a regulation and an explanation of how the proposed regulation will meet that need, an assessment of the potential costs and benefits of the regulation, and an explanation of the manner in which the regulation is consistent with a statutory mandate. The Office of Information and Regulatory Affairs then reviews the proposed filing to determine whether it is consistent with applicable law.

The FTC has not publicly indicated whether or when it will submit the necessary information to the OIRA. AAF is unaware of any evidence that demonstrates a link between advertising and childhood obesity, therefore we believe that the Commission will be unable to demonstrate that the proposed guidelines will help to reduce the rates of childhood obesity. Further, AAF believes the guidelines violate the First Amendment protections for commercial free speech and would impose enormous economic costs on businesses – including food companies, agencies and the media – with no discernible benefits.

Ad Industry Educates Consumers About Interest Based Advertising

On January 20, the AAF and Digital Advertising Alliance announced a major new consumer education campaign to inform the public about Your AdChoices, the industry self-regulatory program for interest based advertising. The campaign is designed to educate consumers about interest based advertising and how they can take greater control of their online privacy.

The campaign includes banner ads, a new website www.youradchoices.com, and a series of educational videos.

Many AAF corporate members use the AdChoices icon. AAF is currently planning a webinar designed to educate smaller and local businesses on how they can participate in this important industry initiative. Look for details of the webinar to be announced soon.

ICANN Moves Ahead, Industry Offers Possible Solution

Despite numerous calls for delay from industry, non-profits, lawmakers and law enforcement officials, on January 12 the Internet Corporation for Assigned Names and Numbers (ICANN) began accepting applications for new top level domains. AAF and other members of the Coalition for Responsible Internet Domain Oversight (CRIDO) will soon contact ICANN and the Department of Commerce with a proposal to move forward that would allow ICANN to continue to accept applications yet provide reasonable protections for brand owners. Look for more on the proposal in the next Government Report.

Maryland Governor Proposes Digital Services Tax

Maryland Governor Martin O’Malley (D) has released a budget proposal that would impose a tax on certain digital goods and services. As written, the proposal could be interpreted to include many business-to-business transactions, including advertising. AAF-Baltimore is among the organizations taking the lead in working to clarify that advertising will not become a taxable service.