Law Offices of John P. Connell, P.C.: On May 13, 2013, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) created an alcoholic beverage industry circular to clarify rules regarding advertising practices for businesses in the alcoholic beverage industry. Title 27 of the Code of Federal Regulations (“CFR”) generally regulates such advertising practices within this industry. In light of society’s technological advancement and the growth of social media campaigns, however, just what constitutes an “advertisement” within the scope of these regulations today?
“Advertisement” is defined by the CFR as “any written or verbal statement, illustration, or depiction that is in, or calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail.” 27 CFR §§§ 4.60, 5.61 and 7.50. The TTB has construed “advertisement” to extend beyond the means used for advertising at the time the CFR was enacted. For this reason, social media that has been created, or means of advertising that may later be developed, are included within the scope of the CFR.
The general prohibited practices set forth in the CFR include: using false statements in advertising; using misleading statements that, irrespective of falsity, cause consumer deception; invoking the use of obscene material; and making statements that are disparaging to competing products. 27 CFR §4.64. In addition, certain statements must be included in advertisements. These “mandatory statements” include the name and address of the party responsible for the advertisement and “the class, type or distinction designation to which the beverage or product belongs.” 27 CFR §4.62. Further, in the case of distilled spirits advertising, a statement of the alcohol content must be included. Exceptions to these “mandatory statements” apply in the case of “consumer specialty items,” which are advertisements “designed to be carried away by the consumer,” such as brochures or merchandise, and which need only show the company’s name or the product’s brand. 27 CFR §§ 4.62 and 6.84.
To be in compliance with the law, it is important to know how to employ these advertising practices when using social media. No matter what social media platform is being used, “mandatory statements” must clearly and conspicuously be a part of the advertisement, readily apparent to the persons viewing that advertisement, and readily legible. 27 CFR §§§ 4.62, 5.63, and 7.52. On Facebook, LinkedIn and similar platforms wherein a corporate page is created for the business or the brand, although the “mandatory statements” must be clearly visible, there is no specific location where the statements should be placed. Within blogs, the statements should clearly visible as well. Blogs are considered advertisements when the blog writer introduces topics related to its business, beverages, products or the alcoholic beverage industry generally.
Due to the 140-character limit for posts made on Twitter, this social media platform represents a bit of an exception to the inclusion of “mandatory statements.” Tweets are considered advertisements when the tweet is made to induce sales. However, due to Twitter’s character limitation, it has not been found necessary that “mandatory statements “appear in each and every tweet. Instead, it is sufficient to include these statements on the business’s Twitter profile page. The character limitation does not, however, eliminate the necessity of preventing prohibited statements or prohibited advertising practices within tweets.
Videos posted to YouTube or another online platform, as well as video “channels” created by the user, which consist of a series of videos posted by that user, should follow regulations as well. If a business posting videos has a “channel,” then mandatory statements may be placed merely on the online page wherein profile information regarding the business is found. On the other hand, if the business posts a video without an associated “channel” page, the mandatory statements must be within the video itself.
Lastly, when a business creates mobile applications, or apps, which act to provide interactive content such as recipes or location services, these apps are also considered to be advertisements. Apps, however, are deemed “consumer specialty advertisements” because consumers download them to their mobile devices for their own personal use. These apps, therefore, need not include the “mandatory statements”; instead, the apps can merely bear the business’s name or the brand name.
CONTRIBUTED BY COURTNEY MCGEE
© Law Offices of John P. Connell, P.C., 2013.