Judge finds studios shouldn't be penalized for theaters' failures

WASHINGTON — In a major Thanksgiving boost for Hollywood studios, the Federal Trade Commission announced Tuesday that there are no grounds to bring deceptive or unfair advertising charges for the way violent, R-rated movies are marketed.

The finding of FTC chairman Robert Pitofsky came in a seven-page letter to Sen. John McCain (R-Ariz.), one of several prominent lawmakers who voiced outrage over the way studios have sought out young audiences for films packed with mayhem and murder.

In the final analysis, Pitofsky told McCain there is no direct correlation between violence on the screen and violence in the streets, or any laws prohibiting the marketing of violent movie to kids. Therefore, the government can’t go after Hollywood in the same way in went after the tobacco industry for marketing cigarettes to minors.

Further, the FTC would likely trod on First Amendment ground if it started picking apart which movies were unsuitable for kids, and which weren’t. Kids under 17 are allowed to see R-rated movies, after all, as long as accompanied by an adult.

Also, Pitofsky said studios shouldn’t be penalized for the failure of theaters to enforce attendance rules.

“After a careful review of the entertainment industry’s marketing practices and an analysis of the law, the commission believes that there are a number of significant legal limitations, including substantial and unsettled constitutional questions, to effective law enforcement actions under the FTC Act. Instead, the most prompt and viable option might be for continued encouragement by Congress of further, needed reforms,” Pitofsky said.

Entertainment execs welcomed the news, after weeks of hammering by elected officials over a Sept. 11 FTC report concluding that the movie, music and vidgame industries have gone around their own rating systems and targeted marketed kids.

“Chairman Pitofsky’s letter plainly states that any attempt to charge the movie industry with deceptive advertising of R-rated films would be fatally infected with serious constitutional problems,” Motion Picture Assn. of America (MPAA) prexy Jack Valenti said.

“We are not surprised, because we always believed that both the content and the marketing of movies were protected by the First Amendment, but that doesn’t diminish our commitment to marketing our films responsibly,” Warner Bros. prexy and chief operating officer Alan Horn said.

McCain, chairman of the powerful Senate Commerce Committee, could not be reached for comment regarding Pitofsky’s letter. After taking testimony from entertainment execs at two contentious hearings in September, McCain had asked the FTC to study whether it could bring deceptive or unfair advertising cases against Hollywood.

Democratic presidential contender Al Gore and his running mate, Sen. Joseph Lieberman (D-Conn.), also raised the spectre of FTC deceptive advertising action.

Not over yet

McCain and other politicians have no intention of dropping their overall cause any time soon. Even as Pitofsky’s letter was being released Tuesday, FTC officials met with McCain’s committee staff to discuss ongoing monitoring of Hollywood marketing practices by the FTC.

One official said the talks are continuing, but that the exact details of the additional FTC involvement haven’t been worked out.

Valenti continues to state that a 12-point initiative drawn up by the MPAA and agreed to by the major studios sufficiently addresses the marketing problems pointed out in the FTC report.

Valenti and other entertainment lobbyists are well aware that there is continuing pressure to go even further. One bargaining chip for Valenti and the studios could include a revision to the R-rating category.

In his letter to McCain, Pitofsky agreed with Valenti’s position that the public is best served when there is self-regulation by the entertainment industry. Pitofsky stressed that any crackdown by the FTC could hamper incentive for such monitoring.

At the same time, Pitofsky joined those who say the industry needs to make more changes and advised McCain that action is certainly appropriate if progress isn’t made.

“If additional self-regulatory efforts are not forthcoming, then we believe that the Congress should consider whether there are narrowly tailored legislative actions that could encourage more robust self-regulatory initiatives. We are ready to assist Congress in this effort in any way we can,” Pitofsky said.

One proposal on the table is legislation that would amend antitrust laws to allow the movie, music and vidgame industries to come together and develop a universal code of conduct.

Valenti is against such a code, saying it’s an unworkable proposition. Breaking ranks with its brethren, the Walt Disney Co. said it would indeed favor such a code.

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