"Our news folks have enough problems with credibility right now without fake news being aired," said Sen. Claire McCaskill (D-Mo.) at a subcommittee hearing July 22 on advertising and consumer protection.
McCaskill was infuriated by ads that mimic newscasts, with actors or even news anchors from a TV station being paid "to pretend like it is a newscast, with a ticker running underneath."
She said it was "unconscionable," and added that she was particularly concerned about stimulus money ads masquerading as news. McCaskill said she was "amazed" that journalists had not complained more about the ads, though she said it may be because they were too focused on trying to keep their jobs.
Citing FCC action two years ago against Comcast, McCaskill conceded the FCC had taken some "limited action" already, but said she would contact the commission for an update given her continuing concerns.
But she also wanted to know what the Federal Trade Commission could do about it, asking why there wasn't a way for the FTC to say: "You can't do that. You can't pretend like you are broadcasting news when it is a paid advertisement."
David Vladeck, director of the Bureau of Consumer Protection, at the FTC, was a witness at the hearing. He told the Senator that the FTC "can and does" say that, citing an action against a dietary supplement whose ad looked like a TV program. But he pointed out that the FTC targets its limited resources on public health issues and economic loss.
"Where we see an infomercial masquerading as real news, we will add a charge. But in our view, given our enforcement priorities, the principal actor has to be the FCC."
He said the FTC didn't have the resources to go "one by one" after the fake news ads. C. Lee Peeler, president of the National Advertising Review Council, said he thought the industry had made a lot of progress in the past 20 years on the issue of TV ads that looked like newscasts. He said the additional complexity was that if it is a Video News Release, for which there was no direct payment, "there would be an issue about whether they could second guess the judgment of the news program."
McCaskill said she was talking about a paid ad. "It is deceptive on its face. Give me that case in front of a juror, I'll do it pro bono and get the result that we all know would happen if a jury looked at it. This is not complicated. It's common sense."
Greg Renker, co-chairman of direct-response giant Guthy-Renker LLC, said he agreed that what McCaskill was describing was "deceptive and wrong." He said it was harmful to the industry and consumers."
McCaskill advised the industry to "get aggressive," adding, "because I will follow-up with the FCC."
The hearing was in the Consumer Protection, Product Safety, and Insurance Subcommittee of the Commerce Committee. It dealt with a number of ad-related issues including the FTC's review of its guidelines on green marketing and its proposal to change its guidelines on testimonials to require that "results may vary" and similar "atypical" qualifiers be clearer to consumers, and that, where possible, advertisers include an average result, not just the best case.
Renker and Peeler both had problems with requiring an average result. Renker said determining that average could be prohibitively expensive for some smaller companies, though not necessarily his, and would be hard to determine. For example, he said he launched his company with motivational tapes, for which there was no measurable "average" of success.
Vladeck said that in cases where it was not possible, the alternative would simply have to be a large, conspicous "results may vary" or "are not typical" disclaimer. Renker remained concerned about adding the "average requirement," but said he was all for making the "atpyical" disclaimers larger, clearer and ubiquitous.
Jon Congdon, president of Product Partners, which markets dietary supplements and exercise/weight loss programs, said he was also concerned about the effect of the guideline change on broadcasters trying to interpret it.
He pointed to the FTC's "red flag" initiative, in which it asked broadcasters to be on the lookout for specious claims for diet supplements, like losses of more than two pounds a week.
Congdon said a broadcasters refused to run the testimonial ad for his product because it made a claim of over two pounds, though it was for a combination of diet and mostly exercise, which should not have raised the red flag. The guildelines had not made it clear that the flag should only have been raised on the supplement alone, he said, and "we were harmed in the marketplace" as a result.
Committee Chairman Mark Pryor (D-Ark.) said Congress was looking to find a way to target bad actors without hurting the "good guys," But he insisted that, if necessary, the government would have to step in and insure that "information on our airwaves is accurate and truthful."