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In: Operations Management

Should there be any limits on material that is marketed to appeal in some significant way...

Should there be any limits on material that is marketed to appeal in some significant way to minors? If so, who should set those limits, how should they be set, and who should enforce them? Does the threat of an expensive, bankruptcy-inducing suit amount to de facto censorship in the music industry? How does one balance the need to protect minors from potentially disturbing images with freedom of speech and personal expression?

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Expert Solution

Yes! The questions you have raised is very important form the legal purspective, thank you for asking wonderful question.

We need to understand your question in the following manner.

Talking about your first question we need to understand the follwing things:

Is marketing to children illegal?

Advertising to children is the act of advertising products or services to children as defined by national legislation and advertising standards. ... Laws concerning such advertisements have largely evolved in recent years such as the Children's Online Privacy Protection Act (COPPA) in the United States.

Is it ethical to market products to children?

"There's no moral, ethical, or social justification for marketing any product to children," she says. "Advertising healthier foods to children is problematic. ... Advertising trains kids to choose foods based on celebrity, not based on what's on the package.

Advertising and Promotion Law 1997

As per the above law The Commission places a high priority on combating deceptive and unfair practices that harm children. Yet, our enforcement efforts in this area often raise difficult questions about the appropriate role of government and the nature of the relief that we can impose. Marketing and advertising to children touch on several different FTC issues.

Deception and Unfairness Authority

Section 5 of the Federal Trade Commission Act ("FTC Act") prohibits both unfair and deceptive acts or practices in or affecting commerce.(2) The FTC's deception standard is set forth in the Commission's Deception Policy Statement.(3) It asks whether the challenged representation or practice is one that would likely deceive a consumer acting reasonably under the circumstances in a material way -- that is, in a way that affects the consumer's conduct or choice regarding a product or service. In assessing advertising or other marketing practices that affect or are directed primarily to a particular audience, the Commission considers the effect of the ad or practice on that audience.(4) Thus, our examination of children's advertising takes into account the limited ability of children to detect exaggerated or untrue statements.(5) An interpretation that might not be reasonable for an adult may well be reasonable from the perspective of a child. Claims tend to be taken literally by young children. Depictions of a toy ballerina standing alone and twirling may reasonably be understood by children to mean that the ballerina can really dance by herself.(6) A child who sees an ad showing a fully assembled toy helicopter reasonably may believe that it comes that way right out of the box, so the Commission requires a disclosure if significant assembly is needed.(7)We can also challenge unfair acts and practices under the FTC Act -- those that cause or are likely to cause substantial injury to consumers when that injury is not reasonably avoidable by the consumers themselves and is not outweighed by countervailing benefits to consumers or competition.(8) Although injury must be both substantial and likely, unwarranted health or safety risks can suffice. For example, the distribution of free sample razor blades without protective packaging in home-delivered newspapers poses a direct risk of injury to young children and others who might handle the papers.(9)In assessing whether injury is reasonably avoidable, the Commission looks at how susceptible the affected audience may be to the act or practice in question. Children tend to imitate other children and they often lack the ability to foresee and avoid dangers. Thus, ads that show young children engaging in potentially hazardous activities, such as cooking hot foods or using a blowdryer next to a bathroom sink filled with water, are unfair even though adults might reasonably avoid injury when engaging in similar activities.

Remedies

The Commission has a variety of tools available to it to attempt to prevent future harm to consumers, including law enforcement actions in federal court or before an administrative law judge, issuing rules or guidelines, and consumer education. Court or administrative orders sought by the Commission prohibit deceptive or unfair claims and almost always impose "fencing-in" relief that covers claims or products beyond those that were the subject of the complaint. In appropriate cases, disclosures may be required to correct or prevent deception. Corrective advertising is warranted in the rare case in which the challenged ads substantially contributed to the development and maintenance of a false belief that lingers in the minds of a substantial portion of consumers.(11)

The Commission also may seek redress for consumers or disgorgement in cases involving dishonest and fraudulent conduct. For instance, a Commission consent order issued last year required a toy manufacturer to refund to consumers the purchase price of toy vehicles deceptively shown in television ads performing such feats as driving and flying under their own power.(12) In fact, the toys did not have these capabilities and were manipulated off-screen with wires and other hidden devices to make them appear to be moving. As fencing-in relief, the Commission also required the company to send a letter to every television station that aired the commercials, advising them of the settlement and of the availability of self-regulatory guidelines used by many industry members to screen advertising directed to children.

Once a Commission order is in effect, violations of the order may result in the imposition of civil penalties. Last year, a major toy manufacturer agreed to pay $280,000 in civil penalties to settle charges that it violated a Commission consent order by misrepresenting that children could use a "Colorblaster" paint sprayer toy with little or no effort.(13)

In assessing appropriate remedies for unfair or deceptive practices in advertising to children, we cannot overlook the First Amendment. We've all heard the phrase from our parents or told our own children: "If you can't say something nice, don't say anything at all." While this is a good standard for raising polite children, it is not the standard for speech in a free society.

As the Supreme Court recently reaffirmed in 44 Liquormart,(14) Central Hudson remains the standard for assessing whether restrictions on commercial speech are permissible under the First Amendment.(15) Under the Central Hudson standard for commercial speech, neither deceptive speech nor speech that proposes an illegal transaction is protected by the First Amendment.(16) A restriction on commercial speech that is not misleading and concerns lawful activity must pass three additional tests: the asserted governmental interest in the speech restriction must be substantial; the restriction must directly advance the governmental interest asserted; and the restriction must not be more extensive than necessary to serve that interest.(17)Commission orders that require marketers to stop making false or unsubstantiated statements do not tread on First Amendment rights. When the Commission compels speech as part of a remedy for deception, however, the analysis becomes more complicated. Disclosures that remedy deceptive omissions of material information are correctly viewed as restraints on deceptive speech. Affirmative disclosures or corrective advertising that prevent future deception or correct past deception do not raise First Amendment concerns, unless they in fact go beyond the prevention or correction of deception.(18) Broad fencing-in remedies, for example, that compel general consumer education or other speech not directly related to the prevention of deception are unlikely to survive First Amendment scrutiny.Restrictions on unfair advertising also are subject to First Amendment scrutiny under the Central Hudson standard. In 44 Liquormart, a plurality opinion written by Justice Stevens confirmed that, in the absence of evidence, courts cannot assume that an advertising restraint will significantly reduce consumption.(19) Instead, the government must establish a causal relationship between its speech restriction and the asserted state interest that the restriction is intended to directly advance.(20)A restriction on unfair advertising also has to satisfy the Central Hudson requirement that a speech restriction not be more extensive than necessary to advance the asserted government interest. Both the plurality opinion and Justice O'Connor's concurring opinion in 44 Liquormart agreed that a total ban on price advertising of alcohol did not satisfy this requirement when there were other effective ways for government to achieve its goal.

What are the limits of freedom of expression?

Freedom of speech and expression, therefore, may not be recognized as being absolute, and common limitations or boundaries to freedom of speech relate to libel, slander, obscenity, pornography, sedition, incitement, fighting words, classified information, copyright violation, trade secrets, food labeling, non-disclosure agreements, the right to privacy, dignity, the right to be forgotten, public security, and perjury. Justifications for such include the harm principle, proposed by John Stuart Mill in On Liberty, which suggests that: "the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.

from overall discussion we come to know the answers of all your question.

Thank you.


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