Good morning. Thank you for the opportunity to discuss marketing and advertising to children.(1) The Commission places a high priority on combating deceptive and unfair practices that harm children. Yet, our enforcement efforts in this area often raise difficult questions about the appropriate role of government and the nature of the relief that we can impose. Marketing and advertising to children touch on several different FTC issues. I'll try to walk you through these with a brief introduction to the Commission's deception and unfairness enforcement authority and then highlight some of the hot topics in children's advertising at the FTC.
Deception and Unfairness Authority
Section 5 of the Federal Trade Commission Act ("FTC Act") prohibits both unfair and deceptive acts or practices in or affecting commerce.(2) The FTC's deception standard is set forth in the Commission's Deception Policy Statement.(3) It asks whether the challenged representation or practice is one that would likely deceive a consumer acting reasonably under the circumstances in a material way -- that is, in a way that affects the consumer's conduct or choice regarding a product or service. In assessing advertising or other marketing practices that affect or are directed primarily to a particular audience, the Commission considers the effect of the ad or practice on that audience.(4) Thus, our examination of children's advertising takes into account the limited ability of children to detect exaggerated or untrue statements.(5) An interpretation that might not be reasonable for an adult may well be reasonable from the perspective of a child. Claims tend to be taken literally by young children. Depictions of a toy ballerina standing alone and twirling may reasonably be understood by children to mean that the ballerina can really dance by herself.(6) A child who sees an ad showing a fully assembled toy helicopter reasonably may believe that it comes that way right out of the box, so the Commission requires a disclosure if significant assembly is needed.(7)
We can also challenge unfair acts and practices under the FTC Act -- those that cause or are likely to cause substantial injury to consumers when that injury is not reasonably avoidable by the consumers themselves and is not outweighed by countervailing benefits to consumers or competition.(8) Although injury must be both substantial and likely, unwarranted health or safety risks can suffice. For example, the distribution of free sample razor blades without protective packaging in home-delivered newspapers poses a direct risk of injury to young children and others who might handle the papers.(9)
In assessing whether injury is reasonably avoidable, the Commission looks at how susceptible the affected audience may be to the act or practice in question. Children tend to imitate other children and they often lack the ability to foresee and avoid dangers. Thus, ads that show young children engaging in potentially hazardous activities, such as cooking hot foods or using a blowdryer next to a bathroom sink filled with water, are unfair even though adults might reasonably avoid injury when engaging in similar activities.(10)
The Commission has a variety of tools available to it to attempt to prevent future harm to consumers, including law enforcement actions in federal court or before an administrative law judge, issuing rules or guidelines, and consumer education. Court or administrative orders sought by the Commission prohibit deceptive or unfair claims and almost always impose "fencing-in" relief that covers claims or products beyond those that were the subject of the complaint. In appropriate cases, disclosures may be required to correct or prevent deception. Corrective advertising is warranted in the rare case in which the challenged ads substantially contributed to the development and maintenance of a false belief that lingers in the minds of a substantial portion of consumers.(11)
The Commission also may seek redress for consumers or disgorgement in cases involving dishonest and fraudulent conduct. For instance, a Commission consent order issued last year required a toy manufacturer to refund to consumers the purchase price of toy vehicles deceptively shown in television ads performing such feats as driving and flying under their own power.(12) In fact, the toys did not have these capabilities and were manipulated off-screen with wires and other hidden devices to make them appear to be moving. As fencing-in relief, the Commission also required the company to send a letter to every television station that aired the commercials, advising them of the settlement and of the availability of self-regulatory guidelines used by many industry members to screen advertising directed to children.
Once a Commission order is in effect, violations of the order may result in the imposition of civil penalties. Last year, a major toy manufacturer agreed to pay $280,000 in civil penalties to settle charges that it violated a Commission consent order by misrepresenting that children could use a "Colorblaster" paint sprayer toy with little or no effort.(13)
In assessing appropriate remedies for unfair or deceptive practices in advertising to children, we cannot overlook the First Amendment. We've all heard the phrase from our parents or told our own children: "If you can't say something nice, don't say anything at all." While this is a good standard for raising polite children, it is not the standard for speech in a free society.
As the Supreme Court recently reaffirmed in 44 Liquormart,(14) Central Hudson remains the standard for assessing whether restrictions on commercial speech are permissible under the First Amendment.(15) Under the Central Hudson standard for commercial speech, neither deceptive speech nor speech that proposes an illegal transaction is protected by the First Amendment.(16) A restriction on commercial speech that is not misleading and concerns lawful activity must pass three additional tests: the asserted governmental interest in the speech restriction must be substantial; the restriction must directly advance the governmental interest asserted; and the restriction must not be more extensive than necessary to serve that interest.(17)
Commission orders that require marketers to stop making false or unsubstantiated statements do not tread on First Amendment rights. When the Commission compels speech as part of a remedy for deception, however, the analysis becomes more complicated. Disclosures that remedy deceptive omissions of material information are correctly viewed as restraints on deceptive speech. Affirmative disclosures or corrective advertising that prevent future deception or correct past deception do not raise First Amendment concerns, unless they in fact go beyond the prevention or correction of deception.(18) Broad fencing-in remedies, for example, that compel general consumer education or other speech not directly related to the prevention of deception are unlikely to survive First Amendment scrutiny.
Restrictions on unfair advertising also are subject to First Amendment scrutiny under the Central Hudson standard. In 44 Liquormart, a plurality opinion written by Justice Stevens confirmed that, in the absence of evidence, courts cannot assume that an advertising restraint will significantly reduce consumption.(19) Instead, the government must establish a causal relationship between its speech restriction and the asserted state interest that the restriction is intended to directly advance.(20)
A restriction on unfair advertising also has to satisfy the Central Hudson requirement that a speech restriction not be more extensive than necessary to advance the asserted government interest. Both the plurality opinion and Justice O'Connor's concurring opinion in 44 Liquormart agreed that a total ban on price advertising of alcohol did not satisfy this requirement when there were other effective ways for government to achieve its goal.
The ABCs of Children's Advertising at the FTC
Now that I've given you an overview of our authority and enforcement powers, I'll turn to some of children's advertising issues causing the most concern at the Commission. As a primer, you can think of this as the "ABCs" at the FTC: A and B are for alcoholic beverages, while C covers both Camel and cyberspace.
A Controversial History
Not surprisingly, the most controversial children's advertising issues involve possible unfairness violations. The Commission's reliance on its unfairness authority to police children's advertising has a long, and some would say checkered, history. During the 1970s efforts to use unfairness as a basis for restricting children's advertising prompted considerable opposition from the advertising industry and members of Congress. In 1980, the FTC promulgated an Unfairness Policy Statement that set the parameters for the Commission's use of its unfairness doctrine by describing the Commission's injury and public policy criteria and disavowing any independent reliance on whether the challenged conduct was unethical or unscrupulous.(21)
Nonetheless, reaction to the Commission's expansive attempts at rulemaking based on theories of unfairness in the 1970s deprived the agency of a Congressional authorization for 14 years. Amendments to the FTC Act in 1980 specifically denied the Commission authority to issue any rule regarding children's advertising on the basis that the advertising constitutes an unfair act or practice.(22)These amendments also prevented the Commission for a period of three years from initiating any new rulemaking proceeding restricting commercial advertising based on unfairness,(23) and this prohibition was continued through the Commission's appropriations legislation until 1994.
During this period, the Commission very cautiously exercised its unfairness jurisdiction in law enforcement actions. Shortly after I arrived at the Commission, we accepted several consent agreements alleging that advertisements for 900-number calls unfairly induced children to make calls to cartoon characters, resulting in expensive phone bills that their parents had no reasonable way to avoid.(24) The Commission required easy-to-understand disclosures about the need to obtain parental permission and the cost of the call. We also required the call to include a preamble stating, "This telephone call costs money. If you do not have your mom or dad's permission, hang up now," during a grace period in which the call could be terminated without charge. The orders required that parents be provided with a reasonable means to avoid unauthorized calls or one-time refunds upon request for unauthorized calls by children.
Congress later expanded this relief with a broader statute, the Telephone Disclosure and Dispute Resolution Act of 1992, that directed the Commission to issue pay-per-call regulations. Among other things, the 900-Number Rule prohibits ads for non-educational, pay-per-call services directed to children under 12, requires clear and conspicuous disclosures about the need to obtain prior parental permission in ads directed to children under 18, and sets forth criteria for determining when a call is directed to a particular age group.(25) Ads are directed to a particular age group if competent and reliable evidence shows that more than 50% of the audience is composed of that age group. If such evidence is not available, other criteria include placement of the ad on a program directed to that age group, the nature of the programming in which the ad appears, and whether the ad, regardless of its location, is directed primarily at the relevant age group in terms of its subject matter, content, tone or the like. This Rule is currently under review by the Commission, and the Commission will seek public comment on any changes it proposes later this year.
After the 900-number cases, the Commission next publicly addressed its unfairness jurisdiction in 1994, when a majority of the Commission -- including me -- decided to close an investigation of whether the R.J. Reynolds Tobacco Company had engaged in unfair practices through its use of the "Joe Camel" campaign to promote Camel cigarettes. We said then that "[a]lthough it may seem intuitive to some that the Joe Camel advertising campaign would lead more children to smoke or lead children to smoke more, the evidence to support that intuition is not there."(26) As the statement said, the record did not show a link between the Joe Camel advertising campaign and increased smoking among children sufficient to justify a charge of unfairness in violation of the FTC Act.
Congress amended the FTC Act later that year to specify that an unfair act or practice is one that causes or is likely to cause substantial injury to consumers that is not reasonably avoidable and is not outweighed by countervailing benefits to consumers or competition.(27)Essentially, Congress codified the Commission's injury test for unfairness as set forth in the Unfairness Policy Statement. At the same time, Congress expressly barred the Commission from relying on public policy considerations as the primary basis for an unfairness determination.(28)
The Commission still alleges deception far more frequently than unfairness. Despite the controversial history of unfairness enforcement, it remains an important part of the Commission's consumer protection arsenal. We recently pursued unfairness allegations in several cases,(29) and it would be a mistake to underestimate the possibility of additional unfairness enforcement actions. I want to emphasize that the Commission is giving scrupulous care to applying the codified injury requirement, although in any particular case individual Commissioners may disagree as to the level of evidence needed to satisfy the requirement that an alleged unfair act or practice be "likely to cause substantial injury."
A (and B) are for Alcoholic Beverages
Last year, the Distilled Spirits Council of the United States ended its forty-year voluntary ban on liquor advertising on radio and television, precipitating a public debate about the effect of alcohol advertising on children. In response, the Chairman of the Federal Communications Commission has sought to hold hearings to inquire into whether the broadcast of distilled liquor advertising is in the public interest. The inquiry was scuttled when two of the four members of the Commission refused to support the Chairman's initiative because they believe that a memorandum of understanding between the two agencies places this issue within the FTC's jurisdiction.
As a Commissioner of the FTC, I would not presume to opine on the FCC's jurisdiction. I am confident, however, that the Federal Trade Commission has jurisdiction over deceptive or unfair advertising for alcoholic beverages and that it will exercise that jurisdiction in appropriate cases.(30) For example, in 1991 the Commission issued a consent order against the Canandaigua Wine Company for alleged deceptive marketing of Cisco, a fortified, flavored wine product.(31) The Commission charged that Cisco's packaging and advertising misrepresented that it was a low-alcohol wine cooler, despite a high alcohol content. The alleged misrepresentation resulted in alcohol poisoning of several consumers who believed the product to be low in alcohol. The order prohibited representations that Cisco is a low-alcohol, single-serving product and required other changes in marketing and packaging to distinguish the product more clearly from wine coolers.
Use of the Commission's unfairness jurisdiction to address alcoholic beverage advertising that may appear to be targeted to children requires showing that the advertising causes or is likely to cause substantial injury. The Commission testified to Congress in 1990 that the evidence of a link between advertising and alcohol consumption in general was inconclusive and failed to show a causal relationship.(32) The Commission suggested that these studies and their underlying research methodology were perhaps incapable of accurately measuring any relationship that might exist. At that time, we called for further research. Two years ago, the National Institute of Alcohol Abuse and Alcoholism issued a similar call based on a review of existing studies of the effects of alcohol advertising, promotion activities, and mass media presentations on attitudes toward drinking, actual consumption, and alcohol-related problems. According to this government agency, existing studies were inconclusive for methodological reasons and the lack of sufficient data.(33)
In my view, methodologically sound studies are the best way to determine whether and how advertising affects consumption. But the absence of reliable scientific evidence on the effect of a particular advertising campaign on consumption is not dispositive of every unfairness inquiry. The unfairness standard permits us to find that substantial injury is likely, not that it has actually occurred. We look at the entire record and consider the flaws or limitations of every piece of evidence in assessing how much weight it deserves. Direct or circumstantial evidence of an intent to target children with advertising for a product they cannot legally consume is particularly relevant to this inquiry. Alcohol advertising also poses difficult First Amendment issues because this advertising concerns behavior that is legal when directed to adults. Without evidence that a restriction on alcohol advertising will significantly reduce consumption by minors, the speech restriction may not survive First Amendment scrutiny.(34)
Self-regulation may prove an alternative way to address advertising of beer, wine, and spirits that may be especially appealing to or directed to minors. In light of the governmental interest in the effect of alcoholic beverage advertising on children, industry might wish to forestall possible "fix-it-for-you" solutions by coming up with its own fix through industry codes and self-regulatory enforcement mechanisms.
C is for Camel . . .
You might have noticed a few headlines over the past several months about the Federal Trade Commission's administrative complaint against R.J. Reynolds Tobacco Company. The complaint charges that the Joe Camel advertising campaign is an unfair practice that violates Section 5 of the FTC Act. Since the case is in litigation, over my objection, I will not answer any questions about it here. But I can describe what is already on the public record about the majority's decision to bring the case and the opposing views expressed by me and the other dissenting Commissioner.
The complaint alleges that the Joe Camel campaign was intended to make the brand attractive to younger smokers and that one of its targets was "first usual brand" smokers.(35) It also alleges that the campaign successfully appealed to children and adolescents under 18, and induced many of them to smoke or increased the risk that they would do so.(36) Additionally, it charges that, for many children and underage adolescents, the Joe Camel campaign caused or was likely to have caused them to begin smoking or to continue smoking.(37) Shortly after the campaign began, the percentage of children who smoked Camel cigarettes allegedly became larger than the percentage of adults who smoked Camels.(38) In addition, Reynolds allegedly knew or should have known that because of the themes and techniques used in the campaign it would have a substantial appeal to children and adolescents below the age of 18, not just to smokers over the age of 18.(39) Moreover, Reynolds allegedly knew or should have known that many smokers begin smoking and become regular smokers before age 18, and that by targeting first usual brand smokers the Joe Camel campaign would cause many minors to smoke Camel cigarettes.(40) The complaint alleges that consumers who smoke risk addiction and serious adverse health effects, and that many children do not comprehend the nature of the risk or seriousness of nicotine addiction or the other dangerous health effects of smoking.(41)
If the complaint allegations are proved, then the Commission seeks an order that would prevent Reynolds from advertising Camel brand cigarettes to children through the use of images or themes related or referring to Joe Camel.(42) The order also would require a ten-year public education campaign to discourage minors from smoking.(43) Other relief would include a requirement that Reynolds collect and make available to the Commission data about sales of each brand of its cigarettes to persons under the age of 18, including brand share in the underage market.(44) Additionally, corrective advertising or affirmative disclosures might be ordered if necessary or appropriate, and, if the facts are found as alleged in the complaint, the Commission might seek restitution, refunds, and other types of relief under Section 19 of the FTC Act.(45)
Commissioner Azcuenaga and I dissented from issuance of the Joe Camel complaint, because we concluded that the evidence, including evidence not before the Commission in 1994, was not sufficient to find reason to believe that the law had been violated.(46)Despite our concern for children's health and a strong intuitive link between the Joe Camel campaign and children's smoking, the information we looked at did not give us reason to believe there is a likely causal connection between the campaign and smoking by children. I also stated that it is not in the public interest for the Commission to expend its scarce resources on this litigation while other developments -- including the settlement discussions between tobacco companies and numerous states -- might largely duplicate any remedies the Commission might obtain. Indeed, the settlement reached in June between tobacco companies and state attorneys general would eliminate Joe Camel and the Marlboro Man.
Since I cannot say more about Joe Camel at this juncture, I'll take advantage of the fact that the letter C also stands for Cyberspace and I'll talk with you about advertising and marketing to children online.
. . . C is also for Cyberspace
Section 5 applies to online marketing and advertising, and the Commission has brought a number of cases involving pyramid schemes, credit repair scams, and the sale of business opportunities. None of these were directed at children, but Commission staff are actively monitoring children's advertising on the Internet and online services. I would not be surprised to see some cases involving children's online advertising down the road.
In June 1996, the Commission conducted a public workshop about Consumer Privacy -- including children's privacy -- on the Global Information Infrastructure. Technological tools for limiting children's access to sites and their ability to divulge personal information were discussed, as were various proposals for protecting children's privacy online. There was broad agreement that the elements of effective online consumer privacy protection included notice, choice, security, and access.
When it came to specific ways to accomplish these goals, however, opinions varied considerably. The Center for Media Education ("CME") and the Consumer Federation of America asked the Commission to issue guidelines for permissible industry practices for the collection and tracking of information from children online. Others urged the Commission not to take any action pending self-regulatory efforts by online marketers. The staff report on that workshop contains more detailed information, including a summary of a Commission staff survey of information practices on children's Web sites. You can find that report, and other materials about Commission activities, at our Web site (www.ftc.gov).
In June 1997, we held four additional days of hearings on Consumer Information Privacy, including the collection and use of information in computerized databases, the use of unsolicited commercial e-mail, and children's privacy online. The purpose of the second workshop was to gather new information, including surveys and other empirical data. Commission staff will consider the workshop record and the comments filed to help determine what, if any, further action to recommend in the area of online privacy protections.
Information gathered at our workshops confirms that many children's Web sites collect personal information. Online technology allows marketers to track children's behavior -- to see what sites a child visits and how long the child lingers at a site. By the use of surveys -- sometimes in the form of registration screens that must be completed to access a site or be eligible for a prize -- the site owner can collect other valuable marketing information. All of this information helps marketers identify new consumers at little additional cost, and may allow companies to target consumers very narrowly according to their individual interests.
Most children's Web sites seem to use children's information only for internal purposes, but some disseminate the information more broadly. Only a few provide notice to parents or a way for parents to limit disclosure of the information that is collected. Survey research submitted at the workshop revealed that parents care deeply about the collection and use of their children's information. According to a survey conducted by Louis Harris & Associates, 97% of parents whose children are online believe that Web sites should not collect children's real names and addresses and sell or rent that information to others. Even if children's personal information is used only within the company collecting it, 72% of the parents surveyed oppose its collection. Other attitude surveys presented at the workshop show that parents want to be empowered to be parents on the Net: to have some degree of control over what information their children may provide to others.
Workshop participants were divided over how to accomplish this. Some stressed technological solutions that may help protect children from data collection not authorized by their parents, and provide a means for obtaining consent from parents or others responsible for supervising children. A number of software blocking and filtering products are available now. Testing by an independent consumers' organization, however, shows that many of these can be circumvented and other testimony indicates that parents -- whose computer skills may lag behind those of their children -- need further education and experience to use these tools effectively.
Many workshop participants argued that self-regulation could resolve concerns about children's privacy online, combined with government enforcement against practices that violate current laws. Several industry guidelines for the collection and use of children's information have recently been announced, and efforts to educate businesses and seek compliance are underway. For example, the Children's Advertising Review Unit ("CARU") of the Council of Better Business Bureaus recently updated its voluntary Guidelines on Children's Advertising to cover marketing to children through interactive electronic media. CARU was established in 1974 by the advertising industry to promote responsible children's advertising. Its self-regulatory guidelines cover a host of concerns, including deception, taking into account children's limited capacity to evaluate the credibility of information they receive.
CARU is in the process of contacting several advertisers that U.S. consumer groups have identified as using possibly deceptive or unfair practices relating to the collection and use of information from children. According to CARU's testimony at the Commission's recent hearings, the advertisers it has contacted so far uniformly have expressed willingness to change their practices to conform with the guidelines. Failure to comply will result in enforcement through self-regulatory review, publication of decisions, and, if necessary, referral to the Federal Trade Commission.
In my view, it is important to keep in mind exactly what the FTC can and cannot do in the privacy area. We can pursue deceptive practices, such as a false representation that a site will collect information only for one purpose when in fact the site is using it in other ways. We cannot enforce against violations of an industry code unless they also are violations of the FTC Act or another statute we enforce. For example, an explicit claim that a marketer complies with a particular industry code, when in fact it does not, would violate the FTC Act.(47)
We also can pursue unfair practices as defined by the FTC Act. Testimony at the workshop shows that the collection and dissemination of personally identifiable information from children can expose them to being targeted by predators. There are safety risks involved in online activities that encourage children to provide their full names, street addresses, or E-mail addresses in a way that is accessible to other persons. Some forms of collection and dissemination of children's personal information, without adequate safeguards, might be challenged successfully under the FTC Act as unfair practices based on a likelihood of serious harm to children.
For a more detailed discussion of how the FTC Act applies to online collection and use of information from children, I suggest you take a look at the letter our staff released last week in response to a petition filed by CME. CME asked the Commission to investigate alleged deceptive and unfair practices of "KidsCom," a children's Web site that uses an online survey and an e-mail pen pal program. The staff response outlines several principles that the staff believes should generally apply to the online collection of personally identifiable information from children. The staff concludes that it is a deceptive practice to represent that information is being collected for one purpose when it will also be used for another purpose that parents would find material, unless there is a clear and prominent notice to a parent. The letter also states that it likely is an unfair practice to collect personally identifiable information from children and sell or disclose that information without providing parents with notice and an opportunity to control its collection and use. According to FTC staff, an adequate notice should include: who is collecting the personally identifiable information, its intended use or uses, to whom and in what form it will be disclosed to third parties, and how parents may prevent the retention, use, or disclosure of the information. Parental consent must be obtained before children's personally identifiable information is released to a third party. Staff's letter is available on the Commission's Web site.
While I will not make predictions about particular investigations or cases, I can assure you that protecting children from unfair and deceptive practices is likely to remain a priority at the FTC. Self-regulation and consumer education can go a long way toward accomplishing this goal, and I can predict that the Commission will continue to encourage private efforts to empower parents and protect children. We cannot and should not dictate the form of self-regulation, however, or attempt to regulate by threat of Commission action in areas where we lack authority. To do so needlessly risks stifling the burgeoning innovative efforts of the private sector.
1. The views that I express here today are my own, and do not necessarily reflect those of the Commission or any other Commissioners.
2. 2 15 U.S.C. § 45(a).
3. Letter from the Federal Trade Commission to Hon. John D. Dingell, Chairman, Committee on Energy and Commerce, U.S. House of Representatives (Oct. 14, 1983), reprinted in Cliffdale Assoc., Inc., 103 F.T.C. 110, 174 (1984).
4. Deception Statement at 178-79.
5. See Ideal Toy, 64 F.T.C. 297, 310 (1964).
6. See Lewis Galoob Toys, Inc., 114 F.T.C. 187 (1991).
8. 15 U.S.C. § 45(n).
9. See Philip Morris, Inc., 82 F.T.C. 16 (1973).
10. See Uncle Ben's Inc., 89 F.T.C. 131 (1977); Mego International, 92 F.T.C. 186 (1978).
11. See Warner Lambert Co. v. FTC, 562 F.2d 749 (D.C. Cir. 1977), cert. denied, 435 U.S. 950 (1978).
12. Azrak-Hamway International, Inc., Docket No. C-3653 (1996).
13. U.S. v. Hasbro, Inc., No. 96-451P (D.R.I. Aug. 6, 1996).
14. 44 Liquormart, Inc. v. Rhode Island, 116 S. Ct. 1495 (1996).
15. Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980).
16. See Central Hudson, 447 U.S. at 563; Virginia Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 771-72 (1976).
17. Central Hudson, 447 U.S. at 566.
18. See Warner Lambert, 562 F.2d at 758; Beneficial Corp. v. FTC, 542 F.2d 611, 620 (3d Cir. 1976), cert. denied, 430 U.S. 983 (1977).
19. 19 The Court stated that "[w]ithout any findings of fact, or indeed any evidentiary support whatsoever, we cannot agree with the assertion that the price advertising ban will significantly advance the State's interest in promoting temperance. Although the record suggests that the price advertising ban may have some impact on the purchasing patterns of temperate drinkers of modest means, the State has presented no evidence to suggest that its speech prohibition will significantly reduce market-wide consumption." 44 Liquormart, 116 S. Ct. at 1509 (emphasis in original) (citations omitted).
20. 20 "[A]ny conclusion that elimination of the ban would significantly increase alcohol consumption would require us to engage in the sort of 'speculation or conjecture' that is an unacceptable means of demonstrating that a restriction on commercial speech directly advances the State's asserted interest. Such speculation certainly does not suffice when the State takes aim at accurate commercial information for paternalistic ends." Id. at 1510 (citations omitted).
21. 21 See Letter from the Federal Trade Commission to Hon. Wendell Ford and Hon. John Danforth, Committee on Commerce, Science and Transportation, United States Senate (Dec. 17, 1980) ("Unfairness Policy Statement"), appended to International Harvester Co., 104 F.T.C. 949, 1070 (1984).
22. 15 U.S.C. § 57a(i).
23. 15 U.S.C. § 57a note.
24. Phone Programs, Inc., 115 F.T.C. 977 (1992); Teleline, Inc., 114 F.T.C. 399 (1991); Audio Communications, Inc., 114 F.T.C. 414 (1991). See also Fone Telecommunications, Inc., 116 F.T.C. 426 (1993).
25. 16 C.F.R. §§ 308.3(e), (f).
26. 26 R.J. Reynolds Tobacco Co., File No. 932-3162 (Joint Statement of Commissioners Mary L. Azcuenaga, Deborah K. Owen, and Roscoe B. Starek, III) (June 6, 1994).
27. 27 15 U.S.C. § 45(n).
29. 29 Sears, Roebuck and Co., File No. 972-3187 (consent agreement accepted for public comment) (June 3, 1997) (unlawful collection of debts that were legally discharged in bankruptcy proceedings); FTC v. David L. Amkraut, Civ. 97-054-RSWL(BQRx) (C.D. Cal. 1997) (submitting disqualifying, multiple entries on behalf of his clients in State Department's green card lottery; failing timely to forward to lottery winners the materials necessary for them to apply for visas); FTC v. Diversified Marketing Service Corp., Civ. 96-0388M (W.D. Okla. 1996) (unauthorized bank debits and credit card charges); FTC v. Windward Marketing, Ltd., 1:96-CV-615-FMH (N.D. Ga. 1996) (same). See also R.J. Reynolds Tobacco Co., Docket No. 9285 (complaint issued May 28, 1997) (allegedly inducing children to smoke or continue smoking through advertising campaign).
30. The Commission shares jurisdiction with the Bureau of Alcohol, Tobacco and Firearms ("BATF") over deceptive alcohol advertising. The Federal Alcohol Administration Act authorizes the BATF to prevent false, misleading, obscene, or indecent statements in advertisements of distilled spirits, wine, or malt beverages. 27 U.S.C. § 205(f). BATF also has authority over alcohol product labeling and pre-approves package labels. 27 U.S.C. § 205(e).
An agreement between the FTC and the FCC recognizes that the FTC has primary responsibility with respect to unfair or deceptive advertising in all media, including the broadcast media. Liaison Agreement Between Federal Communications Commission and Federal Trade Commission (Apr. 27, 1972), 4 Trade Reg. Rep. (CCH) ¶ 9852.
31. Canandaigua Wine Co., 114 F.T.C. 349 (1991).
32. 32 Health Warnings on Alcoholic Beverage Advertisements: Hearings on H.R. 4493 Before the Subcomm. on Transportation and Hazardous Materials of the Committee on Energy and Commerce, United States House of Representatives, 101st Cong., 2d Sess. 35-41 (1990)(statement of Janet D. Steiger, Chairman, FTC).
33. 33 U.S. Dept. of Health and Human Services, Public Health Service, National Institutes of Health, National Institute of Alcohol Abuse and Alcoholism, The Effects of the Mass Media on the Use and Abuse of Alcohol, at v (1995).
34. 34 But see Anheuser-Busch v. Schmoke, 101 F.3d 325 (4th Cir. 1996), cert. denied, 117 S. Ct. 1569 (1997); Penn Advertising v. Mayor of Baltimore, 101 F.3d 332 (4th Cir. 1996), cert. denied, 117 S. Ct. 1569 (1997).
35. R.J. Reynolds Tobacco Co., Docket No. 9285 (complaint issued May 28, 1997), Complaint ¶ 6.
36. Id., Complaint ¶¶ 7-8.
37. Id., Complaint ¶ 8.
38. Id., Complaint ¶ 9.
39. Id., Complaint ¶ 10.a.
40. Id., Complaint ¶ 10.b.
41. Id., Complaint ¶¶ 11-12.
42. Id., Notice Order ¶ I.
43. Id., Notice Order ¶ III.
44. Id., Notice Order ¶ II.
45. Id., Notice Order at 1-2.
46. Dissenting Statement of Commissioner Roscoe B. Starek, III in R.J. Reynolds Tobacco Co., Docket No. 9285 (May 28, 1997); Statement of Commissioner Mary L. Azcuenaga in R.J. Reynolds Tobacco Co., Docket No. 9285 (May 28, 1997).
47. See American Body Armor and Equipment, Inc., Docket No. C-3539 (Oct. 21, 1994) (consent order addressing alleged false representation that bullet-resistant vests complied with government agency's voluntary performance standard).