Presidential Candidates May Target Advertising
At a recent campaign stop in Iowa, Democratic presidential candidate, Hillary Clinton, proposed “cracking down on direct-to-consumer advertising.” Ads for prescription drugs “can include confusing, misleading, or incomplete information or exaggerated claims if not regulated effectively,” a campaign memo notes. She said she would eliminate corporate write-offs for direct to consumer advertising [costs] and establish required FDA pre-clearance for such ads.
The proposal ignores the many demonstrated benefits of pharmaceutical advertising to consumers and the fact that the Food and Drug Administration already carefully scrutinizes DTC ads. The agency provides strict standards for describing a drug's side effects in advertising. In addition, pre-clearance of advertising and a different tax treatment based upon the content of the ads are both very clearly unconstitutional.
In an op-ed column for The Wall Street Journal entitled “My Tax Overhaul to Unleash 4% Growth,” Republican presidential candidate, Jeb Bush, may have opened the door to a change in the federal tax treatment of advertising expenses.
In the article, Bush said, “We will...allow businesses to fully and immediately deduct new capital investments...To pay for this, we will eliminate most corporate tax deductions – which is where favor-seeking and lobbying are most common – and remove the deduction for borrowing costs.”
It is unclear at this time what Bush means by “most corporate tax deductions.” It could mean a broad range of special incentives such as renewable energy credits and the investment credit. However, the reference to eliminating the deduction for borrowing costs suggest that it could mean repeal of some or all section 162(a) business expenses possibly including advertising.
AAF will carefully monitor announcements from all candidates for further details.
Governor Issues Amendatory Veto
Illinois Governor Bruce Rauner (R) issued an amendatory veto of SB 1883 the Illinois Data Breach Notification Bill. The veto eliminates the extreme provisions of the bill, while retaining strong measures to protect Illinois consumers, including:
- A new requirement to notify the state Attorney General of a data breach
- Adding health insurance information, medical information, biometric data. And username/passwords to the list of data elements considered a breach.
- Allowing e-mail notifications to consumers so they may take steps to protect their online accounts.
- Requiring data collectors to implement and maintain reasonable security measures to protect records from breaches.
AAF and many of our industry partners, including the Chicago Advertising Federation and AAF-Northern Illinois have written to Illinois state Senate and House members urging that they uphold the amendatory veto.
DAA Mobile Guidance Enforcement Begins
Enforcement for the Digital Advertising Alliance’s Application of Self-Regulatory Principles to the Mobile Environment began on September 1. This is an important step in the evolution of the advertising industry’s commitment to provide consumers with meaningful notice and choice with regards to receiving Interest Based Advertising however they access the online world.
Interested readers can learn more about this and other DAA self-regulatory developments on the DAA blog page.
Report Looks at Obesity, Food Marketing
The Trust for America’s Health, together with the Robert Wood Johnson Foundation, recently released a report analyzing adult and childhood obesity rates between 2011 and 2012 and offering policy recommendations to improve public health. The State of Obesity finds that more than 20 percent of residents in each state are obese. It does not provide any new data on childhood obesity rates. Other findings include:
- Food marketing directed at children decreased by around 20 percent between 2006 and 2009 according to the FTC. The majority of foods marketed to children meets the report’s definition of unhealthy.
- The food and beverage industry spends nearly $2 billion annually to market foods and beverages to children and adolescents in the United States. A report from the Institute of Medicine concluded that food advertising affects children’s food choices, food purchase requests, diets and health. Food marketing is especially prevalent in Black and Latino neighborhoods.
Through the Children’s Food and Beverage Advertising Initiative food and advertising companies have made great strides in reducing the amount of food advertising directed and children and improving the nutritional profile of those foods. However, the report urges the CFBAI to adopt even stronger marketing definitions to cover more areas where children are exposed to food marketing.
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