February 28, 2019

• California Moves Towards Implementation of CCPA
• European Countries Consider Digital Advertising Tax
• Appeals Court Decision Favors Advertising
• Ways and Means Committee Hearing Targets DTC AdsAAF Day on the Hill & Op-Ed in Mediapost

California Moves Towards Implementation of CCPA

California Consumer Privacy Act is due to go into effect on January 1, 2020, and regulators and legislators in the state continue their efforts to make sure the state is prepared.

Attorney General Xavier Becerra’s office has conducted a series of forums across the state to hear from the public and interested parties about issues that need to be addressed during the writing of rules to implement the law. The advertising industry has been well represented at all of the forums.  AAF Sacramento president Heather Smith and AAF District 14 Governor Christopher Terrazas each testified at the February 5 forum in Sacramento to explain the impact the new law could have on smaller businesses in the state. AAF and our industry allies had previously submitted comments to the AG.

We also submitted comments to the Assembly Committee on Privacy and Consumer Protection prior to its February 20 hearing on the issue.

European Countries Consider Digital Advertising Tax

Many European countries have been advocating for country and/or European Union wide digital services taxes (DST) structured so that they would primarily target large U.S. technology firms.  The proposal has not been universally supported within the EU. In an effort to move the issue forward in December, a French/German “compromise” was introduced that narrowed the DST to make it even more targeted to handful of U.S. companies, and applied it only to digital advertising where revenues exceed a high threshold.

The proposals have received a strong pushback from U.S. government officials including Treasury Secretary Steven Mnuchin, former Chairman of the House Ways and Means Committee Kevin Brady (R-TX) and Senate Finance Committee Chairman Charles Grassley (R-IA) and Ranking Minority Member Ron Wyden (D-OR).

The DST and digital advertising tax promise to be continuing issues into 2019.  AAF will continue to monitor the issue and express our opposition when and where appropriate.

Appeals Court Decision Favors Advertising

The U.S. Ninth Circuit Court of Appeals unanimously affirmed a 2017 ruling by a three-judge panel that a San Francisco measure requiring warning labels on ads for sugary drinks violates the First Amendment protection for commercial speech.  The measure would have primarily affected out-of-home advertising. 

Ways and Means Committee Hearing Targets DTC Ads

The U.S. House Ways and Means Committee conducted a February 12 hearing on The Cost of Rising Prescription Drug Pricesnbsp;that largely targeted direct-to-consumer advertising of pharmaceuticals.  Many members of the committee questioned whether the “favorable” tax treatment of DTC advertising helped to raise the cost of prescription medications.  DTC advertising receives the same treatment as the advertising for any other product or service – fully deductible as a normal and necessary business expense.

While some of the witnesses were not favorable towards DTC advertising, none went so far as to claim that limiting DTC would lead to lower drug costs. 

Advertising Day on the Hill Coming Soon

AAF’s Advocacy and Action: Advertising Day on the Hill  March 6 and 7 is only days away. There is still time to register for this important conference and come to Washington, D.C., to make your voice heard on behalf of your business and the advertising industry.  For more information contact Clark Rector at 202-371-2329 or see this recent op-ed in MediaPost