AAF Government Report

April 8, 2011

Clark Rector Jr., Executive Vice President – Government Affairs

AAF Weighs in With Supreme Court on Commercial Speech

The American Advertising Federation recently filed an amicus brief with the U.S. Supreme Court in a significant commercial speech case.  The brief was filed jointly with the ANA and 4As.

The case, Sorrell v. IMS Health, challenges a Vermont law that bans the sale, license, or exchange of prescriber-identifiable (“PI”) data to market or promote prescription drugs, and bars pharmaceutical manufacturers from using PI data for such marketing and promotion, unless the prescriber consents, i.e., “opts in,” to such use.  All patient information is removed from the data prior to use.

The case raises important issues of what constitutes commercial speech, and the lengths to which the government can go to restrict First Amendment rights through redefining information used for advertising and marketing as a commodity to be regulated.  While the specifics of this case deal with pharmaceuticals, it carries implications for any marketer that collects and uses information to target specific audiences.

The law in question has already been struck down by the Second Circuit Court of Appeals for “unnecessarily restricting commercial speech.”  The advertising associations’ brief requests that the Supreme Court uphold that ruling.

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Privacy Issues Remain in Focus

The Federal Trade Commission has reached a settlement with Google over allegations that the company misled consumers over privacy issues during the rollout of Google’s Buzz social network.  While Google did not acknowledge any wrongdoing, it did apologize for mistakes made during the rollout.  Under the terms of the settlement, Google is prohibited from misrepresenting its privacy practices and is required to obtain users’ consent before sharing their information with third parties.

Senator John Kerry, D-Mass., said the settlement demonstrates the need for legislation establishing baseline privacy protections such as that which the Senator is currently drafting.  The Obama administration has recently said it supports legislation, as well.

The Federal Trade Commission has not explicitly endorsed legislation, but it has called for companies to take voluntary actions to protect privacy, including the establishment of a do-not-track program.  FTC officials recently acknowledged that the agency has limited authority over websites that do not honor a consumers’ choice not to be tracked. 

AAF and a number of allied associations and companies have unveiled a self-regulatory program that accomplishes much of what the legislators and regulators would like to see implemented.  Information about participating in the program can be found at www.aboutads.info.

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Net Neutrality Expected on House Floor Soon

The House Energy and Commerce Committee passed a resolution disapproving of the Federal Communications Commission’s net-neutrality rules adopted late last year.  The rules prohibit Internet providers from blocking websites that use large amounts of bandwidth.  The resolution is anticipated to be considered by the full House soon. While it is likely to pass the House, Senate leaders are not expected to bring it to a vote.

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