15 U.S.C. § 45(a). 1

Before the

FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

In the Matter of )

)

Empowering Parents and Protecting Children in an

Evolving Media Landscape

)

)

MB Docket No. 09-194

COMMENTS OF THE

FEDERAL TRADE COMMISSION

Introduction

The Federal Trade Commission (FTC) supports the Federal Communications

Commission’s (FCC) important initiative to examine the evolving media landscape with

a view toward empowering parents and protecting children from inappropriate contact,

conduct and content. The FTC uses its resources to enforce the nation’s consumer

protection laws and to educate citizens of all ages about making smart choices, whether

they are watching television, playing games, on their computers, or using applications on

their phones.

An independent administrative agency, the FTC is charged with promoting

consumer protection, competition, and the efficient functioning of the marketplace. Our

law enforcement authority is based in Section 5 of the FTC Act, which prohibits “unfair

or deceptive acts or practices in or affecting commerce.” Section 5 encompasses a wide 1

range of business practices, including advertising and marketing.

This comment describes the FTC’s existing law enforcement authority as it

relates to protecting children in traditional and new media environments. It offers an

overview of the agency’s recent education campaigns targeted to parents and children,

teachers and mentors. In addition, it highlights recent FTC reports examining food,

beverage and entertainment marketing targeted to children, and our recommendations

that industry participants (and media companies involved in children’s marketing) ramp

up their self-regulatory efforts to protect the nation’s youngsters. Finally, the comment

describes the FTC’s 2009 report examining the incidence of explicit sexual and violent

content in online virtual worlds and its recommendations to reduce the risk of children’s

exposure to it on these websites.

A. Protecting Children Through Vigorous Law Enforcement 

Making the Internet more secure for all consumers, including children, is central

to the agency’s law enforcement mission. The FTC has used its general statutory

mandate of preventing unfair and deceptive acts and practices to protect the right of

consumers to avoid unwanted and potentially offensive content online. The FTC also has
FTC v. Various, Inc. d/b/a AdultFriendFinder, No. 5:07-cv-6181 (N.D. Cal. filed Dec. 6, 2007), available 2

at http://www.ftc.gov/opa/2007/12/afriendfinder.shtm. See also FTC v. Zuccarini, No. 01-CV-4854 (E.D.

Pa. filed Oct. 1, 2001), available at http://www.ftc.gov/os/caselist/0123095/index.shtm (alleging unfairness

and deception against a defendant who registered various misspellings of a children’s cartoon site and a

pop star to redirect users to sites showing pornographic images); FTC v. Pereira, No. 99-1367-A (E.D. Va.

filed Apr. 14, 1999), available at http://www.ftc.gov/os/caselist/9923264/990922comp9923264.shtm (case

alleging deception and unfairness against defendants who “hijacked” certain web pages and forced

consumers who had searched for non-sexually explicit topics to be taken to adult websites).

 15 U.S.C. §§ 7701-7713. 3

 16 C.F.R. Part 316.4. 4

See. e.g., U.S. v. Cyberheat, Inc., No: CIV 05-0457 (D. Ariz.) (2008) ($413,000 civil penalty), available at 5

http://www.ftc.gov/os/caselist/0523042/0523042.shtm.

See FTC law enforcement cases at 6http://www.ftc.gov/privacy/privacyinitiatives/childrens_enf.html.

2

several specific statutory tools that deal with what children see in emails and what they

share on websites.

For example, the FTC has settled with operators of adult websites to limit their

use of ads. In one case, the operator used spyware and adware to deliver pop-up ads with

sexually explicit images to lure people to their sites. These images often were served up

to consumers, including children, who simply were surfing the web rather than visiting

sexually oriented websites. The FTC’s order bars the operator from disseminating

sexually explicit advertisements to people who are not looking for sexually explicit

material; it also requires the operator to monitor its marketing affiliates and other third

parties involved in advertising its sexually explicit websites.2

In addition, Congress gave the FTC specific authority in 2003 to tackle the

problem of sexually explicit email communications. The CAN-SPAM Act and the 3

FTC’s Adult Labeling Rule aim to be a barrier between “X-rated” email and children. 4

Commercial e-mailers must use the subject line to alert recipients to the presence of

sexually explicit content; they also must make sure that the initially viewable area of the

email message does not contain any graphic sexual images. The FTC has brought more

than 10 cases involving the Adult Labeling Rule, garnering more than $2 million in civil

penalties, and disgorging more $900,000 in ill-gotten gains. 5

The FTC also enforces the Children’s Online Privacy Protection Act of 1998

(COPPA), which gives parents control over the personal information websites may

collect about their children under the age of 13 and how the websites can use that

information. The FTC has brought 15 cases against operators of child-directed and

general audience websites that failed to comply with COPPA, obtaining more than $3

million in civil penalties. Indeed, in one case, Sony BMG Music Entertainment, a 6

subsidiary of Sony Corporation of America, paid a $1 million civil penalty to resolve

allegations that it knowingly collected a broad range of personal information from at

least 30,000 underage children without either notifying their parents or getting their
United States of America v. Sony BMG Music Entertainment, No. 08 CV 10730 (S. D. NY) (2008) 7

available at http://www.ftc.gov/os/caselist/0823071/index.shtm.

See Federal Trade Commission, Net Cetera: Talking with Kids About Being Online, available at 8

http://www.ftc.gov/bcp/edu/pubs/consumer/tech/tec04.pdf.

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consent to collect the information. The children had registered on 196 of Sony BMG’s 7

music fan sites.

The FTC plans to seek public input in its review of the COPPA Rule in 2010. 

The FTC believes that changes to the online environment over the past five years,

including but not limited to children's increasing use of mobile technology to access the

Internet, warrant reexamining the Rule at this time. The review had originally been

scheduled for 2015.

B. Consumer and Business Education

Several FTC consumer education initiatives encourage children and adults to use

media safely and responsibly. For example, www.OnGuardOnline.gov, a partnership of

the federal government and the technology community, provides practical and plainlanguage information in a variety of formats – including articles, games, quizzes, and

videos – to help computer users be on guard against Internet fraud, secure their

computers, and protect their personal information. A total of 13 federal agencies,

including the FCC, are partners on the site, contributing content and helping to promote

and disseminate consistent messages. 

Net Cetera: Chatting With Kids About Being Online is a recent addition to

www.OnGuardOnline.gov. This guide, written by the FTC for the OnGuardOnline

brand, gives practical tips on how parents, teachers and other trusted adults can help

children reduce the risks of inappropriate conduct, contact and content that come with

living life online – and engage in conduct they can be proud of. The guide focuses on 8

the need for communication rather than a knowledge of technology, and takes on issues

from cyberbullying to sexting, social networking to phishing and file sharing. Net Cetera

was written in response to the Broadband Data Improvement Act of 2008, which directed

the FTC to implement a national program that promotes the safe use of the Internet by

children. It is available in both English and Spanish.

The FTC also has education initiatives to teach children to be smarter consumers

in general, including how to understand the role of advertising. For example, recognizing

that spending habits are formed at an early age, the FTC created ftc.gov/YouAreHere, a

website to educate children in 5 to 8 grades about the role the FTC plays in the th th

marketplace. Set in a shopping mall, the site takes an experiential approach to the

antitrust, consumer protection and economic issues that underlie children’s commercial

interactions every day. It features games to demonstrate the relationship between pricing

and production, and supply and demand, as well as truth in advertising, the importance of

protecting personal information, and the facts behind those literally fabulous claims for

cure-all products. 
4

Visitors to www.ftc.gov/YouAreHere can design and print ads for a shoe store,

decode suspicious claims, and learn to identify the catches behind bogus modeling and

“free” vacation offers. In the mall’s Security Plaza, visitors also can learn the importance

of protecting personal information online and off. The food court features lessons on

making smart choices based on product attributes and price, and the cinema features a

movie on the history of monopolies and how the antitrust laws stopped them from

harming the nation’s consumers. The official kids’ portal for the U.S. government, 

www.Kids.gov, chose YouAreHere as “site of the month” for November 2008.

During the second quarter of 2010, the FTC will launch a multi-media initiative,

called AdMongo, designed to promote advertising literacy among tweens – children aged

8-12. Children spend billions of dollars a year on products and services, and influence

billions more in family purchases. Advertising is ubiquitous, and the distinction between

advertising and other content in new media – advergames, for example – often is

blurred. It is likely that many children may not understand when they are being

“pitched” a product or service. 

The goals of Admongo are to: (1) teach children to be aware of advertising and

marketing messages; (2) teach them how to read, analyze, and understand ads; and (3)

show them the benefits of being an informed consumer. The campaign focuses on three

key questions that are central to helping children develop these critical thinking skills:

(1) Who is responsible for the ad?

(2) What does the ad actually say?

(3) What does the ad want you to do?

The heart of the campaign is Admongo.gov, an interactive site that teaches core

ad literacy concepts through an entertaining game with multiple levels and challenges. 

A curriculum, developed in partnership with Scholastic, Inc., has been designed to equip

children with the skills they need to recognize why, where, and how commercial

messages are constructed and placed. The FTC will work with Scholastic and other

partners to disseminate the free materials to schools, libraries, and other organizations so

teachers, parents and others can use it to educate the tweens in their lives. 

In addition to preparing and disseminating information and education for

consumers, the FTC also does extensive outreach to businesses to foster knowledge of – 

and compliance with – the FTC’s business rules. The FTC’s business outreach efforts

are grounded in a comprehensive set of written compliance materials, and in individual

guidance to website operators, or their counsel, on an “as needed” basis. 

For example, to facilitate COPPA compliance, the FTC has a section at

www.ftc.gov dedicated to children’s privacy (see

http://www.ftc.gov/privacy/privacyinitiatives/childrens.html), where businesses can find

publications including guides like How to Comply with the Children’s Online Privacy

Protection Rule; You, Your Privacy Policy and COPPA; and How to Protect Kids’

Privacy Online, as well as answers to Frequently Asked Questions (or “FAQs”) about
 Federal Trade Commission, Marketing Food to Children and Adolescents: A Review of Industry 9

Expenditures, Activities, and Self-Regulation (2008), available at

http://www.ftc.gov/os/2008/07/P064504foodmktingreport.pdf. In a separate earlier report, economists in

the FTC’s Bureau of Economics compared children’s exposure to television advertising in 1977 with their

exposure in 2004. They concluded that children’s exposure to food ads on television has not risen and has

actually fallen modestly, although their advertising exposure is more concentrated on children’s

programming. See Federal Trade Commission, Bureau of Economics Staff Report, Children’s Exposure to

TV Advertising in 1977 and 2004: Information for the Obesity Debate ES-3-7 (2007), available at

www.ftc.gov/os/2007/06/cabecolor.pdf.

About $300 million of these expenditures were addressed to both age groups; hence, the total spending is 10

less than the sum of the separate expenditures for the two age groups.

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COPPA. Periodically, the FTC issues guidance on specific topics, like the Rule’s

requirements for the contents of online privacy notices, and the COPPA “actual

knowledge” standard for operators of general audience websites. In addition, the agency

maintains a COPPA Hotline, where staff offer fact-specific guidance in response to

questions from site operators. Indeed, the demand for COPPA compliance assistance is

burgeoning, as new websites and technologies emerge. 

C. Policy Development and Study

The FTC has reviewed and reported on how the marketing practices of the food

and beverage industry and the electronic game, movie, and music industries relate to

children. In addition, the agency recently studied the incidence of explicit sexual and

violent content in online virtual worlds and how children can be protected from it. In

each of these efforts, the FTC recommended that industry participants, along with media

companies involved in children’s marketing, ramp up their efforts at self-regulation. 

Because of possible First Amendment considerations in addressing each of these areas,

the Commission has recognized the importance of focusing on self-regulatory efforts.

1. Food and Beverage Marketing to Children

Concern about the dramatic increase in childhood obesity prompted Congress to

ask the FTC to study food and beverage marketing to children and adolescents. The FTC

analyzed expenditures and activities by 44 companies in 2006, including spending on

traditional measured media, like television, radio, and print; activities on the Internet and

other new electronic media; and previously unmeasured forms of marketing to

youngsters like packaging, in-store advertising, event sponsorship, and in-school

promotions.

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The companies reported spending an estimated $1.6 billion to promote food and

beverages to American children and teenagers in 2006. Traditional “measured media” 10

(television, radio, and print) accounted for $853 million, or 53 percent of the reported

expenditures on youth-directed marketing. Use of cross promotions – say, linking a food

or beverage to a licensed character, a new movie, or a popular television program –

accounted for $208 million, or 13 percent of all reported youth-directed marketing, with

cross-promotions in certain food categories (restaurant food, fruit and vegetables)

representing nearly 50% of child-directed marketing expenditures. New media – the
 Federal Trade Commission, Marketing Violent Entertainment to Children: A Sixth Follow-up Review of 11

Industry Practices in the Motion Picture, Music Recording & Electronic Game Industries (2009), available

at http://www.ftc.gov/os/2009/12/P994511violententertainment.pdf.

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Internet, digital (such as email and text messaging), and word-of-mouth/viral marketing –

accounted for $77 million, or 5 percent of reported marketing aimed at young people. 

With the cost of Internet display advertising substantially lower than the cost of

advertising in traditional media, this figure may underestimate the extent to which

marketers relied on the Internet to advertise to children and teenagers – at least back in

2006. 

The FTC report recommended that food and beverage companies and media and

entertainment companies step up their self regulatory efforts to help address the

childhood obesity problem, for example by: (1) expanding their self-regulatory practices

to cover all forms of advertising and promotional techniques and (2) limiting character

licensing to healthier foods and beverages marketed to children. A second study,

scheduled to be completed next year, will assess whether industry implemented the

FTC’s recommendations. 

2. Marketing Violent Entertainment to Children

Since 2000, the FTC has called on the movie, music, and video game industries to

be more vigilant in three areas: restricting the marketing of mature-rated products to

children; clearly and prominently disclosing rating information in advertising and

labeling; and restricting children’s access to mature-rated products at retail. In 2009, the

FTC released its seventh report on the marketing of violent entertainment to children,

which included the results of undercover shopping trips by underage shoppers. The 11

Commission found that movie theaters denied 72 percent of underage shoppers

admission to R-rated movies (the best results obtained to date), and video game retailers

denied 80 percent of such shoppers access to M-rated games. On the other hand, music

retailers permitted seven in ten underage shoppers to buy CDs with a Parental Advisory

Label and more than half to buy violent R-rated and unrated DVDs.

The report also found that marketers can do much more to restrict the promotion

of mature-rated or -labeled products to children. The music industry still has not adopted

limits on ad placements for explicit content music, a void that has resulted in ads on

television shows that disproportionately attract young teenagers. Movie studios directly

and pervasively market PG-13 movies to children under 13 on television, in print, and on

the Internet, even though the rating is supposed to represent a strong caution to parents

that some material may be inappropriate for children under 13. Moreover, the growing

practice of releasing unrated DVDs – particularly with packaging that hypes the lack of

an MPAA rating – disparages the industry’s rating system, and confuses parents. Finally,

all three industries can do more to limit ad placements on websites that

disproportionately attract children and teenagers. 

Given important First Amendment considerations, the FTC supports private

sector initiatives by industry and individual companies to implement its suggestions. The
 Federal Trade Commission, Virtual Worlds and Kids: Mapping the Risks (2009), available at 12

http://www.ftc.gov/os/2009/12/oecd-vwrpt.pdf.

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FTC will continue to monitor this area, particularly as new technologies change the way

these products are marketed and sold. For example, mobile applications are quickly

changing the ways that children access entertainment, and may be less familiar to parents

and more difficult for them to supervise. Given the sheer volume of applications

currently available for mobile devices and the dramatic rate at which applications are

proliferating, in the near term, responsibility falls on wireless carriers and individual

publishers to provide content information and effective parental controls. The FTC will

continue to work with the industry and others to encourage efforts to give parents

practical information to help them decide which products are appropriate for their

children. 

3. Online Virtual Worlds and Children

In December 2009, the FTC issued a report examining the incidence of explicit

sexual and violent content in online virtual worlds. “Virtual Worlds and Kids: Mapping 12

the Risks,” surveyed 27 online virtual worlds, including those specifically intended for

young children, worlds that appealed to teenagers, and worlds intended only for adults. 

The FTC found at least one instance of explicit content in 19 of the 27 worlds, a heavy

amount of explicit content in five of the virtual worlds, a moderate amount in four

worlds, and a low amount in the remaining 10 worlds. The Commission observed a

greater concentration of explicit content in worlds that permitted teenagers to register.

The report urges operators of virtual worlds to take a number of steps to keep

explicit content away from children and teenagers, and recommends that parents visit the

virtual worlds their youths visit. For example, the FTC suggested that virtual world

operators make certain enhancements aimed at reducing the risk of youth exposure to

explicit content, including: (1) ensuring that the age-screening mechanisms virtual world

operators employ do not encourage underage registration and (2) implementing or

strengthening age-segregation techniques to help ensure that minors and adults interact

only with their peers and view only age-appropriate material. Given the important First

Amendment considerations, the Commission supports virtual world operators’ selfregulatory efforts to implement these recommendations.

D. Conclusion

The FTC is pleased to draw on its long and deep experience in enforcing

consumer protection laws and educating the nation’s citizens on the safe and smart use of

new technologies to assist the FCC in crafting policies to help America’s families meet

the challenges of the ever-changing media landscape.