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Consumer groups file complaint over ‘stealth’ PepsiCo ads

By Caroline Scott-Thomas , 25-Oct-2011

Consumer groups have filed a complaint with the Federal Trade Commission (FTC) against PepsiCo and its subsidiary Frito-Lay, claiming that it uses deceptive and unfair marketing techniques to attract teenage customers.

In particular, the complaint focuses on online marketing campaigns, including the company’s Asylum 626 and Hotel 626 online video games, and a Rihanna music video tie-in, claiming that they target teenagers in a deceptive manner through a range of stealth marketing techniques, and collect data through social media, mobile phones and various “immersive” multimedia platforms.

The FTC complaint, filed by the Center for Digital Democracy (CDD), Consumer Action, Consumer Watchdog and The Praxis Project, claims that the marketing techniques are deceptive, because they make it “difficult for teens to recognize such content as advertising”; collect personal information, including mobile telephone numbers, “without meaningful notice and consent”; and use viral marketing techniques, which the groups claim violate FTC endorsement guidelines.

In response, the company said that its marketing campaigns are innovative but entirely legal.

Company spokesperson for Frito-Lay Aurora Gonzalez said in an emailed statement: “We are aware of the filing to the FTC and believe it contains numerous inaccuracies and mischaracterizations. PepsiCo and its Frito-Lay division are committed to responsible and ethical marketing practices. Our marketing programs, which are often innovative, comply with applicable law and regulations.”

Counsel for CDD and director of Georgetown Law’s Institute for Public Representation, which drafted the complaint, Angela Campbell said: “PepsiCo’s covert ad campaigns take advantage of teens vulnerabilities and encourage them to buy and consume a product that is harmful to their health.”

The online games do include an age gate, requiring users to indicate that they are at least 18 years old. Appendices to the complaint include the company’s description of the success of its online campaigns detailing their appeal for teenagers. They refer to “scaring the crap out of teenagers” with its video games, and developing an entertainment company, Snack Strong Productions, in order to “start talking to the people that actually ate the product, teenagers.”

The complaint was also filed to coincide with the release of a new report commissioned by the National Policy and Legal Analysis Network to Prevent Childhood Obesity (NPLAN), examining digital food marketing to children and teenagers.

Legal Research Director of NPLAN Samantha Graff said: "Time and again, we have seen food and beverage companies claim they want to help protect children's health and that their voluntary pledges are enough. But this report reveals that they're promoting junk food using tactics that take unfair advantage of our kids and, in some cases, violate the law. Industry self-regulation won't work if food and beverage companies are making up their own rules without regard for the legal, ethical, or health implications."

The complaint comes on the heels of the Institute of Medicine easing back on its proposed voluntary guidelines for marketing foods and beverages to children, including restricting the guidelines to children under 12, rather than those aged 17 and under, as it initially suggested.

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