Last week, New York Senate Bill S 213B, which is aimed at restricting food advertising to children, was heard by the Agriculture Committee and voted out on a 6 to 2 vote along party lines, with the Democrats in the majority.
Although this bill is still working its way through New York’s legislative process and would likely face significant First Amendment challenges if passed, the bill marks a dramatic state-level effort to restrict advertising and thus deserves our attention. The bill’s purpose is to “protect children from junk food companies targeting them with false or misleading advertisements” – so what does this mean?
The bill directs courts in determining whether any advertising concerning a food or a food product should consider (1) “whether the advertisement targets a consumer who is reasonably unable to protect their interests because of their age, physical infirmity, ignorance, illiteracy, inability to understand the language of an agreement, or similar factor” and (2) “whether the advertisement is an unfair act, practice or conduct.”
The bill borrows the Federal Trade Commission’s (FTC) unfairness standard to establish whether an advertisement constitutes an unfair act, practice or conduct. The bill states that an act or practice is unfair where it “(a) causes or is likely to cause substantial injury to such consumer; (b) cannot be reasonably avoided by such consumer; and (c) is not outweighed by countervailing benefits to such consumer or to competition.” The bill directs courts to give “special consideration” to advertising directed at children when considering whether the law had been violated. The bill also outlines factors that the court should consider when determining whether the advertisement was directed at children, including subject matter, visual content, use of animated characters or child-oriented activities and incentives, music or other audio content, age of models, presence of child celebrities or celebrities who appeal to children, and language. Additional factors include empirical evidence regarding audience composition and evidence regarding the intended audience; the physical location of an ad or “proximity to schools or other institutions frequented by children”; the medium by which the ad is communicated, including social media; and any other relevant factors. Many of these factors mirror traditional FTC practices of analyzing the target audience.
The bill also creates a private right of action for consumers. “Consumer” is defined as “a person who is targeted by an advertisement, or those acting on such a person’s behalf.” The definition of consumer is particularly important in this bill because the bill amends N.Y. Gen. Bus. Law Section 350-E to permit a consumer to bring a private right of action if any advertising concerning a food or a food product is false or misleading and the consumer suffered an injury. The section provides that the plaintiff can bring an action to enjoin the practice and recover actual damages or $500, whichever is greater. Additionally, if the court finds that a defendant acted willfully, the court may increase the award of actual damages, not to exceed three times the actual damages, up to $10,000.
Finally, the bill amends New York’s Public Health Law by allowing regulators to target specific food-related industries for implementing its Childhood Obesity Prevention program. The bill also includes a severability provision.
The Association of National Advertisers sent a letter to the New York Senate Agriculture Committee, noting its opposition to the bill and raising several issues. The letter emphasizes that the bill is vague and overbroad and will be subject to a host of constitutional challenges. The letter also emphasizes that advertising is a “tremendous engine of economic activity” in New York and urges the Legislature to consider the impact this bill could have. The letter notes that although the bill is directed at protecting children, the language in the bill referencing those “reasonably unable to protect their interests” includes a much broader swath of people. Additionally, New York law defines “child” as a person “actually or apparently under the age of 18,” which raises additional issues of how marketers could avoid advertising to those who are “apparently” under the age of 18. The bill also critiques the “ignorance” factor, arguing that it places an impossible burden on marketers to ensure consumers are informed.
The letter also takes issue with the “directed” or “targeted” at children language – arguing that both terms are used, but there is no indication as to whether they have the same or different meanings. It also addresses the factors outlined to determine whether an advertisement is directed at children – specifically, the letter argues that “[the bill could] potentially eliminate any use of music or other sound in an advertisement.”
The bill is now headed to the Senate Health Committee. This will be one to keep an eye on as it makes its way through New York’s legislative process.
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