Advocates, Industry Spar Over Potential FTC Social Media Rules

The FTC collected comments through Friday on topics discussed at an agency event in October. The agency is planning to expand definitions for online influencers and set rules for prohibiting manipulation of consumer reviews, omission of bad reviews and buying fake reviews (see 2207250036).

The FTC already requires “rigorous disclosure” for all audiences, and other laws and self-regulatory bodies exist to help monitor advertising, said NCTA. The association highlighted FTC Act Section 5, FTC rules under the Children Online Privacy Protection Act (COPPA), the Children's Advertising Review Unit’s (CARU) ad guidelines, the Children’s Television Act and the FCC’s Children’s TV Programming Rules, all of which “create a scaffolding for children as they make their way through digital environments.” CARU’s self-regulatory program is “particularly expert and effective in providing substantial industry oversight and protection for children in the digital marketplace,” including the blurred lines between ad and entertainment content, the filing said. NCTA suggested the FTC issue a report highlighting best practices for digital marketing to children.

Advertising to children under the age of seven is “inherently misleading because children of that age are unable to recognize motives other than their own or to use that information to make decisions,” the University of California-Berkeley School of Law Consumer Protection Public Policy Order commented. Ads can contribute to child obesity, materialism and harms to self-determination, said the group. Even some forms of advertising to children up to age 11 “fall under the deceptive standard” because the blurring of lines between sponsored and non-sponsored content makes it nearly impossible to distinguish the two, said the group. It suggested the agency focus on limiting deceptive digital advertising for those age groups.

Agency policies should recognize the benefits of “free content directed toward children, as well as the creation of safe spaces for children,” said Google. Without ads to monetize content, many publishers and creators could be put out of business, particularly those focused on child-directed content, or it could lead to subscription-based models, the platform said: “Widespread subscription models for kids’ content would be problematic and inequitable; rather than an ads-supported free and open internet, they could gate content for kids and families who can’t afford to pay.” Truth in Advertising said the “nature, diversity and volume of marketing directed at children has changed significantly since the FTC last updated its Endorsement Guidelines in 2009.”

The FTC has the existing authority it needs to combat digital advertising abuse, TechFreedom commented. The agency can bring enforcement action against marketplace deception under its deceptive practices authority, and it can pursue action against privacy abuses through COPPA, said TechFreedom. Many of the abuses the agency has highlighted in its effort can be addressed through enforcement action, and the agency should “aggressively move against content creators and advertisers who either seek to hide the fact that they are luring a child into a monetary transaction without making it clear, or employing tactics that otherwise deceive children into taking actions based on their vulnerabilities,” said TechFreedom. The organization cautioned the agency against casting aside 50 years of precedent by pursuing an “entirely new regulatory system of per se prohibition for media production and delivery because of a different sense of what is ‘unfair.’”

Any broad prohibitions on ads for children and teens will raise First Amendment issues, the Toy Association commented. The association cited the Central Hudson doctrine, which requires government speech restrictions on legal speech to advance “substantial government interest,” directly advance that interest and “not be more extensive than is necessary to serve that interest.” Harms involving “pestering parents, increased consumption or materialism hardly qualify as a substantial government interest under Central Hudson,” the association said.