Kids Ad Watchdog Cases Hint at Future of NAD Enforcement

The article analyzes the National Advertising Division's (NAD) recent revision of its procedures to broaden the scope of its review jurisdiction to cover advertising that portrays or encourages "negative harmful social stereotyping, prejudice or discrimination." Examining how NAD may exercise its expanded authority, the article looks to the United Kingdom's Advertising Standards Authority and NAD's sister organization, the Children's Advertising Review Unit (CARU), for indications of how NAD's jurisdictional changes could unfold.

Two potentially illustrative decisions were recently issued by CARU, which already has expansive authority to address "negative social stereotyping, prejudice or discrimination" in children's advertising. The article offers an overview of both cases, which concerned gender stereotypes depicted in connection with children's products – gender-restrictive slogans on girls' and boys' clothing in one case, and advertising and product packaging of dolls perpetuating female stereotypes in the other case. CARU concluded in both matters that each company's messaging failed to comply with its advertising guidelines on negative social stereotypes, and further recommended modifications to the companies' advertising.

Noting that the CARU decisions have prompted industry concerns that it is starting to apply an increasingly aggressive review of gendered products, not just advertising, the article explains that there is now similar apprehension regarding NAD's jurisdictional reach. Specifically, "there is some concern that NAD will begin to exercise broad and expansive discretion and apply a more socially conscious lens to its review of diversity issues that are of increasing importance to national political discourse," according to the article. It notes, however, that the impact of NAD's expanded jurisdiction remains to be seen and further observes that initial concerns might not be wholly warranted.

"[A]t least initially, only the more egregious and serious cases may end up before NAD," according to the article. Most reputable national advertisers have taken measures to modify their ads to reflect changing public sentiment, and television networks and most other publishers have discretionary authority to decline ads that fail to satisfy standards of taste. Further, the article notes that "since NAD's ultimate enforcement authority rests on Federal Trade Commission referrals as a backstop against advertisers refusing to participate or failing to comply with its recommendations, the FTC itself is constrained by the First Amendment."

"Kids Ad Watchdog Cases Hint at Future of NAD Enforcement," Law360, November 14, 2022

*Subscription may be required for article access.