AAF Government Report

July 15, 2011

Clark Rector Jr., Executive Vice President – Government Affairs

Dwayne Fitzhugh, Federation Intern

Working Group Hears From Advertising Industry

The Interagency Working Group (IWG) which recently proposed voluntary nutrition standards for foods advertised to children has heard forcefully from the advertising industry why the proposal is ill-advised, would not work, and would, in fact, cause more harm than good. The IWG is comprised of the Federal Trade Commission, the Department of Agriculture, the Food and Drug Administration, and the Centers for Disease Control and Prevention. The American Advertising Federation joined with the Promotion Marketing Association to file extensive comments. The Alliance for American Advertising, of which AAF is a founding member, also filed comments. Government officials also heard from the advertising industry across the country. Over 60 AAF advertising clubs and the AAF Council of Governors signed a letter to the Secretary of Health and Human Services Kathleen Sebelius (FDA and CDC), Secretary of Agriculture Tom Vilsack and FTC Chairman Jon Leibowitz.

The IWG has not yet announced a timeframe for next steps, nor what those steps might be.

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House Energy and Commerce Committee Hearing: Internet Privacy

On July 14th the House Energy and Commerce subcommittees on Commerce, Manufacturing and Trade and Communications and Technology held another in a series of Congressional hearings on Internet privacy.  Witnesses included Federal Communications Committee Chairman Julius Genachowski, FTC Commissioner Edith Ramirez, and Assistant Secretary for the National Telecommunications and Information Administration, Lawrence Strickling.

As in many previous hearings, issues of data security and privacy were blurred together.  Many committee members displayed a disregard for the importance of behaviorally targeted advertising in funding and fueling the growth of the Internet.  However, Vice Chairman Marsha Blackburn, R-Tenn. reminded the committee members that over 40% of Internet sales occurred from the use of online ads. Rep. Adam Kinzinger, R-Ill, noted that behavioral targeted ads have helped grow our current economy and warned that creating too strict of a privacy mandate risks slowing an already hurting economy

One minor surprise occurred during a discussion of the use of geolocation data.  In response to a question from Rep. Edward Markey, D-Mass, about the tracking of minors, Chairman Genachowski responded that such information could be important in the event of an emergency, and that the decision of whether or not to track minors, should be left up to the individual parents.

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South Dakota to Look at Advertising, Other Services

The South Dakota Legislature’s Sales Tax Review Committee will hold a late August hearing on whether advertising and certain other services should lose their sales tax exemption. The hearing is part of a periodic review of exemptions. No specific proposal has been made to tax advertising or any of other exempted services. South Dakota does not have a personal or business income tax. The state sales tax – which already includes a broad base of services – accounts for approximately two-thirds of the state’s $1.1 billion in general revenue.

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Rep. Markey Upset with Supreme Court

Rep. Edward Markey, D-Mass., has introduced a resolution expressing disapproval of the Supreme Court’s ruling in Sorrell v. IMS Health Inc. In his resolution he claims that the decision, (1) puts prescribers at risk of having their information sold without their knowledge or consent, (2) the Supreme Court incorrectly applied a ‘heightened’ First Amendment standards to an instance of commercial regulation, (3) the manufacturers’ ability to manufacture its products outweighed the concerns over patient safety, doctor privacy, and health care costs, and (4) the states should have the right to regulate the industry standards as they see fit. AAF disagrees with Rep. Markey, and in fact filed an amicus brief in the case urging the Court to rule as it did.

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