April 16, 2013

FTC Goes Undercover to Study Ratings Enforcement by Entertainment Industry

Consumer Advertising Law Blog

The Federal Trade Commission (FTC) has released the results of its most recent undercover shopper survey on ratings enforcement by retailers in the entertainment industry. The survey is part of the FTC's ongoing study into the marketing of violent entertainment to children, which was originally requested by President Clinton on June 1, 1999 in a letter to the Attorney General and the FTC Chairman. This year, the FTC's undercover shopper survey found that movie theaters and retailers of video games, movie DVDs, and music CDs continue to demonstrate steady improvement in restricting sales to underage shoppers, with video game retailers remaining the strongest enforcers of age-based restrictions and movie theaters demonstrating "marked improvement."

To conduct its study, the Commission arranged for unaccompanied 13-to 16-year-old "mystery shoppers" to attempt to purchase tickets to R-rated movies, R-rated DVDs, unrated DVDs that were R-rated when first released in theaters, music CDs bearing a Parental Advisory Label (PAL) for explicit content, and M-rated video games from theaters and major retailers across the country. These voluntary ratings are developed and administered by self-regulatory bodies of the movie, music, and electronic game industries, including the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), and the Entertainment Software Rating Board (ESRB), respectively.

The study found that video game retailers were the strongest enforcers of industry ratings, with only 13 percent of underage shoppers able to purchase M-rated video games, as was the case in 2010. Movie theaters showed significant improvement, with 24 percent of underage shoppers able to purchase tickets to R-rated movies, down from 33 percent in 2010. Thirty percent of underage shoppers were able to buy R-rated DVDs, versus 38 percent in 2010, and 30 percent were able to buy unrated DVDs, versus 47 percent in 2010. Finally, 47 percent of underage shoppers were able to purchase PAL-labeled CDs, down from 64 percent in 2010 and 72 percent in 2009.

This is the Commission's seventh such survey since its initial report to Congress in 2000 on the marketing of violent entertainment to children by the movie, music, and electronic game industries. In the 2000 report, the FTC recommended that the industries enhance their self-regulatory programs by (1) prohibiting target marketing to children and imposing sanctions for violations; (2) increasing compliance with rating systems at the retail level; and (3) increasing parental understanding of the ratings. Since then, the Commission has monitored the industries' progress and in 2009, then-Chairman Leibowitz commended the strides made by the movie and game industries, which included theaters and game retailers "significantly stepp[ing] up their enforcement of the ratings." The Commission this year noted that "for first time since the FTC began its mystery shop program in 2000, music CD retailers turned away more than half of the undercover shoppers." Overall, it appears that the industries' efforts to enhance their self-regulatory programs in connection with the FTC's recommendations have produced results, as the Commission found "continued progress" in reducing sales to underage shoppers.

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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