SF Wine Blog

Exploring wine in and around San Francisco.

The FTC & Winery Online Advertising

5 Comments

I was rather amused that the Federal Trade Commission’s decision to collect information regarding the alcohol industry’s digital advertising practices caused a mini-uproar in the wine world.

Last month, the FTC (a regulatory agency tasked with protecting consumers from unfair and deceptive advertising) requested advertising and marketing data from fourteen major alcohol beverage companies.  As part of that request, the FTC also sought information regarding digital marketing practices and data collection.

Some claimed that this was a sign of Big Brother  “spying on winery tweets.” Others worried that this would result in onerous regulations governing digital advertising by wineries. As a lawyer with experience dealing with regulatory agencies, I found very little to get worked up about in the FTC’s actions.  While the data requests will certainly cause some headaches for the general counsel and marketing departments of the fourteen companies served by the FTC, there is no indication that this is the beginning of aggressive government monitoring of wineries’ digital advertising.  You can review the full scope of the FTC’s order here:  http://www.ftc.gov/os/2012/04/120412alcoholreport.pdf

Instead, it appears that the FTC is interested in learning how alcohol beverage companies are integrating websites and social media tools in their advertising campaigns; if and how they are storing and using information collected from website visitors; and if they are implementing safeguards to avoid marketing to the under-21 crowd.

The result of the FTC’s data gathering effort is likely to be unremarkable.  As in years past, the FTC will use the data collected to write a report with recommendations for how the alcohol beverage industry can better regulate itself.  The key industry organizations (The Beer Institute, The Wine Institute, and the Distilled Spirits Council) can then amend their standards accordingly.  Indeed, this is precisely what happened the last time the FTC issued a report in June 2008.

There’s no reason for wineries to start fretting that there will be aggressive government review of each and every tweet, Facebook post, or blog.  The industry will likely continue to self regulate, meaning that wineries would be well served by reviewing and complying with the Wine Institute’s Code of Advertising Standards.  In addition, industry organizations should work with the FTC to provide guidance to ensure that any government recommendations regarding digital advertising are practical and easy to implement.

*****

John Trinidad is an attorney based in San Francisco, and is admitted to practice in California, New York, and Washington, DC.    

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5 thoughts on “The FTC & Winery Online Advertising

  1. John,
    Great article but I disagree knowing the nuances that are drive wine industry marketing policies and the lack of age in most SM networks. This could potentially become a huge headache.
    Best,
    P

    • Thanks for the comment, Paul. I think we may be talking past each other, and that we might actually agree on a lot of these issues.

      First, I don’t think the announcement from the FTC can come as any surprise. Given the history of regulations re alcohol beverage advertising, it is not that surprising that regulations would apply new mediums. Moreover, the FTC announced that it would be collecting this type of data over a year ago, and there have been two notice and comment periods.

      Second, the FTC hasn’t proposed any new rules yet, and we are a long way from the report and recommendations being issued. So I don’t think there’s any evidence that onerous regulations are imminent. But I agree with you that this is a process that should be monitored closely (especially given the ongoing evolution of social media networks).

      The good news is that there is a huge opportunity for the Wine Institute and other industry organizations to work with the FTC to ensure that any recommendations are not only clear, but easy to implement from a technology stand point. I think tech-savvy companies like Vintank can provide valuable insight that can inform the debate and help shape the regulatory environment. And I hope that’s something we agree on!

      Have a great weekend!
      -John

      PS – If you’re in Healdsburg this weekend, stop by Arnot-Roberts on Saturday. Would be great to meet up.

      • John,

        Good post. I agree with you that the FTC requests are more of an opportunity than a problem. Integration of regulatory initiatives across different social media platforms can only help the regulated beverage community in the long run.

        John

  2. Pingback: Terroirist: A Daily Wine Blog » Daily Wine News: The Juice

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