During a recent Senate committee hearing on consumer privacy, Federal Trade Commission (FTC) Chair Jon Leibowitz described “aggressive” efforts the agency has undertaken to protect children’s online privacy. He referred to actions taken over the past decade against website operators that collected information from children without parental consent, as required by federal law. Among the companies that agreed to pay fines and change their practices were Hershey Foods Corp., Mrs. Fields Famous Brands, Inc. and American Pop Corn Co., which allegedly failed to comply with the law when engaging children in online games and birthday-related activities. Leibowitz also noted that FTC plans to release a report later this year reflecting input from a number of stakeholder roundtables on privacy protection in an environment of new technologies and business models. According to Leibowitz, the commission is now conducting a comprehensive review of its parental notice rule “in light of changing technology,…
Category Archives Federal Trade Commission
The Federal Trade Commission (FTC) has announced a settlement with Nestlé HealthCare Nutrition, Inc., which the agency contends has deceptively marketed a children’s drink, BOOST Kid Essentials®, as a product clinically shown to reduce illness in children by strengthening the immune system and helping them recover more quickly from diarrhea. The beverage, intended for children ages 1 to 13, contains probiotics embedded in a straw that was “prominently featured in ads for the product.” According to the FTC, the company has agreed to stop making health-related claims about cold or flu viruses “unless the claim is approved by the Food and Drug Administration.” The company has also agreed to cease making claims about diarrhea and reduced absences from day care or school “unless the representation is non-misleading and, at the time of making such representation, the [company] possesses and relies upon competent and reliable scientific evidence that substantiates that the…
U.S. Senator Chuck Schumer (D-N.Y.) has asked the Federal Trade Commission (FTC) to investigate the marketing of certain caffeinated malt beverages that “seem to be explicitly designed to attract underage drinkers” and to determine whether new enforcement actions are warranted. In a July 12, 2010, press release, Schumer singled out popular drinks “that appear hip with flashy colors and funky designs” but contain 12 percent alcohol, which is more than twice the amount in a bottle of beer or glass of wine. “However, the labeling and packaging of these beverages renders them nearly indistinguishable from ordinary energy drinks,” Schumer said. “Some stores even stock them directly next to other energy drinks causing further confusion for legal and illegal consumers.” Schumer called the marketing “extremely troubling” in a letter to FTC Chair Jon Leibowitz. “Frankly, it looks to me as if manufacturers are trying to mislead adults and business owners who…
The Federal Trade Commission (FTC) recently took action on the divestiture of certain Whole Foods Market Inc.’s assets as part of the consent order that concluded antitrust litigation the agency brought to challenge Whole Foods’ 2007 acquisition of Wild Oats Market, Inc. According to an FTC news release, the Whole Foods divestiture trustee sought approval to sell three Wild Oats stores and certain intellectual property. FTC commissioners approved the sale of Wild Oats stores in Kansas City, Missouri; Boulder, Colorado; and Portland, Maine. While allowing the sale of Wild Oats’ and Alfalfa Markets’ intellectual property to proceed as to Luberski, Inc., and A-M Holdings, LLC, the FTC denied a proposal to sell their intellectual property to Topco Associates LLC, apparently finding that this sale would not satisfy the purposes of intellectual property divestiture. See FTC Press Release, June 18, 2010; Naturalproductsmarketplace.com, June 21, 2010.
The Federal Trade Commission (FTC) has announced that it is submitting to the Office of Management and Budget its intention to study consumer susceptibility to fraudulent and deceptive marketing. The commission plans to conduct an “economic laboratory experiment” with 250 subjects to better target its enforcement actions and consumer education initiatives, and to improve future fraud surveys. The study, which will be conducted by a George Mason University faculty member, was previously announced but failed to generate any public comments. FTC plans to study whether ”several decision-making biases, such as impulsivity, over-optimism, and loss aversion, that can cause inaccurate assessments of the risks, costs, and benefits of various choices,” are related to consumers’ vulnerability to unfair and deceptive marketing claims. The commission will study the subjects’ assessment of potentially deceptive and non-deceptive advertisements and their ability to differentiate between seemingly fraudulent and legitimate advertisements. FTC requests public comments by July…
The Federal Trade Commission (FTC) last week announced that Kellogg Co. has agreed to resolve an “investigation into questionable immunity-related claims for Rice Krispies cereal.” The agreement reopens a prior order involving Kellogg’s® Frosted Mini-Wheats®; the FTC will now require “substantiation for all health claims for any food” based on “competent and reliable scientific evidence,” defined as “tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and are generally accepted in the profession to yield accurate and reliable results.” According to the concurring statement of Commissioner Julie Brill and FTC Chair Jon Leibowitz, the company was “developing its questionable Rice Krispies campaign last year [while] it was simultaneously negotiating with the FTC to resolve earlier allegations that the company had deceptively marketed Frosted Mini-Wheats as improving children’s attentiveness.” The concurring statement also notes, “What is particularly disconcerting to us is that at…
The Federal Trade Commission (FTC) has announced its intention to issue compulsory process orders to 48 food and beverage manufacturers, distributors, marketers, and quick service restaurant companies for information on their marketing activities and expenditures targeted toward children and adolescents. FTC also seeks nutritional information about the companies’ food and beverage products marketed to children and adolescents in calendar years 2006 and 2009 “to evaluate possible changes in the nutritional content and variety of youth-marketed foods.” The plan follows FTC’s July 2008 report that analyzed expenditures and promotional activities related to food and food products targeted toward children and adolescents in 2006. FTC wants to use the new data to study how industry allocates promotional activities and expenditures among various media and for different food products and to evaluate the impact of self-regulatory efforts on the nutritional profiles of foods marketed to children and adolescents. Based on the calendar year…
The Center for Digital Democracy and the Berkeley Media Studies Group have released a report, “Alcohol Marketing in the Digital Age,” that discusses some of the specific ways that alcohol beverage companies are conducting contemporary advertising campaigns using digital media, data collection, behavioral targeting, social media, and online gaming and video that allegedly appeal to underage youth. The report, which was reportedly submitted to the Federal Trade Commission (FTC), calls on that agency, as well as the state attorneys general, to “investigate the data collection, online profiling, and targeting practices of alcohol beverage companies online, including social media data-mining technologies. The FTC and other regulators need to determine whether alcohol beverage ad targeting is reaching specific young people and their networks.” While the report notes that beer and alcohol companies have “a self-regulatory code of ethics that includes provisions for limiting exposure to marketing messages to underage youth,” its authors…
While the president’s Task Force on Childhood Obesity released its action plan with 70 specific recommendations to significant praise and fanfare this week, nutrition professor and author Marion Nestle questioned whether the ideas will actually work given their reliance on voluntary collaboration and participation. She said in her blog, “Voluntary, as evidence demonstrates, does not work for the food industry. Much leadership will be needed to make this plan work. But these recommendations should give advocates plenty of inspiration to continue working on these issues.” First lady Michelle Obama joined several task force members when the report was issued and said, “For the first time, the nation will have goals, benchmarks, and measurable outcomes that will help us tackle the childhood obesity epidemic one child, one family, and one community at a time. We want to marshal every resource—public and private sector, mayors and governors, parents and educators, business owners…
Featuring colorful graphics purporting to hawk products ranging from sugar-sweetened cereals and acne medication to sporting goods and meals sold at fast-food restaurants, a new website created by the Federal Trade Commission’s (FTC’s) Bureau of Consumer Protection seeks to provide children with the tools they need to properly understand and assess commercial speech. Designed for children in grades four through six, the interactive game with accompanying classroom materials urges children to keep three questions in mind whenever and wherever they are exposed to advertising: Who is responsible for the ad? What is the ad really saying? What does the ad want me to do? FTC announced the website’s launch in late April 2010, and bureau director David Vladeck said that its goal is “to help kids start to understand the commercial world they live in and to be alert to, and think critically, of advertising.” Vladeck reportedly confessed that he…
