FTC to subpoena 44 companies’ kids-ad data

WASHINGTON —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

The FTC’s possible findings also are seen as having the potential to inspire new rounds of liability lawsuits by consumers against food marketers. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

The agency, following a congressional mandate to investigate the marketers’ methods for targeting children and adolescents in light of child-obesity concerns, is preparing to issue compulsory “information requests” to 44 unnamed major companies for comprehensive details of their marketing practices. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

Those subpoenas are expected to be served by midsummer, after the FTC’s May 18 deadline for public comments. Disclosure of the trade commission’s initiative in the Federal Register included the FTC’s warning that the destruction by companies of any records deemed relevant to its investigation could result in criminal prosecutions. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

The number of quick-service chains or other types of food marketers that would be subpoenaed is not known. However, the FTC made it clear that big advertising spenders would be likely targets, which could put McDonald’s [3], Burger King [4], Wendy’s [5] and others under the agency’s scrutiny. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

The FTC wants to know the types of food marketed to children and adolescents, including food labeled “better for you,” and the traditional print and broadcast media used to target them. It also seeks information about other media the companies are using, such as in-store marketing, events, package promotions, viral marketing, guerrilla marketing, word-of-mouth and product placement in TV shows, movies, video games and music. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

In addition, the agency is looking for “any marketing policies, initiatives or research in effect or undertaken by the companies relating to the marketing of food and beverage products to children and adolescents,” the Federal Register notice stated. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

By gathering all of that information, the FTC would be able to give Congress and the public “a complete picture” of how food marketers target children and adolescents, it said. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

However, if that picture fans the flames of controversy about the nation’s youth obesity crisis, the FTC’s findings also could provoke litigation by consumers who blame food marketers for children’s ills, legal experts say. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

The FTC indicated that it would report aggregate results of its probe to Congress and would not reveal company-specific data except for information that is already public. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

“We’re ready to respond to any subpoena if we get it,” said Keva Silversmith, vice president of communications for Burger King. “We’re prepared to share this information.” —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

BK is committed to educating customers about nutrition, especially when it comes to products for children and adolescents, he said, and is “always looking” to add nutritious items to the menu. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

McDonald’s and Wendy’s did not respond to requests seeking comment. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

Experts on advertising and the law are well aware of the FTC initiative’s implications for restaurant chains and other food marketers. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

“Companies need to take this very seriously,” said Tony DiResta, a partner in the advertising practice of the Reed Smith law firm in Washington, D.C. “Clearly, government legislators and regulators have identified nonadults as a vulnerable class of citizens deserving special protection.” —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

The cost and time that would be required to fulfill the FTC’s requests is uncertain because the agency has not said how detailed the information must be, he said. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

If the FTC just wants to know bottom-line ad expenditures for a particular brand, he said, then the costs to compile it would be reasonable and would not take too much time. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

However, if companies have to break out the money spent in each specific form of marketing, including traditional media and marketing via the Internet, buzz marketing and word-of-mouth, “that could be unbelievably burdensome,” he said. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

Although the scope of the FTC’s investigation encompasses every facet of marketing to children and adolescents, the agency is “proceeding extremely cautiously” as it seeks the information, DiResta said. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

“The FTC promotes self-regulation, so they don’t want to look like a regulatory agency that runs contrary to big business,” he said. “They’re really trying to allow business to operate practically.” —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

That doesn’t mean food marketers have nothing to worry about once the FTC makes its report to Congress, DiResta said. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

“It certainly can add fuel to the fire about whether advertising practices need to be legislated or regulated,” he said, and it would “provide fodder” to attorneys who bring obesity-related lawsuits against food marketers. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

Dan Jaffe, executive vice president of government relations for the Association of National Advertisers, said there has been a lot of speculation about how food marketers target children and adolescents, but “virtually every restaurant has come up with new food offerings to deal with the demand of the marketplace to combat obesity.” —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

The food industry is focused on diet as a major cause of childhood obesity, Jaffe said, but the federal government should look just as severely at school districts that don’t offer physical education classes or don’t have government-funded classes on nutrition. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

Food advertisers are on “the leading edge” of trying to reduce childhood obesity, Jaffe said. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

Quick-service chains offer salads, bottled water, skim milk, yogurt “and all sorts of options that didn’t exist two or three years ago,” he said. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

The advertising industry itself has produced public service ads worth millions of dollars to combat obesity, Jaffe said. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

“Our industry has a lot to be proud of,” he said. “It’s a shame people are not giving us the credit that is our due.” —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

Jaffe said there was no question that someone would propose tighter restrictions on advertising to children and adolescents. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

DiResta said such restrictions would face “substantial Constitutional hurdles” based on commercial free-speech rights. —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.

However, he added, “if obesity gains traction politically the way violence and pornography have, you can imagine that legislators would want to tackle that.” —Quick-service chains that target children may come under unprecedented scrutiny this year by the Federal Trade Commission and Congress, which could act to regulate kids-marketing practices if FTC subpoenas for corporate documents uncover practices the regulators deem questionable.