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9/10 7 December 2010 Theme: Children [From the Editor] Protecting children can also extend to the online world ...................................................................2 Articles Opinion or paid advertisement? .......................................................................................................3 Children are under special protection on consumer markets ...........................................................4 Advertising in the public space causing debate ...............................................................................5 Public space raises the bar for good practice in marketing ..............................................................6 Sweep of websites for children and young people ...........................................................................8 Food advertising aimed at children needs to be reined in - which is the answer, the carrot or the stick? .........................................................................................................................................9 McDonald’s now only advertises to adults .....................................................................................11 Minors shop, but only to a limited extent........................................................................................12 The Internet undermines age rating of programmes ......................................................................13 How will children fare in the reform of the Act on the Classification of Audiovisual Programmes?................................................................................................................................15 Product placement to remain in programmes that interest children ...............................................16 Who will grab the beer can from the young drinker's hand?...........................................................18 Editorial staff Responsible Editor-in-Chief: Anja Peltonen Editors: Laura Salmi, Maija Puomila E-mail: [email protected] Archives and subscription: http://www.kuluttajaoikeus.fi ISSN 1796-5497 Current Issues in Consumer Law 9/2010 7. Dec. 2010 [From the Editor] Protecting children can also extend to the online world In our society, children are protected from things that can have a negative effect on their development. The advancement of technology has resulted in children potentially being exposed to an increasingly extensive array of influences. There are some who find the protection of children in these circumstances so difficult that we might as well give up even trying. They seem to think that, with the Internet opening up a world of potentially questionable influences to children, perhaps we in Finland should not even bother to continue drafting legislation to protect children. This type of thinking is evident in the working groups that have recently worked on reform of the Act on the Classification of Audiovisual Programmes and alcohol advertising. Under a recent proposal, the new Act on the Classification of Audiovisual Programmes would only prohibit the provision of K-18 rated programmes to those under eighteen years of age, while other age ratings would be merely recommendations. This is based on the view that the Internet is full of programmes with no system for identifying the viewer's age that Finnish legislation does not extend to. The working group on reforming alcohol advertising legislation, for its part, suggested that restricting image advertising for alcoholic beverages is not to be recommended because doing so might simply result in more advertising moving to the Internet. Despite these views, the Internet is not a completely wild and uncontrolled environment. This newsletter includes examples of how the Consumer Agency has, under the Consumer Protection Act, taken action against outdoor advertising and Internet marketing directed at Finnish consumers and whose contents have been contrary to good practices concerning marketing to underage consumers. The business sector often tries to distance itself from these problems and suggests that media education and parental responsibility should be emphasised more. It's true that teaching children critical thinking and advertising literacy is important. Good examples of this include the American "Admongo" and "Don't buy it" websites and the British "Media Smart" advertising literacy programme. However, education alone is not enough to protect the position of children and the young. Despite the role of the Internet, legislators should continue to give parents and their underage children clear messages on what is permitted and what is not. We should not compromise on the level of regulation simply because regulations can be breached or because websites outside Finland employ practices that are contrary to Finnish legislation. Besides, the age classification of audiovisual programmes and restricting alcohol advertising are small steps compared, for instance, to the objectives stated in the UK Government Programme. They aim for no less than strict intervention in irresponsible advertising targeting children and fighting against the sexualisation and commercialisation of childhood. Admongo.gov Don’ t buy it Mediasmart UK Coalition programme for government Anja Peltonen Director 2 Current Issues in Consumer Law 9/2010 7. Dec. 2010 Opinion or paid advertisement? My 12-year-old daughter is enthusiastically showing me a fashion blog featuring an attractive young woman writing about her cool new clothes. The blogger is shown on the website in beautiful photos, dressed up in the trendiest colours for this winter season and urging her readers to quickly go and buy the clothes from the specified shop before they are sold out. My daughter feels the sense of urgency. She simply must have the fur vest worn by the blogger. And why shouldn't she, after all, the blogger says that at that quality and price, it is simply the Must Have item of this winter! My daughter seems to sincerely believe that the blogger simply wants to show her readers the nice clothes she's bought for herself. This might be true in some cases. However, many popular bloggers receive free samples, event invitations and money from businesses in exchange for featuring their products. Could these gifts and incentives have some influence on what products get the most praise in the blog? According to surveys, the majority of readers consider blogs to be as reliable as newspapers and online publications. However, blogs differ significantly in terms of how easy it is to tell advertising and editorial content apart. In magazines, adverts and editorial content are generally kept apart and there is no hidden advertising in the articles themselves. Independence from commercial influence is a question of honour for many journalists. Blogs, however, are an altogether different proposition. Banner adverts on websites are quite easy to identify as marketing, but the same can't be said for the blogger's articles. It may be hard to determine whether an article is simply an expression of the author's honest opinion or a paid advertisement. Sponsoring popular blogs that get tens of thousands of hits per month is undoubtedly an effective form of marketing communications for many businesses. As consumers tend to trust other consumers' recommendations, marketing messages spread quickly through word of mouth online. My daughter and other readers may not even suspect that they are being commercially influenced by the blogger. However, the Consumer Protection Act states that marketing must clearly show its commercial purpose and on whose behalf it is implemented. In other words, the consumer must be able to identify advertising as such and know who the advertiser is. A blogger might not realise that he or she should inform readers of sponsoring arrangements and how they might affect the opinions expressed. In fact, that would be the responsibility of the companies that are behind the sponsoring. Some bloggers specify their corporate partners on their website, but the companies concerned should require that bloggers openly disclose how such partnerships influence product presentations and reviews. If this were the case, perhaps my daughter would take a slightly more critical view of the praise lavished on the lovely fur vest. Katri Väänänen The Consumer Agency's legal adviser responsible for matters related to children and underage consumers 3 Current Issues in Consumer Law 9/2010 7. Dec. 2010 Children are under special protection on consumer markets Society recognises the special position of children and young people as citizens and consumers. Legislation, policies and guidelines form a framework to protect minors. One of the objectives of the Government's consumer policy programme for 2008-2011 is to improve the position of those needing special protection, such as senior citizens, immigrants, children and the young as consumers. New challenges in this regard are introduced by modern technology and the new methods of marketing and commercial activity it provides. Advertising is also increasingly targeted at children and the young. While young people are often more proficient than adults at using new electronic tools, their capacity and abilities with regards to entering into agreements are restricted, the consumer policy programme states. Children need the presence and support of adults in using media. They need restrictions in terms of time and content depending on their developmental stage. Parents, for their part, need support from professionals in including media education in parenting. Education to teach appropriate attitudes also plays a significant role in improving the extent to which parents are informed of their children's daily use of media. Legislative provisions and guidelines Minors have always held a special position in the work of the Consumer Agency. The importance of their position has been emphasised in both individual cases of supervisory intervention and through issuing broader guidelines. The first general guidelines on Children and marketing were issued in 1997 and subsequently replaced in 2004 by more extensive Guidelines on Minors, marketing and purchases, which was based on case law from both the consumer authorities and the courts. The amendment of the marketing provisions in the Consumer Protection Act in 2008 also saw the introduction of a special provision on marketing targeted at minors. With the amendment, the guidelines and case law based on the Consumer Protection Act's general provision on good marketing practices were more directly written into law. Under the special provision, marketing that is directed at minors or otherwise generally reaches them is considered contrary to good practice in particular if - it takes advantage of the inexperience or gullibility of minors - it is likely to have a negative impact on the balanced development of minors - it attempts to infringe on the parents' right to raise their children. Assessment of whether a practice is contrary to good practice takes into account the minor's age, level of development and other circumstances. The younger the children concerned, the stricter the standards applied are. In addition to age and level of development, the media or marketing channel used can also influence the assessment. The same marketing that is in line with good practice when directed at adults may be contrary to good practice when directed at children. However, the special provision does not apply only to marketing that is directly targeted at children. Marketing that "generally reaches minors", as stated in the law, includes e.g. outdoor and storefront advertising. The provision concerning children can apply to them even when the marketing is not specifically targeted at minors. 4 Current Issues in Consumer Law 9/2010 7. Dec. 2010 A Government decree on inappropriate practices in marketing and customer relationships was issued in conjunction with the amendments to the marketing provisions in the Consumer Protection Act. Under the decree, an advertisement cannot directly urge a child to buy the product being advertised or incite a child to persuade an adult to buy it for him or her. UN Convention and self-regulation Under Article 18 of the UN Convention on the Rights of a Child, the dignity of children and the parents' right to raise their children must be respected. Article 17 of the Convention concerns mass media. It states that the states that are signatories to the Convention shall encourage the development of appropriate guidelines for the protection of the child from information and material injurious to his or her well being. Finland signed the Convention in 1991. The International Chamber of Commerce has issued the Consolidated ICC Code of Advertising and Marketing Communication Practice with guidelines for businesses concerning the self-regulation of advertising. Under the basic international rules on advertising, advertising must be compliant with law and good practice, honest and truthful. The need for social responsibility in advertising must be recognised in designing every advert. Article 14 of the Code comprises rules applied to minors as defined in national legislation. The Council of Ethics in Advertising applies the Code in issuing statements. Consumer Ombudsman’s guidelines on Minors, Marketing and Purchases Advertising in the public space causing debate Public advertising with regards to children has, at times, aroused discussion among parents, the media and policymakers. Debates over the headlines of tabloid newspapers have also touched on issues of freedom of speech. Children have the right to not be exposed to advertising and marketing communication that is inappropriate for their age and level of development in the environment they are growing up in. Advertising in public spaces is part of the daily environment where children and young people operate. Movie posters, lingerie adverts at bus stops, pornography in shop display windows and the headline placards of tabloid newspapers have evoked broad discussion in the media concerning the appropriateness of advertising. The matter has also been discussed in city councils and in a written question in Parliament. The headline placards of tabloid newspapers have also been discussed from the perspective of freedom of speech. According to the Federation of the Finnish Media Industry and the tabloid newspapers themselves, their headline placards are not advertising but rather journalistic content. As such, it should not be assessed based on the marketing provisions of the Consumer Protection Act. However, the Council of Ethics in Advertising has found headline placards by the tabloids Ilta-Sanomat (”Father kills son in the middle of breakfast”) and Iltalehti ”Mother burns child and herself” as being against the basic international rules of advertising in its statements. 5 Current Issues in Consumer Law 9/2010 7. Dec. 2010 Ombudsman for Children Maria-Kaisa Aula has also participated in the discussion. The Office of the Ombudsman for Children has published a survey of parents' experiences titled Tabloid newspaper headline placards as part of the environment children grow up in". In the course of the reform of the marketing provisions in the Consumer Protection Act, the Commerce Committee of the Finnish Parliament discussed tabloid headline placards. The Committee unambiguously stated that in addition to being headline posters as referred to in the Freedom of Speech Act, the placards are also advertising intended to increase sales of the newspapers. As such, there is no obstacle to applying the consumer protection act to marketing through the use of tabloid headline placards. The placard is not an independent product, but rather a sales poster that can't be purchased. The Commerce Committee also stated that tabloid advertising through headline placards must be effectively monitored, partly for the purpose of protecting minors and their development from inappropriate influences. The Consumer Agency will monitor the contents of tabloid headline placards and assess their legality if necessary. Public space raises the bar for good practice in marketing Even when a product or service being advertised holds no particular appeal to children, they may end up seeing the advertisement anyway. In such circumstances, marketing must take into consideration the special position of children. The clause concerning children in the marketing provisions of the Consumer Protection Act does not only apply to marketing that is directly targeted to minors. It also applies to marketing that reaches children, for instance in a public space, even when its not particularly directed at minors. An outdoor advertising campaign may be directed at adults, but children can't avoid seeing it and their parents can't keep them from being exposed it either. Decisions made by the Consumer Agency over the years indicate what the limits of acceptable outdoor advertising are. Sex fairs can be advertised within reason Sex fairs and sex products can be advertised with erotic undertones, but outdoor advertising and storefront displays must be designed with awareness of the fact that children will also be exposed to them. Pornography may not be used in the marketing. The Consumer Agency has been in negotiations with the organisers of the Sexhibition fair regarding the manner in which the event is advertised. The fair has been advertised in outdoor billboards and on the sides of city buses. The company organising the event was informed of the legal provisions concerning good marketing practice and shown examples of appropriate advertising. The company added a gateway page to its website warning visitors of material that is unsuitable to those under 18 years of age. 6 Current Issues in Consumer Law 9/2010 7. Dec. 2010 Pornography not permitted in public spaces The storefront display of a sex shop is public space that a child walking by can't avoid seeing. As a result, the business is responsible for what products are marketed in the display. Exposing minors to materials that are unsuitable to their age and level of development in storefront displays is not permitted. The album ”Teille vai meille” (”Your place or mine”) by the band Ripsipiirakka was advertised inside buses with an advert featuring an image of a woman spreading her legs and between the legs there was a drawing of the female genitalia inside a heart shape. The band was shown sitting underneath the drawing, looking up towards the woman's crotch. This pornographic advert that was demeaning to women was seen by all bus passengers from babies to senior citizens. Lingerie adverts at bus stops, underground train stations and billboards also evoke discussion from time to time concerning their appropriateness for children and the young. They can also make some adults feel uncomfortable. Marketing is not assessed by individual standards, but rather at a general level and in terms of socially acceptable values. Advertising lingerie and underwear should be allowed, even in public spaces, as long as the advert does not have pornographic or discriminatory tones. TV advertising reaches children and influences the young Television commercials reach a wide audience of all ages. Hamburgers are a product that interests children more than household detergents. This combination calls for marketers to assess their advertising from the perspective of a child when designing their campaigns. A television commercial for a hamburger featured sharp knives with blood-like red liquid splattering around in the style of horror movies. At the end of the spot, it was revealed that the scene actually depicted tomatoes being chopped up and the "blood" was in fact tomato juice. A threatening and scary commercial can cause the same anxiety in a child as an actual depiction of violence on television. Children tend to take advertisements seriously. They are not necessarily able to see the humour in how the commercial uses horror movie elements for effect, the Consumer Agency pointed out in its statement on the matter. While the advertisement was not targeted at children per se, it was shown during the hours of the day when children watch television and thereby reached them. The Consumer Agency required the marketer to only show the advertisement after 9 p.m. Television advertising also has a strong influence on pre-teens and teens. A telecom operator's television ad campaign featured four young women in scout uniforms and an older man in various situations. Consumers who contacted the Consumer Agency regarding the campaign considered the ads sexist and even saw references to sexual abuse. A person's self-image is shaped during childhood and the teenage years. Advertising influences this developmental process in part. The marketer in question was told that the campaign in question had a strong undertone of sexuality and the behavioural models depicted in it were stereotypical, demeaning and objectifying to women. Macho role models online When a product that interests children and teenagers is marketed online, the rules that apply are similar to those governing television advertising. The bar for what constitutes good practice is set higher than in, for instance, targeted print media. Online advertising reaches children and young people on a broader basis. 7 Current Issues in Consumer Law 9/2010 7. Dec. 2010 A website marketing M&M's sweets had a number of sexual references. Visitors were told to check out a hot striptease that would get them to salivate and send a link to the website to their friends. The site requested visitors who were sending the link to state their year of birth to determine that they were 12 years of age or older. However, in fact a person of any age was able to send the link to others by e-mail. The website for a soft drink featured a game aimed at young men. The game included tips on how to approach women to get as much sex as possible, as quickly as possible. The message to the visitor was that women are objects of little value whose main purpose is to offer sex. The humour of the game was no excuse for the sexually discriminatory attitude it promoted. A banner ad on a website for another soft drink featured a clown brandishing a chain saw. As the scene depicted featured a toy character in a Christmas scene, it was considered to be particularly interesting to children. While the advert was not directed at children per se, it reached that audience due to the nature of the product being advertised and the media used. Humour is no excuse for violence An advertisement for a retailer of young people's clothing published in the City-lehti magazine featured a young man's face after being physically assaulted. The ad copy urged readers to get new clothes from the shop in question or "you'll get beaten up, fool". An advert for a floorball stick used in both online and print media featured a dead goaltender on the ground with blood splattered around him. The text "No more saves" was written in blood on the wall next to the goaltender. Due to the media used, both adverts reached a wide audience that included minors. What the two ads had in common was that violence had no connection to the product being marketed. The black humour used in the ads was not deemed to be a mitigating factor in finding them to be contrary to good practice. 2004/40/1139, 2004/40/3974, 2006/40/7297, KUV/1518/41/2008, KUV/859/41/2009, KUV/8657/41/2009, KUV/1427/41/2010 Sweep of websites for children and young people The International Consumer Protection and Enforcement Network ICPEN, which is a network of authorities responsible for supervising marketing, has surveyed what type of marketing is directed at children online. The results for Finnish websites were encouraging. ICPEN organises annual Internet Sweep Days identify websites that use inappropriate marketing practices. Last September, the network focused its sweep on fraudulent and deceptive marketing either directed at children or young people or generally interesting to minors. Children and teenagers are heavy users of the Internet, but they often lack the ability to assess advertising critically. They are no longer simply targeted by marketers of toys and sweets, but also mobile content services and other entertainment, fashion, fast food and electronics. 8 Current Issues in Consumer Law 9/2010 7. Dec. 2010 The Consumer Agency participated in the sweep by examining 22 Finnish websites focused on gaming or recreation directed at children or otherwise interesting to children. The Agency sought to identify advertising that promises free goods or services, fraudulently suggests that the visitor has won a prize or encourages the visitor to enter a contest. The consumer does not, in fact, get anything for free as he or she will have to pay for at least postal charges, and the consumer does not win a prize, but rather only gets the chance to enter a contest. By entering the contest, they often also commit to a standing subscription for a product or service. Only one of the sites examined by the Consumer Agency included the type of misleading advertising sought. The website for Zed Plus featured a banner ad with the text ”This iPad could be yours! Click and win”. The advert failed to clearly disclose that entering the contest will result in a paid standing subscription for the Zed Plus ringtone service. The Consumer Agency contacted Zed Oy to point out that their marketing campaign took advantage of the gullibility and inexperience of young consumers. The company was urged to rectify the situation and avoid repeating the mistake in the future. Two gaming sites for children, the Pelikone (Game Machine) site maintained by Sanoma News and the "Hauskat naamat" (Funny Faces) page on www.999pelit.com featured ads for quick credit. The Consumer Agency contacted Sanoma News to remind them that minors can't enter into credit agreements and, therefore, marketing services related to credit on websites targeted at children is not permitted. The Agency was unable to reach the company behind the "Hauskat naamat" website despite repeated attempts. Zed Oy and Sanoma News responded by stating that they will take the necessary action to rectify the problems pointed out by the Consumer Agency. KUV/7550/41/2010 www.icpen.org Food advertising aimed at children needs to be reined in - which is the answer, the carrot or the stick? Many kinds of junk food are advertised to minors with the emphasis on irrelevant information, toys and contests. While there have been some positive changes, selfregulation in the industry is not enough. The increase of obesity among children and the young has for long been a growing concern in the EU. The increase in weight problems and obesity is the result of an imbalance between energy intake and consumption. People eat too much, eat the wrong kinds of food and get less exercise than before. Unhealthy foods that contain high levels of fat, sugar and sodium are often marketed aggressively. 9 Current Issues in Consumer Law 9/2010 7. Dec. 2010 In 2004, the Consumer Agency joined forces with the National Public Health Institute of Finland (now the National Institute for Health and Welfare) to issue recommendations concerning the food marketing aimed at children. The problem with food marketing targeted at children is often the excessive emphasis on toys and contests. In addition, marketers often provide false or irrelevant information regarding the healthiness of the products advertised. Healthy foods are barely marketed to children at all. A new trend in food marketing is that of marketing vitamins and food supplements to children with ads featuring, for instance, Disney characters. The main problem from a supervisory standpoint is presented by large global food companies. A survey of fast food marketing aimed at children conducted by Consumers International indicates that, despite commitments made to the EU, companies have not made significant changes to how they operate. The Finnish Consumers' Association has campaigned for the healthiness of foods aimed at children. The Association's website has a dedicated section on the marketing of food products. Positive signals A sign of more positive development is the agreement between the World Heart Federation and PepsiCo in March 2010. Pepsi will completely discontinue providing sugary drinks in primary and secondary schools by 2012. Coca-Cola has also stated that it will refrain from offering sugary drinks in primary schools if the students' parents or the school district so request. In June, the City of Vantaa resolved to have all soft drink and sweets vending machines removed from comprehensive schools. The City of Espoo is discussing a similar move. In the United States, the City of San Francisco has passed an ordinance to prevent restaurants from offering toys with children's meals unless they contain less than 600 calories. In addition to being under the calorie limit, meals with toys also have to include vegetables or fruit and the drink must not have unnecessary amounts of sugar. Self-regulation or legislation The WHO issued a set of recommendations on the marketing of foods and non-alcoholic beverages to children in May. The guidelines were drafted by a WHO working group where Finland was represented by the Consumer Agency and the Ministry of Social Affairs and Health. It remains to be seen whether the recommendation will lead to changes in practice or will legislative methods of intervention in marketing be required. The issue of food marketing to children is also highlighted in the Directive on Audiovisual Media Services issued by the European Parliament and the Council. The Directive encourages media service providers to develop codes of conduct regarding inappropriate commercial communication, accompanying or included in children's programmes, of unhealthy foods and beverages. The Finnish Government's proposal related to the implementation of the Directive states that the Consumer Ombudsman's case law is clear enough to allow for rules of conduct to be established in the industry. The Government considers goals related to national health a high priority. The industry should establish rules of conduct concerning the marketing of foods that are high in fat, sodium and sugar to minors. The Government will continue to monitor developments on this front. 10 Current Issues in Consumer Law 9/2010 7. Dec. 2010 In its work related to legislative preparation the Consumer Agency has often called attention to the fact that self-regulation is often not effective in reality. Issuing specific regulations must be considered if effective self-regulation fails to occur. Consumer Ombudsman's Guidelines on Children & Foodstuffs Marketing Project between the EU and leading food and beverage manufacturers to change food and beverage marketing aimed at children Consumers International recommendation on food marketing to children Consumers International survey on fast food marketing to children: Fried and tested - An examination of the marketing of fast food to children (2009) The Finnish Consumers' Association's website on food marketing WHO recommendation on food marketing aimed at children McDonald’s now only advertises to adults In 2002 the Consumer Agency took McDonalds to the Market Court over an advertisement whose main message was the toy given with a children's meal. However, the company has since changed direction. We talked to Heli Ryhänen, Head of Communications at McDonald's Finland, about the company's current policies with regards to marketing to children. McDonald's is one of the best-known restaurant chains in Finland and it counts a large number of families with children among its customers. How do you take the special position of children into account in your marketing? Children have a very limited ability to understand messages in the media. In addition to complying with national legislation, all McDonald's restaurants in Finland and elsewhere in Europe have a common code of conduct with regards to marketing directed at children. In Finland, we do not target children directly with any advertisements. We also refrain from advertising in children's media or buying airtime in children's programmes. Each advertising media that we use is carefully assessed on a case-by-case basis. What is the company policy with regards to toys given away with meals? San Francisco has recently made the news by passing an ordinance that states that toys can only be given away with children's meals if the meal's total calorie content is below 600. A toy or other non-food item sold with a meal is never the main message in our advertising. Also, such items are always available for purchase at the restaurant without having to buy a meal. This past October we included a children's book with the Happy Meal, which is a sign of our policy to encourage both children and adults to read more. What other aspects of responsible marketing are part of the strategy at McDonald's at present? McDonald's has for long made every effort to be open and transparent about the food we serve, for instance by informing customers clearly of the calorie and nutritional contents of 11 Current Issues in Consumer Law 9/2010 7. Dec. 2010 each menu item. We encourage both children and adults to maintain a balanced diet. McDonald's restaurants always offer a wide range of alternatives and we have very high standards regarding the quality and freshness of ingredients. Minors shop, but only to a limited extent A minor can only buy ordinary products and services with pocket money. This provision of the Guardianship Act also applies online and in the world of mobile content services. Age limits are useless without an effective system for identifying the customer's age. More than half of the complaints and reports pertaining to minors received by the Consumer Agency are related to the child's position as a contractual party. It is a subject matter that also surfaces frequently in the feedback received through the "The child as a consumer" section on the Consumer Agency's website. A child generally needs a guardian's consent to make purchases. The need for consent depends on the child's age as well as the price and attributes of the product. Under the Guardianship Act, a person under the age of 18 can only make purchases that are ordinary and of minor significance without a guardian's consent. In practice, these include reasonably priced products that can be bought with pocket money and are frequently purchased by minors of the same age. A fifteen-year-old can use money he or she has earned to make more significant purchases. A consumer may not buy on credit until they reach 18 years of age. The Agency has received consumer complaints concerning cases where businesses have disregarded the special position of minors. The minors in the cases have been able to make purchases they should not be allowed to do, both online and at traditional retailers. They have also been targeted with direct marketing of products such as vitamins and magazines, for which they can't make an agreement without parental consent. If a minor has made a purchase that he or she should not have been allowed to make, the transaction can be cancelled. Some such cases have also been brought to the Consumer Disputes Board. In one case, a 17-year-old girl had bought an evening dress and apparel for a total price of 856 euros and in another, a 15-year-old girl had purchased a tongue piercing with jewellery. In both cases, the Board found that, based on the price and use of the products, the purchases were not legal transactions that could be classified as ordinary and minor in significance. Neither of the girls had parental consent. Buyer's age must be identified Minors today can buy services on the Internet or with their mobile phones and, in doing so, accept complicated terms of agreement. Nevertheless, the provision of the Guardianship Act also applies to electronic agreements, i.e. the seller is responsible for identifying the customer. This requirement is also included in the Consumer Ombudsman's guidelines on the sales and marketing of mobile content services. 12 Current Issues in Consumer Law 9/2010 7. Dec. 2010 The contractual terms of a mobile phone subscription agreement are not always fair in this regard. They state that the customer, or in the case of a minor, his or her parents, are always liable for all costs arising from use of the mobile phone subscription. In other words, the customer is liable to pay for services regardless of who purchased them and what the size and nature of the purchase is. Customer identification is essential to determining the buyer's age. The adoption of reliable identification methods has been very slow. Legislation concerning two-factor identification entered into force this past autumn. The Act specifies the requirements for a provider of twofactor identification. One example of two-factor identification is the TUPAS identification service offered by banks. There are indications that new systems, including a mobile authentication service, will be launched on the market soon. According to Reijo Sventon, Managing Director of the Finnish Federation for Communications and Teleinformatics, long-promised mobile phone authentication systems will be available before the end of the year. With mobile phone authentication, users could sign on to online services by entering a PIN code on the handset. This type of authentication could solve the problems related to the position of minors as mobile phone users. In the past, paid services subscribed to by children have been a significant problem. The number of complaints received by the Agency with regards to such cases has decreased somewhat as of late. The biggest reason for this is likely to be the widespread use of blocking services. The problem with that solution is that blocking services can also keep the user from purchasing genuinely useful services such as buying a bus ticket by SMS. It should also be noted that blocking services or a clause in the subscription agreement does not give service providers an excuse to not identify the person buying a product or service. The Norwegian Consumer Ombudsman has issued a guideline stating that children may not subscribe to mobile content services. In Finland, however, there is no requirement for customers to notify the mobile phone operator when a mobile phone subscription is used by a minor. And even if the operator is informed of this, there is no system of using this information to identify the contractual party subscribing for mobile content services. Consumer Ombudsman's guidelines on the sales and marketing of mobile content services The Internet undermines age rating of programmes Will first-graders still be able to watch a K-16 rated TV series on the Internet after school? The legislative proposal on audiovisual programming suggests that no change in this regard is forthcoming. In October, the Government issued its proposal on the reform of the Act on the Classification of Audiovisual Programmes. The reform involves a good emphasis on consistent age ratings and media education. However, at the same time, it undermines the mandatory nature of the system of age ratings. Under the proposed amendments, viewers of all ages could watch and subscribe to K-16 rated programmes through Internet TV. 13 Current Issues in Consumer Law 9/2010 7. Dec. 2010 The legislative proposal has several encouraging aspects, such as consistent classification and adopting ratings for all types of audiovisual programming, symbols for programme content, media education for children and providing information to parents. However, what causes concern is the amendment related to the age ratings of films, which states that providing underage viewers with audiovisual materials that are unsuitable for a person of their age would only be prohibited and punishable in the case of K-18 rated programming. For the other age ratings, the responsibility of the provider of audiovisual programming would be limited to informing the viewer of the rating. K-16 rated materials would be freely available online. Age ratings on television, but not online Television broadcasters have agreed to use watershed hours in planning broadcast schedules. For instance, K-18 rated programmes are only shown after 11 p.m. Such scheduling systems do not apply online. A minor can place an SMS order for, or view on online TV, films and series that are rated K-18. Even if recommendations concerning age ratings exist, they are useless in the absence of reliable methods of identifying customers. However, identifying the contractual party is one of the basic principles of contract law. The responsibility for purchases made by minors lies with the counterparty to the contract, i.e. the seller. Under the legislative proposals, providing underage viewers with audiovisual materials that are unsuitable for a person of their age would only be prohibited and punishable in the case of K-18 rated programming. Other age ratings depend entirely on content symbols and age ratings implemented by the actors in the field. The Consumer Agency's view is that, at the very least, the K-16 rating should also be legally binding and backed up by sanctions. Expressions in the form of recommendations such as those used in the Government proposal with regards to the adoption of two-factor authentication, children's media education and the provision of information are simply not sufficient. Authentication technologies develop constantly. All subscription programme services should be under a requirement for providers to identify the contractual counterparty and allow minors to only make the types of purchases that are allowed by law. A new mobile authentication system based on electronic identification and signature technology through SIM cards is scheduled to be launched by the end of the year. Implementing a requirement to use this type of authentication by writing it into law would promote their development and adoption. The watershed time for K-16 rated programming should also be moved from 9 p.m. to 10 p.m. due to the fact that children today tend to go to bed later than in the past. The watershed hours should also apply in the weekends. There are many parents who work on the weekends or are otherwise unable to supervise their children's television use. Consistency with regards to watershed hours would make it easier for families to be aware of them. The Consumer Agency's statement on the reform of the Act on the Classification of Audiovisual Programmes 14 Current Issues in Consumer Law 9/2010 7. Dec. 2010 K-18 rated violence shown in the afternoon In April 2010, the Finnish Communications Regulatory Authority handed down its first injunction backed by a conditional fine over a breach of the child protection provisions of the Act on Television and Radio Operations. Three episodes of the series "Incredible Home Videos" shown on the JIM television channel included fights and street violence under the guise of entertainment. The Finnish Board of Film Classification rated the contents of the episode that was shown at 4.05 p.m. to be harmful to viewers under the age of 18. FICORA had reprimanded the same broadcaster back in December 2009 over the broadcast times of a similar show titled "Wild Police Chases". How will children fare in the reform of the Act on the Classification of Audiovisual Programmes? The Government proposal on the reform of the Act on the Classification of Audiovisual Programmes will be discussed in Parliament in the autumn. After a preliminary version of the proposal was published in March, varied views have been expressed in public regarding the proposal's impact on protecting children in the world of audiovisual media. The legislative proposal's starting point is that state-operated advance screening of audiovisual programmes would be discontinued and the focus would shift to new types of measures to improve the safety of children in the media environment, such as media education and the provision of information to guardians and teachers. However, the purpose is not to leave children and their parents at the mercy of the markets. The intention is to have the markets, or in other words, the providers of audiovisual programming, increasingly committed to protecting children. Age ratings, which are the primary instrument of protecting children, would remain in place, but the rating would be done by the providers of audiovisual programming themselves. The ratings would not be arbitrary as some concerned commentators have feared, as the providers of audiovisual programming would not be allowed to target the widest possible audiences by giving their products a low age rating. The ratings would be guided by a detailed code, a network-based system of age rating criteria, and the rating officers employed by the providers of audiovisual programmes would be trained in its use. The organisation responsible for this training and the supervision of age ratings would be the Centre for Media Education and Audiovisual Programming (MEKU), which would replace the Finnish Board of Film Classification. The system of age ratings would also be simplified. There would be no age ratings that would be merely "recommendations" while others are mandatory. Television programmes, films at the cinema and online subscription programme services would all be treated equally. The visual appearance of age ratings would also be more consistent and feature content symbols that indicate what the relevant criteria for the product's age rating are. The only exception would be that of computer and console games, which are already under the PanEuropean PEGI system. The age ratings for games would be adopted for all audiovisual programmes. This would eliminate the present problem of consumers being confused by two parallel systems of age ratings. All audiovisual programmes would be classified under the same system: Suitable for everyone, 7, 12, 16 and 18. 15 Current Issues in Consumer Law 9/2010 7. Dec. 2010 Why is this reform needed? Why eliminate the state-operated advance screening system that has been in place for decades? Can we be certain that the reform does not make the child's position worse? Of course, nothing is certain, least of all the funding required to implement the reform. The primary task of the new Centre for Media Education and Audiovisual Programmes is set to be the broad-based coordination and promotion of national media education. If funding for these new operations is insufficient, there is the threat that a significant part of the reform will not be implemented as planned. If that were to be the case, children might not, as the reform's ambitious goals state, become media-savvy and critical media users navigating the world of films, games, television and the Internet in an active and analytical manner. Nevertheless, we must have the courage to proceed with the reform. The tremendous increase in the amount of audiovisual programmes offered on the Internet and television forces us to find new ways of protecting children. Only a small proportion of the current supply of audiovisual programming falls within the age classification system. The legislative reform would bring a greater proportion of audiovisual programming under the ratings system, but at the same time, the supply of programming is increasing at a rapid rate. This calls for more emphasis on media education and the provision of information by broadcasters. Television channels are the most effective at this provision of information. The premise and objective of the legislative reform is the child, the child's interest and the child's welfare. In order to even get close to this objective, the implementation of the reform must be supervised. This supervision requires resources that the current Finnish Board of Film Classification does not have. If the Centre for Media Education and Audiovisual Programmes will suffer from the same lack of resources, the reform's chances of success are severely compromised. The reform calls for a new type of joint regulation between the audiovisual programme industry and a state authority. This can only succeed if the public has reason to have confidence in it. This requires supervision, and supervision in turn requires money. As such, the child's welfare in the reform ultimately depends on the funds available. With the national economy undergoing tough times, many other reforms and projects are also suffering from a lack of funding. However, the reform of the legislation on audiovisual programmes requires relatively reasonable funding. Those amounts, measured in hundreds of thousands rather than millions of euros, are worth investing. Children are worth it. Matti Paloheimo Director Finnish Board of Film Classification Product placement to remain in programmes that interest children A new legislative amendment allows product placement even in programmes that are watched by children. The interest of television companies has apparently taken precedence over the interest of children and their right to recognise marketing as such. 16 Current Issues in Consumer Law 9/2010 7. Dec. 2010 The amendments to the Act on Television and Radio Operations that entered into force last May made product placement permitted in certain types of programmes. The legislative amendment was part of the implementation of the Audiovisual Media Services Directive. During the preparatory work on the legislation, the Consumer Agency proposed that product placement should be prohibited not only in children's programmes, but also other programmes shown at times when children watch television. The Consumer Agency based the proposal on one of the core principles of the Consumer Protection Act: advertising must always be recognisable as such, and it must be recognisable by people of all ages. Now, children can watch for instance "Finland's Next Top Model" and see product placement by Max Factor cosmetics without understanding that the placement of the products in the show is an attempt to commercially influence them. Notifying viewers of product placement at the beginning and end of the show and after each commercial break does not provide enough information to children to make the practice recognisable to them. Parliamentary debate The Parliament debated the matter in its discussions on the legislative amendments. The Parliamentary Committee on Education and Culture stated that product placement can't be permitted in programmes shown during times when children watch television. The recognisability of advertising must be ensured even when using new methods of advertising placement. At the very least, product placement for products aimed at children should be prohibited. According to the Committee on Education and Culture, telling the difference between advertising and the normal content of a television programme is difficult for children under eight years and even for many elementary school students. Children do not develop the ability to critically understand commercial influence until approximately the age of twelve. Where small children are concerned, relying strictly on improving their media literacy is not enough. The Parliamentary Transport and Communications Committee disagreed. It suggested that product placement should be prohibited in children's programmes, but not in other programmes shown during times when children watch television. The Committee stated that such a rule would have a major impact on cooking, home decoration and theme shows broadcast during the weekends and daytime hours, noting that these types of shows are financially significant to broadcasters. The prohibition of product placement in such shows would compromise their ability to compete with international broadcasters. The Transport and Communications Committee suggested that the problems pertaining to the recognisability of advertising can be dealt with by taking critical feedback from viewers into account and creating a consistent code of conduct for the industry. It remains to be seen how far self-regulation alone can take us. The Consumer Agency's statement on the implementation of the Audiovisual Media Services Directive 17 Current Issues in Consumer Law 9/2010 7. Dec. 2010 Who will grab the beer can from the young drinker's hand? Change is being sought to drinking patterns among young people in Finland. According to a Ministry of Social Affairs and Health working group, this change can be achieved through self-regulation, family rules and media education. The Consumer Agency disagrees. Society must support this change by prohibiting the image advertising of alcoholic beverages. Industry self-regulation, media education of young consumers and parental responsibility are offered as a solution for many risks that children and young people encounter on the consumer markets. This seems to be the case for alcohol advertising as well. The Consumer Agency finds the legislative proposal to restrict the image advertising of alcoholic beverages very important. According to the Agency, image advertising should be prohibited and replaced by advertising based on product information, which is what has happened in France, Iceland, Norway and Sweden. It should be noted that marketing is only one factor influencing alcohol consumption. Nevertheless, its impact on alcohol consumption among minors is unquestionable. The majority of the working group set by the Ministry of Social Affairs and Health found that restricting the image advertising of alcoholic beverages is not necessary because it might not reduce exposure to alcohol advertising among children and young people. In other words, according to them, advertising claims such as "More fun with cider" can be countered through media education and parental responsibility. Self-regulation by advertisers would, for its part, keep image marketing reasonable. Studies send a clear message Studies indicate otherwise. A study that was also available to the working group finds that alcohol advertising results in consumers starting alcohol consumption earlier in their youth and also promotes drinking with the intention of becoming intoxicated. The advertisements appeal to young drinkers through music, characters, stories and humour. Young audiences are the least interested in alcohol advertising that contains product information only. Mild alcoholic beverages such as beer, cider and long drinks are advertised specifically through image-based campaigns. Young consumers who like alcohol advertisements more than others also believe that alcohol consumption has more positive consequences, estimate that their peers have more positive attitudes towards alcohol and consumer more alcohol, intend to use alcohol more frequently as adults and are more likely to consume alcohol in the future. Society must support parents The responsibility for alcohol consumption by minors can't be simply pushed on to the parents. Society must support them in carrying out that responsibility. It is difficult for parents to influence their children's attitudes if mainstream media is constantly suggesting that alcohol eliminates boredom and makes for a festive atmosphere. According to the National Supervisory Authority for Welfare and Health, the Alcohol Act's provision prohibiting the targeting of minors with alcohol advertising is particularly problematic in the supervision of alcohol advertising. 18 Current Issues in Consumer Law 9/2010 7. Dec. 2010 Even if alcohol advertising is not aimed at children, the majority of Finnish children and young people are exposed to it in daily life, for instance at bus stops and other types of outdoor advertising. Also problematic is advertising directed at consumers in their early twenties. While the target audience of those advertisements is old enough to consume alcohol drinks, the same adverts also appeal to minors. The Consumer Agency's statement on the memorandum by the working group on the restriction of alcohol advertising The task of the Finnish Consumer Agency is to safeguard and strengthen consumers' position in society. The Director General of the Consumer Agency also acts as the Consumer Ombudsman, and the Ombudsman's tasks are included in the activities of the Agency. The Ombudsman's responsibilities are to monitor and enhance the legal position of consumers, and to ensure that marketing and contractual terms comply with the rules. Matters concerning warranties and collections from consumers are also within the Ombudsman's jurisdiction. The Ombudsman may also assist consumers in court. Additional information: www.kuluttajavirasto.fi Order the web magazine delivered straight to your e-mail account: www.kuluttajavirasto.fi/newslettersubscribe You can also access previous issues of the web magazine through this link. The web magazine is free of charge. Our overview of current issues will keep you up to date on • efforts to strengthen the position of consumers • statements and decisions of the Consumer Agency/Ombudsman • pending legislation • international trends in consumer law 19