Legislative Committee Update – June 2018

Nicole Schmoll Board Photo 2017Contributed by Nicole Schmoll, AAF Omaha Board Member and Legislative Issues Chair

Happening at the National level

The Legislative Issues Committee continues to follow developments that could impact advertising and communication decisions locally. The latest installment of the AAF Government Report was released on May 30 by Clark Rector, Jr., Executive Vice President of Government Affairs for AAF.

In addition to an AAF Day on the Hill date being set for March 6 – 7, 2019 in Washington, DC, Clark provided updates on a number of important issues. Clark’s report follows below.

Ad Tax Introduced in California

California State Senator Robert Hertzberg, D-Van Nuys, has introduced legislation that would extend the state’s sales tax to many services, including purchases of advertising “on television, radio, in print, on the Internet, or by any other medium.”

The bill was one of many considered in preliminary hearing on Wednesday, May 16 in the Senate Governance and Finance Committee. There was limited opportunity to testify at the hearing, although the room was reportedly full of opponents of the tax. No vote was taken and there seemed to be very limited support for the measure among Committee members. A Second hearing has been tentatively scheduled for June 13.

DAA Introduces PoliticalAd Initiative

The Digital Advertising Alliance (DAA) has launched an industry-wide initiative to increase transparency and accountability around digital political ads, including newguidance for political advertisers and a “PoliticalAd” icon that will link to additional information on such ads. AAF is one of the supporting associations of the DAA.

Building on the success of the DAA’s existing YourAdChoices program, the new “PoliticalAd” icon will serve as an immediate, simple, and intuitive tool for people to get information on the political ads covered by the new guidelines. Information available through the icon will include the political advertiser’s name, contact information, contribution or expenditure records (when applicable), individual contacts, and other required disclosures.

Under the DAA’s new guidance for political advertising, the PoliticalAd icon and/or wording should be used to provide clear, meaningful, and prominent notice for ads that expressly advocate the election or defeat of a candidate for federal office and in certain state-wide elections. The icon/wording should link to disclosures, including:

  • Name of the political advertiser;
  • Phone number, address, website, or alternative and reliable contact information for the advertiser;
  • Other information required by applicable federal or state law for such notices;
  • Link to a government database of contributions and expenditures for the advertiser, if applicable;
  • Any disclaimers required by state or federal law, if the ad itself is too small to display them (as permitted by applicable law); and
  • Name(s) of the advertiser’s CEO, executive committee, board of directors, or treasurer.

The DAA will review the implementation for the guidance on an ongoing basis and evaluate any additional steps that might be necessary to effectively implement this guidance or further increase transparency around political advertising.

AAF and its partner trade associations in the DAA have filed comments with the Federal Election Commission regarding the “Notice of Proposed Rulemaking on Internet Communication Disclaimers and the Definition of ‘Public Communication’.” The comments urged the FEC to adopt rules that permit political advertising to use icons in ads for communications disclosures, providing that engaging the icon leads to the full disclaimer.

GDPR in Effect

The European Union began enforcing the General Data Protection Regulation on May 25. The regulation includes many stringent new requirements pertaining to the collection, use and processing of personally identifiable information of persons inside the European Union. Under GDPR individuals in the EU have a much greater right of control over their data and companies that run afoul of the regulation could be subject to very heavy fines.

Any company that does business with customers in the EU is encourage to seek legal counsel and assure that all privacy and data protection practices are in full compliance with the new regulations.

DTC Update

While speaking about reducing the price of prescription drugs President Trump did not call for restrictions on direct to consumer advertising of pharmaceuticals or for limiting the tax deductibility of those ads.

The administration is, however, considering requiring DTC ads to include drug prices. Commissioner of the Food and Drug Administration Scott Gottlieb has acknowledged that the proposal raised a number of questions such as “Does the disclosure of the price information provide appropriate balance to the consumer — like, is the information about the cost of the drug and the accessibility of the drug important at the time that they’re seeing the advertisement, in order to provide appropriate disclosure and fair balance in the advertisement?”

Also uncertain is whether the government can legally compel the disclosures. If so, given the complexity of drug pricing how would the disclosed price would be determined?

AAF Day on the Hill Date Set
The next AAF Day on the Hill will be in Washington, DC on March 6 and 7, 2019. Mark your calendars and watch this space for more information this summer and fall. For sponsorship opportunities contact AAF EVP-Government Affairs Clark Rector at crector@aaf.org.

Happening at the State and Local levels
The Nebraska Legislative session adjourned on April 18. A complete list of bills introduced during its most recent 60 day session is available at NebraskaLegislature.gov.

The Legislative Issues Committee will continue to follow national issues, the State’s Unicameral Update and local news stories pertinent to advertising, communications and public relations industries and report on further developments in future issues of AdMuse.


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