Wendy Davis, May 17, 2010 10:12 PM
Consumer watchdogs are questioning whether alcohol companies inappropriately target Web users under age 21 via online video, games, social media and other digital platforms.
"Today, alcohol brands (like other major advertisers) are promoting their products across a wide spectrum of new platforms -- from social networks to mobile phones to immersive, virtual communities," the groups state in a new report that details how alcohol companies are using online social games, viral video ads and other digital marketing techniques.
The report, by American University professor Kathryn Montgomery, Center for Digital Democracy director Jeff Chester, and Berkeley Media Studies Group's Lori Dorfman, calls for the Federal Trade Commission to investigate the use of digital marketing by alcohol companies. The groups are specifically urging the FTC and state attorneys general to probe whether liquor companies are using behavioral targeting techniques -- including creating profiles of Web users -- to reach users who aren't yet legally allowed to drink.
"The FTC and other regulators need to determine whether alcohol beverage ad targeting is reaching specific young people and their networks, providing a complete picture of the industry's online data collection practices -- including whether their privacy policies are accurate," the report states.
Currently, alcohol industry self-regulatory standards call for ads to run in media where at least 70% of the audience are adults over 21. But the watchdogs say that such standards are outdated in the age of YouTube, when clips that go viral -- like Smirnoff's Tea Partay -- draw millions of hits. "Marketing is now fully integrated into daily communications and social relationships, not cordoned off in a special category of 'advertising,'" the report states.
The report also faults alcohol companies for using online age verification procedures that rely on people entering their birthdates -- a system that youngsters can bypass by providing a fake date.
Johns Hopkins associate professor David Jernigan says the study raises troubling issues. "Internet marketing immerses the audience in a world that has a single message -- and the message in this case is: It's good to drink," he says. "We need the FTC to use its power and, failing that, for the state attorneys general to use their power to start inquiring about what the industry is doing."
The self-regulatory group Distilled Spirits Council of the U.S. says that member companies "adhere to a rigorous set of content and placement guidelines for advertising and marketing materials in all media including online and digital communications channels." The organization adds that the industry's "longstanding commitment to responsible advertising regardless of the medium has been commended by the FTC and industry watchdogs."
Tuesday, May 18, 2010
Wednesday, May 12, 2010
Google-AdMob Deal Gets Extended Federal Review
SAN FRANCISCO — Google may have gotten some help from its rival Apple in its attempt to acquire the mobile advertising start-up AdMob.
The Federal Trade Commission got a two-week extension from Google and AdMob for its review of Google’s $750 million acquisition, according to two people briefed on the review process. The agency wants to use the additional time, in part, to better understand the competitive effects of Apple’s purchase of Quattro Wireless, an AdMob rival, and Apple’s impending introduction of its new iAds mobile advertising system, these people said.
Under the F.T.C.’s initial agreement with Google and AdMob, the review period was set to expire last Monday. A decision on the deal could come as soon as Friday.
According to several people briefed on the investigation, the F.T.C. has been leaning toward opposing the deal, reasoning that it would substantially diminish competition in the nascent market for advertising on mobile phones.
But the F.T.C. also must evaluate whether a strong second player in the market — Apple — would significantly change the competitive landscape and make it easier, or more difficult, for smaller players to gain entry. Google executives have pointed to Apple’s entry into the mobile ad market as a sign that the business is competitive.
One factor that could be complicating the F.T.C.’s review, said a person briefed on the process, is Apple’s famous reluctance — even with federal regulators — to open up about its business plans. It is unclear what kind of effect that the iAds system, which Steven P. Jobs, Apple’s chief executive, unveiled last month along with new software for the iPhone, could have on the overall mobile ad market. Apple’s iAds, unlike mobile ads from Google and AdMob, will appear only on the iPhone, and the system will cater exclusively to high-end advertisers, at least at first.
A representative for Google did not immediately return requests for comment, and an Apple spokesman declined to comment.
The F.T.C. and the Justice Department have begun a discussion over who will lead an inquiry into Apple’s restrictions on the terms of service for developers of the iPhone.
Another person briefed on the F.T.C.’s deliberations said that the agency’s decision on Google’s acquisition of AdMob “would have been much easier without Apple and its new ad system and terms of service provisions.”
As the F.T.C. decision approaches, battle lines are forming, with each party trying to marshal public support for its position. In the last two weeks, several prominent technology bloggers have written that the agency would be shortsighted to block Google’s activities in such a new market.
On the other hand, Martin Sorrell, chief executive of WPP, one of the world’s largest advertising groups, told the news agency Reuters on Monday that the investigation “should be rigorous” and that the F.T.C.’s review of Google’s acquisition of DoubleClick in 2007 was not “deep enough or strong enough.”
By Brad Stone
The Federal Trade Commission got a two-week extension from Google and AdMob for its review of Google’s $750 million acquisition, according to two people briefed on the review process. The agency wants to use the additional time, in part, to better understand the competitive effects of Apple’s purchase of Quattro Wireless, an AdMob rival, and Apple’s impending introduction of its new iAds mobile advertising system, these people said.
Under the F.T.C.’s initial agreement with Google and AdMob, the review period was set to expire last Monday. A decision on the deal could come as soon as Friday.
According to several people briefed on the investigation, the F.T.C. has been leaning toward opposing the deal, reasoning that it would substantially diminish competition in the nascent market for advertising on mobile phones.
But the F.T.C. also must evaluate whether a strong second player in the market — Apple — would significantly change the competitive landscape and make it easier, or more difficult, for smaller players to gain entry. Google executives have pointed to Apple’s entry into the mobile ad market as a sign that the business is competitive.
One factor that could be complicating the F.T.C.’s review, said a person briefed on the process, is Apple’s famous reluctance — even with federal regulators — to open up about its business plans. It is unclear what kind of effect that the iAds system, which Steven P. Jobs, Apple’s chief executive, unveiled last month along with new software for the iPhone, could have on the overall mobile ad market. Apple’s iAds, unlike mobile ads from Google and AdMob, will appear only on the iPhone, and the system will cater exclusively to high-end advertisers, at least at first.
A representative for Google did not immediately return requests for comment, and an Apple spokesman declined to comment.
The F.T.C. and the Justice Department have begun a discussion over who will lead an inquiry into Apple’s restrictions on the terms of service for developers of the iPhone.
Another person briefed on the F.T.C.’s deliberations said that the agency’s decision on Google’s acquisition of AdMob “would have been much easier without Apple and its new ad system and terms of service provisions.”
As the F.T.C. decision approaches, battle lines are forming, with each party trying to marshal public support for its position. In the last two weeks, several prominent technology bloggers have written that the agency would be shortsighted to block Google’s activities in such a new market.
On the other hand, Martin Sorrell, chief executive of WPP, one of the world’s largest advertising groups, told the news agency Reuters on Monday that the investigation “should be rigorous” and that the F.T.C.’s review of Google’s acquisition of DoubleClick in 2007 was not “deep enough or strong enough.”
By Brad Stone
Tuesday, May 11, 2010
FDA Asked To Restrict Drug Marketers' Use Of Social Media
If pharmaceutical companies can't adequately explain the risks of drugs in 140 characters, they shouldn't be allowed to use Twitter to advertise. That's according to the consumer advocacy group Center for Digital Democracy, which on Monday asked the Food and Drug Administration to preserve current policies on drug marketing even if they hinder the use of social media.
"Current FDA guidance on the presentation of risk information should not be compromised to the detriment of public health in favor of accommodating recent developments in online product promotion," the CDD writes. The group adds that if services like Twitter, which impose limits on posts, leave companies "unable to satisfy basic consumer-protective measures such as the fair balance requirement," those services are inappropriate for drug marketing.
The CDD also says that drug companies should not advertise in a host of digital platforms -- including email and social networking boards operated by third parties. "The only legitimate use of such tools to communicate directly with consumers is via a company's own website, and only with adherence to full 'fair and balanced' information rules," the group writes.
While the FDA probably isn't likely to ban direct-to-consumer ads, the agency could well decide that it's inappropriate to pair a drug name with a particular condition when space is too limited to describe the potential side effects, says Rebecca Tushnet, a law professor at Georgetown and expert in false advertising law.
But, she adds, even if space is short, companies might still be able to use so-called "reminder ads," which typically give the name of products but not the ailments they treat. "In the non-Twitter context, people have solved this problem with the reminder ads," she says. "In theory, it seems like that approach could still work."
The FDA recently held hearings addressing drug companies' use of social media and other online platforms to advertise. Last year, the agency told 14 large pharmaceutical companies that their search ads were misleading because the ad copy touted the benefits of drugs without also informing consumers about risks and contraindications. Drug companies immediately revamped their search strategies, both by curtailing the use of search ads and by revising the content of the ads. Now, when drug companies buy keywords to describe medical conditions, many no longer include the brand name in the ad copy or URL.
by Wendy Davis
"Current FDA guidance on the presentation of risk information should not be compromised to the detriment of public health in favor of accommodating recent developments in online product promotion," the CDD writes. The group adds that if services like Twitter, which impose limits on posts, leave companies "unable to satisfy basic consumer-protective measures such as the fair balance requirement," those services are inappropriate for drug marketing.
The CDD also says that drug companies should not advertise in a host of digital platforms -- including email and social networking boards operated by third parties. "The only legitimate use of such tools to communicate directly with consumers is via a company's own website, and only with adherence to full 'fair and balanced' information rules," the group writes.
While the FDA probably isn't likely to ban direct-to-consumer ads, the agency could well decide that it's inappropriate to pair a drug name with a particular condition when space is too limited to describe the potential side effects, says Rebecca Tushnet, a law professor at Georgetown and expert in false advertising law.
But, she adds, even if space is short, companies might still be able to use so-called "reminder ads," which typically give the name of products but not the ailments they treat. "In the non-Twitter context, people have solved this problem with the reminder ads," she says. "In theory, it seems like that approach could still work."
The FDA recently held hearings addressing drug companies' use of social media and other online platforms to advertise. Last year, the agency told 14 large pharmaceutical companies that their search ads were misleading because the ad copy touted the benefits of drugs without also informing consumers about risks and contraindications. Drug companies immediately revamped their search strategies, both by curtailing the use of search ads and by revising the content of the ads. Now, when drug companies buy keywords to describe medical conditions, many no longer include the brand name in the ad copy or URL.
by Wendy Davis
Friday, May 7, 2010
FCC Chair Cites 'Third Way' For Neutrality
Moving to reassert authority over broadband, Federal Communications Commission Chairman Julius Genachowski on Thursday put forward a plan to subject Internet service providers to the common carrier regulations that have long governed telephone companies.
Specifically, Genachowski proposed reclassifying broadband transmission as a telecommunications service under Title II of the Telecommunications Act. Doing so would allow the FCC to issue neutrality rules banning providers from discriminating against particular sites or applications by either degrading or prioritizing traffic.
At the same time, Genachowski also proposed that the FCC apply only a few of Title II's provisions while agreeing to forbear from terms "that are unnecessary and inappropriate for broadband access service."
Among the provisions that would not be applied are unbundling requirements, which means that Internet service providers would not have to share lines with competitors. The proposal also wouldn't affect components of broadband other than transmission, including Internet content like Google's search results.
Calling the potential reclassification a "restrained approach," Genachowski said it marked a "third way" between burdensome rules and a laissez-faire attitude.
"Heavy-handed prescriptive regulation can chill investment and innovation, and a do-nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation," Genachowski said in a statement.
But the two Republican Commissioners, Robert McDowell and Meredith Baker, condemned the proposal as a "stark departure from the long-established bipartisan framework for addressing broadband regulation that has led to billions in investment and untold consumer opportunities."
They also warned that the proposal puts the FCC's credibility at risk. "Government agencies simply cannot create new legal powers beyond those granted by Congress," they said in a joint statement.
Genachowski's proposal was triggered by last month's court decision in the Comcast case. The U.S. Court of Appeals for the District of Columbia Circuit ruled in that case that the FCC had no authority to sanction Comcast for violating neutrality principles because the agency had power to regulate "information" services subject to Title I.
That decision left the FCC without the power to issue neutrality regulations unless it also reclassified broadband as a Title II service.
In the four weeks since the court issued the Comcast ruling, consumer advocates strongly urged the FCC to reclassify broadband as a Title II service. Telecoms and cable companies, for their part, said they believed a reclassification would be illegal and vowed litigation. Public Knowledge, which had used for reclassification, said it was "generally pleased" with Genachowski's plan, but took issue with the decision to refrain from requiring ISPs to share their lines. "Line sharing is a crucial method to ensuring the long-term vibrancy of the broadband market and to providing more choices for consumers," president Gigi Sohn said in a statement.
Not surprisingly, some ISPs criticized the initiative. Verizon's Tom Tauke, executive vice president of public affairs, policy and communications, called Genachowski's plan "legally unsupported" and indicated the company would challenge any reclassification in court. "The regulatory and judicial proceedings that will ensue can only bring confusion and delay to the important work of continuing to build the nation's broadband future," Tauke said in a statement.
AT&T also condemned the move, saying it was "without legal basis."
Comcast issued a more restrained response. "While we are disappointed with the inclination not to lean in favor of Title I regulation, we are prepared to work constructively with the Commission to determine whether there is a 'third way' approach that allows the Commission to take limited but effective measures to preserve an open Internet and implement critical features of the National Broadband Plan, but does not cast the kind of regulatory cloud that would chill investment and innovation by ISPs."
Specifically, Genachowski proposed reclassifying broadband transmission as a telecommunications service under Title II of the Telecommunications Act. Doing so would allow the FCC to issue neutrality rules banning providers from discriminating against particular sites or applications by either degrading or prioritizing traffic.
At the same time, Genachowski also proposed that the FCC apply only a few of Title II's provisions while agreeing to forbear from terms "that are unnecessary and inappropriate for broadband access service."
Among the provisions that would not be applied are unbundling requirements, which means that Internet service providers would not have to share lines with competitors. The proposal also wouldn't affect components of broadband other than transmission, including Internet content like Google's search results.
Calling the potential reclassification a "restrained approach," Genachowski said it marked a "third way" between burdensome rules and a laissez-faire attitude.
"Heavy-handed prescriptive regulation can chill investment and innovation, and a do-nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation," Genachowski said in a statement.
But the two Republican Commissioners, Robert McDowell and Meredith Baker, condemned the proposal as a "stark departure from the long-established bipartisan framework for addressing broadband regulation that has led to billions in investment and untold consumer opportunities."
They also warned that the proposal puts the FCC's credibility at risk. "Government agencies simply cannot create new legal powers beyond those granted by Congress," they said in a joint statement.
Genachowski's proposal was triggered by last month's court decision in the Comcast case. The U.S. Court of Appeals for the District of Columbia Circuit ruled in that case that the FCC had no authority to sanction Comcast for violating neutrality principles because the agency had power to regulate "information" services subject to Title I.
That decision left the FCC without the power to issue neutrality regulations unless it also reclassified broadband as a Title II service.
In the four weeks since the court issued the Comcast ruling, consumer advocates strongly urged the FCC to reclassify broadband as a Title II service. Telecoms and cable companies, for their part, said they believed a reclassification would be illegal and vowed litigation. Public Knowledge, which had used for reclassification, said it was "generally pleased" with Genachowski's plan, but took issue with the decision to refrain from requiring ISPs to share their lines. "Line sharing is a crucial method to ensuring the long-term vibrancy of the broadband market and to providing more choices for consumers," president Gigi Sohn said in a statement.
Not surprisingly, some ISPs criticized the initiative. Verizon's Tom Tauke, executive vice president of public affairs, policy and communications, called Genachowski's plan "legally unsupported" and indicated the company would challenge any reclassification in court. "The regulatory and judicial proceedings that will ensue can only bring confusion and delay to the important work of continuing to build the nation's broadband future," Tauke said in a statement.
AT&T also condemned the move, saying it was "without legal basis."
Comcast issued a more restrained response. "While we are disappointed with the inclination not to lean in favor of Title I regulation, we are prepared to work constructively with the Commission to determine whether there is a 'third way' approach that allows the Commission to take limited but effective measures to preserve an open Internet and implement critical features of the National Broadband Plan, but does not cast the kind of regulatory cloud that would chill investment and innovation by ISPs."
Wednesday, May 5, 2010
Privacy Bill? or Invasion of Privacy? - THE HOUSE OF REPRESENTATIVES
You decide? See the draft of privacy legislation that would require online ad networks to obtain people's consent before using data about them.
Tuesday, May 4, 2010
Boucher To Release Privacy Bill
By Juliana Gruenwald
Ahead of the expected release Tuesday of a House privacy bill, a group of public interest and privacy groups wrote House members Monday calling on them to support the inclusion of principles aimed at giving consumers more control over their personal information.
House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., is expected to release his long awaited data privacy bill Tuesday. The legislation is expected to address concerns about consumer privacy given the growing use of online behavioral advertising, which involves using data about a consumer's Web surfing habits to target ads to them. Boucher detailed the bill's provisions Monday during a speech at the American Business Media's annual conference in Charleston, S.C. According to a news release from the group, Boucher said the bill would apply to the collection of personal information from consumers both online and offline and "initially require that all Web sites that collect information from consumers give consumers notice with respect to what information is collected, how it is used, who it is shared with, and the circumstances under which it is shared.
It added that Boucher said it would require firms to allow consumers to "opt out" of having such information collected, which means that firms would be allowed to collect and use data unless consumers specifically request that it not be collected. He said unaffiliated third-party Web sites that "gather information from consumers across multiple unaffiliated Web sites" would be required to gain specific consent from consumers before using and collecting data from them, as would those who seek to use senstive personal information such as medical or financial data.
Boucher's spokeswoman did not return a call seeking comment on the American Business Media report. Jeff Chester, executive director of the Center for Digital Democracy, said if the report is accurate it is "a blow to consumer protection."
Chester's group and 10 others wrote House lawmakers saying that privacy legislation should include the Fair Information Principles, which allow consumers to "control their personal information, help to protect human dignity, hold accountable organizations that collect personal data, promote good business practices, and limit the risk of identity theft." In addition to these, they also called on lawmakers to ensure that data used in online behavioral advertising cannot be linked to an individual's name or address and also can't be linked to them through an Internet protocol address, cookie or other identifier.
In addition, the groups called for ensuring that sensitive information, which the FTC should define, such as health or financial records cannot be used for behavioral advertising; Websites should only be able to use data for behavioral advertising within 24 hours after obtaining consent to use it; Web sites should tell users what they plan to use the data for at the time it is collected; and allow users to find out which online firms have data about them, to see the data and correct it if necessary.
"Companies engaged in behavioral targeting routinely monitor individuals, the searches they make, the Web pages they visit, the content they view, their interactions on social networking sites, the content of their emails, and the products and services they purchase," according to the letter also signed by such groups as the Consumer Federation of America, Electronic Frontier Foundation, Privacy Rights Clearinghouse and the U.S. Public Interest Research Group. They added that "Consumers have rights, and profiling should have limits."
Mike Zaneis, vice president of public policy for the Interactive Advertising Bureau, noted the industry has taken steps to ensure online advertisers provide consumers with "enhanced consumer notice." He said he hopes the legislation would follow the FTC in allowing for a "strong first-party carve out" from behavioral advertising restrictions.
"We are seeing a tremendous amount of innovation in this space and we hope that any legislation will not be overly proscriptive, but rather allow industry the flexibility to innovate and discover new and more effective ways of providing consumer notice," Zaneis said.
Ahead of the expected release Tuesday of a House privacy bill, a group of public interest and privacy groups wrote House members Monday calling on them to support the inclusion of principles aimed at giving consumers more control over their personal information.
House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., is expected to release his long awaited data privacy bill Tuesday. The legislation is expected to address concerns about consumer privacy given the growing use of online behavioral advertising, which involves using data about a consumer's Web surfing habits to target ads to them. Boucher detailed the bill's provisions Monday during a speech at the American Business Media's annual conference in Charleston, S.C. According to a news release from the group, Boucher said the bill would apply to the collection of personal information from consumers both online and offline and "initially require that all Web sites that collect information from consumers give consumers notice with respect to what information is collected, how it is used, who it is shared with, and the circumstances under which it is shared.
It added that Boucher said it would require firms to allow consumers to "opt out" of having such information collected, which means that firms would be allowed to collect and use data unless consumers specifically request that it not be collected. He said unaffiliated third-party Web sites that "gather information from consumers across multiple unaffiliated Web sites" would be required to gain specific consent from consumers before using and collecting data from them, as would those who seek to use senstive personal information such as medical or financial data.
Boucher's spokeswoman did not return a call seeking comment on the American Business Media report. Jeff Chester, executive director of the Center for Digital Democracy, said if the report is accurate it is "a blow to consumer protection."
Chester's group and 10 others wrote House lawmakers saying that privacy legislation should include the Fair Information Principles, which allow consumers to "control their personal information, help to protect human dignity, hold accountable organizations that collect personal data, promote good business practices, and limit the risk of identity theft." In addition to these, they also called on lawmakers to ensure that data used in online behavioral advertising cannot be linked to an individual's name or address and also can't be linked to them through an Internet protocol address, cookie or other identifier.
In addition, the groups called for ensuring that sensitive information, which the FTC should define, such as health or financial records cannot be used for behavioral advertising; Websites should only be able to use data for behavioral advertising within 24 hours after obtaining consent to use it; Web sites should tell users what they plan to use the data for at the time it is collected; and allow users to find out which online firms have data about them, to see the data and correct it if necessary.
"Companies engaged in behavioral targeting routinely monitor individuals, the searches they make, the Web pages they visit, the content they view, their interactions on social networking sites, the content of their emails, and the products and services they purchase," according to the letter also signed by such groups as the Consumer Federation of America, Electronic Frontier Foundation, Privacy Rights Clearinghouse and the U.S. Public Interest Research Group. They added that "Consumers have rights, and profiling should have limits."
Mike Zaneis, vice president of public policy for the Interactive Advertising Bureau, noted the industry has taken steps to ensure online advertisers provide consumers with "enhanced consumer notice." He said he hopes the legislation would follow the FTC in allowing for a "strong first-party carve out" from behavioral advertising restrictions.
"We are seeing a tremendous amount of innovation in this space and we hope that any legislation will not be overly proscriptive, but rather allow industry the flexibility to innovate and discover new and more effective ways of providing consumer notice," Zaneis said.
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