To prohibit the targeted marketing to minors of adult-rated media as an unfair or deceptive practice, and for other purposes.

June 20, 2001

Mr. ISRAEL (for himself and Mr. OSBORNE) introduced the following bill; which was referred to the Committee on Energy and Commerce

To prohibit the targeted marketing to minors of adult-rated media as an unfair or deceptive practice, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Media Marketing Accountability Act of 2001'.

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) Children have easy access to a variety of media and entertainment options without leaving their own homes. The vast majority of homes with children have a VCR, a CD player, and either a video game console or a personal computer.

(2) Children, and especially teenagers, spend a large amount of time listening to music, seeing movies, and playing video games. Specifically:

(A) Children ages 8 through 13 spend approximately 3 hours per week in a movie theater, on average. In addition, 62 percent of children ages 9 through 17 spent an average of 52 minutes per day watching video tapes.

(B) 82 percent of children play video games, and do so for 33 minutes per day, on average.

(C) Children ages 14 through 18 listen to music approximately 2 1/2 hours per day on average.

(3) Teenagers spend tens of millions of dollars annually on movies, music, and video games, making them a highly valuable demographic group to the producers and distributors of entertainment products.

(4) Media violence can be harmful to children. Most scholarly studies on the impact of media violence find a high correlation between exposure to violent content and aggressive or violent behavior. Additional studies find a high correlation between exposure to violent content and a desensitization to and acceptance of violence in society.

(5) On September 11, 2000, the Federal Trade Commission reported that companies in the music, movie, and video game industries routinely target children under age 17 in the advertisement of adult-rated products. Specifically:

(A) The Commission found that 80 percent of the R-rated movies studied had been targeted to children. In addition, marketing plans for 64 percent of the R-rated movies studied explicitly mentioned children under age 17 as part of the target audience.

(B) The Commission found that all marketing plans for music recordings with explicit content labels either explicitly mentioned children under age 17 as part of the target audience or called for ad placement in media that would reach a majority or substantial percentage of children under age 17.

(C) The Commission found that 70 percent of Mature-rated video games studied were targeted to children under age 17, and 51 percent explicitly mentioned children under age 17 as part of the target audience. Additionally, the Commission found that 91 percent of the video game manufacturers studied had at one time expressly identified children under age 17 as the core, primary, or secondary audience of an M-rated game.

(6) To correct this problem, the Commission called on these industries to adopt voluntary, uniform policies expressly prohibiting these practices and to enforce these policies with real sanctions for violations.

(7) To date, as the Commission noted in a follow-up report released on April 24, 2001, only the video game industry has agreed to adopt such a marketing code. The Commission also noted that, despite some encouraging changes in behavior since the release of the Commission's original report in 2000, a number of companies in all three industries have nevertheless continued to market adult-rated products in venues popular with children.

(8) Because the entertainment industry continues to target its advertising of adult-rated products to children, there is need for narrowly targeted legislation to prohibit, as a false and deceptive trade practice, the targeting of children in the advertisement and other marketing of products rated for adults, and to authorize the Federal Trade Commission to stop these practices.

TITLE I--TARGETED MARKETING OF ADULT-RATED MEDIA TO CHILDREN

SEC. 101. PROHIBITION ON TARGETED MARKETING TO MINORS OF ADULT-RATED MEDIA AS UNFAIR OR DECEPTIVE PRACTICE.

(a) IN GENERAL- The targeted advertising or other marketing to minors of an adult-rated motion picture, music recording, or electronic game, in or affecting commerce, shall be treated as a deceptive act or practice within the meaning of section 5 of the Federal Trade Commission Act (15 U.S.C. 45), and is hereby declared unlawful.

(b) TREATMENT AS TARGETED ADVERTISING OR MARKETING TO MINORS- For purposes of this section, the advertising or other marketing of an adult-rated motion picture, music recording, or electronic game shall be

treated as targeted advertising or other marketing of such product to minors if--

(1) the advertising or marketing--

(A) is intentionally directed to minors; or

(B) is presented to an audience of which a substantial proportion is minors; or

(2) the Commission determines that the advertising or marketing is otherwise directed or targeted to minors.

SEC. 102. SAFE HARBOR.

(a) IN GENERAL- The advertising or other marketing to minors of an adult-rated motion picture, music recording, or electronic game shall not be treated as targeted advertising or other marketing to minors, for purposes of section 101, if the producer or distributor responsible for the advertising or marketing adheres to a voluntary self-regulatory system with respect to such product that satisfies the criteria under subsection (b) and is subject to the sanctions referred to in subsection (b)(3).

(b) CRITERIA- The Federal Trade Commission shall, by rule, establish the criteria referred to in subsection (a). Under such criteria, a voluntary self-regulatory system shall include the following elements:

(1) An age-based rating or labeling system for the product in question.

(2) For all products that are rated or labeled as adult-rated under such system--

(A) prohibitions on the targeted advertising or other marketing to minors of such products; and

(B) other policies to restrict, to the extent feasible, the sale, rental, or viewing to or by minors of such products.

(3) Procedures, including sanctions for non-complying producers and distributors, meeting such requirements as the Commission includes in such criteria in order to assure compliance with the prohibitions and other policies referred to in paragraph (2).

SEC. 103. REGULATIONS.

(a) IN GENERAL- The Federal Trade Commission shall prescribe rules that define with specificity the acts or practices that are deceptive acts or practices under section 101.

(b) IN PARTICULAR- The rules under subsection (a)--

(1) shall specify criteria for determining whether or not an audience is comprised of a substantial proportion of minors for purposes of section 101(b)(1)(B); and

(2) may include requirements for the purpose of preventing acts or practices that are deceptive acts or practices under section 101.

SEC. 104. MATTERS RELATING TO REGULATIONS.

(a) IN GENERAL- The Federal Trade Commission shall prescribe rules under sections 102 and 103 in accordance with the provisions of section 553 of title 5, United States Code.

(b) TIME LIMIT- The Commission shall prescribe the regulations required under sections 102 and 103(b)(1) not later than 12 months after the date of the enactment of this Act.

SEC. 105. ENFORCEMENT.

(a) IN GENERAL- This title shall be enforced by the Federal Trade Commission under the provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.).

(b) ACTIONS BY COMMISSION-

(1) IN GENERAL- The Commission shall prevent any person from violating section 101, or a rule of the Commission under section 103, in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of this title.

(2) PARTICULAR RULES- A rule prescribed under section 103(b)(1) shall be treated as a rule prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)), and any violation of a rule prescribed under such section 103 shall be treated as a violation of a rule respecting unfair or deceptive acts or practices under section 5 of the Federal Trade Commission Act (15 U.S.C. 45).

(3) RIGHTS AND LIABILITIES OF PARTIES- Any person or entity that violates section 101, or a rule of the Commission under section 103, shall be subject to the penalties, and entitled to the privileges and immunities, provided in the Federal Trade Commission Act in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of that Act were incorporated into and made a part of this title.

(c) EFFECT ON OTHER LAWS- Nothing in this title shall be construed to limit the authority of the Commission under any other provision of law.

SEC. 106. DEFINITIONS.

In this title:

(1) ADULT-RATED- The term `adult-rated', in the case of a motion picture, music recording, or electronic game, means a rating or label voluntarily assigned by the producer or distributor of such product, including a rating or label assigned pursuant to an industry-wide rating or labeling system, which rating or label--

(A) indicates or signifies that--

(i) such product is or may be appropriate or suitable only for adults; or

(ii) access to such product by minors should be restricted; or

(B) in the case of a music recording, advises or signifies that such product may contain explicit content, including strong language or expressions of violence, sex, or substance abuse.

(2) MINOR- The term `minor' means an individual below the age established under the rating or labeling system in question to be an appropriate audience for adult-oriented material, but in no event includes an individual 17 years of age or older. If no specific age is so established under the rating or labeling system in question, the term means an individual less than 17 years of age.

(3) ADULT- The term `adult' means an individual who is no longer a minor.

(4) ELECTRONIC GAME- The term `electronic game' means any interactive entertainment software, including any computer game, video game, or on-line game, sold or rented on any tangible medium

or by any electronic or on-line medium by which the right to play a specified interactive-entertainment-software product is purchased.

(5) MOTION PICTURE- The term `motion picture' means any theatrical motion picture shown in a commercial theater or sold or rented by videotape, digital recording, or other tangible medium or by any electronic or on-line medium by which the right to play an individual theatrical motion picture is purchased, except that such term shall not include anything shown on broadcast television or cable television.

(6) MUSIC RECORDING- The term `music recording' means any recording of music sold or rented on compact disk, tape cassette, vinyl record, music video, or other tangible medium or by any electronic or on-line medium by which the right to hear a specified work of music is purchased, except that such term shall not include anything shown on broadcast television or cable television.

SEC. 107. EFFECTIVE DATE.

This title shall take effect 90 days after the date of the enactment of this Act.

TITLE II--OTHER MATTERS

SEC. 201. STUDY OF MARKETING PRACTICES OF ENTERTAINMENT INDUSTRIES REGARDING ADULT-RATED MATERIALS.

(a) IN GENERAL- The Federal Trade Commission shall conduct a study of the advertising and other marketing practices of the motion picture industry, music recording industry, and electronic game industry regarding adult-rated motion pictures, music recordings, and electronic games.

(b) MATTERS TO BE STUDIED- In conducting the study under subsection (a), the Commission may examine--

(1) whether and to what extent the industries referred to in that subsection direct to minors the advertising and marketing of adult-rated materials, including--

(A) whether such materials are advertised or promoted in media outlets in which minors are present in substantial numbers or comprise a substantial percentage of the audience; and

(B) whether such industries use other marketing practices designed to attract minors to such materials;

(2) whether and to what extent retail merchants, movie theaters, or others who engage in the sale or rental for a fee of products of such industries--

(A) have policies to restrict the sale, rental, or viewing to or by minors of adult-rated materials; and

(B) have procedures to ensure compliance with such policies;

(3) whether and to what extent such industries require, monitor, or encourage the enforcement of their voluntary rating or labeling systems by industry members, retail merchants, movie theaters, or others who engage in the sale or rental for a fee of the products of such industries;

(4) whether and to what extent such industries engage in activities to educate the public in the existence, use, or efficacy of their voluntary rating or labeling systems; and

(5) whether and to what extent the policies and procedures referred to in paragraph (2), any activities referred to in paragraphs (3) and (4), and any other activities of such industries are effective in restricting the access of minors to adult-rated materials.

(c) FACTORS IN DETERMINATION- In determining whether the products of an industry are adult-rated for purposes of subsection (b), the Commission shall use the voluntary industry rating or labeling system of the industry, both as in effect on the date of the enactment of this Act and as modified after that date.

(d) AUTHORITIES- In conducting the study under subsection (a), the Commission may use its authority under section 6(b) of the Federal Trade Commission Act (15 U.S.C. 46(b)) to require the filing of reports or answers in writing to specific questions, as well as to obtain information, oral testimony, documentary material, or tangible things.

(e) REPORTS-

(1) REQUIREMENT- The Commission shall submit to Congress and the public two reports on the study under subsection (a), as follows:

(A) An initial report, not later than two years after the date of the enactment of this Act.

(B) A final report, not later than six years after that date.

(2) ELEMENTS- Each report under paragraph (1) shall include--

(A) a description of the study conducted under subsection (a) during the period covered by the report;

(B) any findings and recommendations of the Commission arising out of the study as of the end of that period; and

(C) the identification of the particular producers and distributors, if any, engaged in advertising or other marketing practices relevant to such findings and recommendations.

(f) DEFINITIONS- In this section, the terms `adult-rated', `electronic game', `motion picture', `music recording', and `minor' have the meanings given those terms in section 106.

SEC. 202. SEPARABILITY.

If any provision of this Act, or the application of such provision to any person, partnership, corporation, or circumstance, is held invalid, the remainder of this Act, and the application of such provision to any other person, partnership, corporation, or circumstance, shall not be affected thereby.

END