FTC Declines to Regulate Product Placement — Advertisers Breathing Again
The FTC announced in February that it would not be proposing any new rules regarding product placement on television shows, despite its widespread use by advertisers to showcase products.
Commercial Alert, a consumer watchdog organization, has asked the FTC to investigate the practice of placing products such as household items, toys and other consumer goods in television shows. The watchdog group suggested that an on-screen disclosure be made each time a specially placed product was shown.
The FTC, after its own investigation, found that mere product placement did not violate Section 5 of the FTC Act, which prevents unfair and deceptive advertising practices. It reasoned that most product placements do not actively sell the product nor do they contain objective claims about the product. In cases where such claims were made, the FTC noted that the current regulations would suffice.