it is likely to mislead consumers, acting reasonably under the circumstances, in a material respect…. In implementing this standard, the FTC examines the overall net impression of an advertisement and engages in a 3-part inquiry: (1) What claims are conveyed in an advertisement? (2) Are the claims false or misleading? (3) Are the claims material to prospective consumers” (Kraft, Inc. v. FTC, 1992)? The FTC regulates unfair and deceptive advertisements for food products (see, e.g., Nestlé Food Company, 1992; The Isaly Klondike Company, 1993).4 Unlike courts, which are empowered only to resolve particular controversies, the FTC can promulgate general rules defining unfair, misleading, or false advertising (16 C.F.R. § 410.1, 2005; 16 C.F.R. § 239.1–5, 2005). In determining the acceptability of advertising to children, the law—in both its judicial and administrative manifestations—recognizes the special status and cognitive limitations of children. Advertisements that are acceptable if addressed to an adult, might be deceptive, unfair, or misleading when directed to a child (Bunch v. Hoffinger Industries, Inc., 2004; Swix v. Daisy Manufacturing Company, 2004).5 When an act or a practice is targeted to a specific audience such as children, the FTC will determine whether it is unfair or deceptive by reference to its effect on a reasonable member of that group (Federal Trade Commission Unfairness Policy Statement, appended to International Harvester Company, 104 F.T.C. 949, 1984). The FTC thus evaluates the legality of advertisements or sales practices directed to children in terms of how they are perceived by an ordinary child. The FTC has required those who sought to use television commercials containing characters such as Santa Clause or the Easter Bunny to promote 1-900 telephone numbers allowing children to speak with the fictional characters and to win prizes, to disclose a range of relevant information “in a manner understandable to children” (see Audio Communications, Inc., 114 F.T.C. 414, 1991; Phone Programs, Inc., 115 F.T.C. 977, 1992). Congress followed up on the FTC’s efforts in this area by enacting the Telephone Disclosure and Dispute Resolution Act (P.L. 102–556, 106, 1992; codified at 15 U.S.C. § 5701 et seq., 2004), which, among other requirements, mandated that the FTC promulgate rules which prohibited marketers from directing advertisements for pay-per-call services at children under the age of 12 years, unless the service was for a bona fide educational service (15 U.S.C. § 5711(a)(1)(d), 2002).
In 1978 the FTC sought commentary on a proposed rule that would ban television advertisements addressed to children too young to understand the selling purpose of advertising and also ban television advertisements for food products posing the most serious dental health risks which are directed to, or seen by, audiences with a significant proportion of older children (Ratner et al., 1978). The proposed rulemaking, known as “kidvid,” proved intensely controversial (Beales, 2004), evoking criticism from