DMA Issues Comments to Consumer Product Safety Commission on Labeling Requirements for Toys in Catalogs

October 23, 2008 — DMA has sent comments to the Consumer Product Safety Commission regarding the Commission’s proposed labeling requirements for toy and game advertisements in catalogs. DMA also intends to file specific comments related to Internet advertising by the deadline of November 20, 2008.

Below is the full text of the letter.

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October 20, 2008

Via electronic filing: cpsc-os@cpsc.gov

Mr. Todd A. Stevenson, Secretary

Office of the Secretary

Consumer Product Safety Commission, Room 502

4330 East-West Highway

Bethesda, MD 20814

Re: ADVERTISING REQUIREMENTS NPR

Dear Secretary Stevenson:

The Direct Marketing Association (“DMA”) appreciates the opportunity to provide comments on the Consumer Product Safety Commission’s (“Commission”) proposed labeling requirements for toy and game advertisements. We also intend to file specific comments related to Internet advertising by the deadline of November 20, 2008.

The DMA (www.the-dma.org) is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates industry standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents more than 3,600 companies from dozens of vertical industries in the U.S. and 50 other nations, including a majority of the Fortune 100 companies, as well as nonprofit organizations. Included are cataloguers, financial services, book and magazine publishers, retail stores, industrial manufacturers, Internet-based businesses, and a host of other segments, as well as the service industries that support them.

We understand that balancing product safety concerns with the physical limitations imposed by advertising space makes this rulemaking effort a difficult challenge. As cataloguers, marketers, and retailers, both on- and offline, our members appreciate the benefit in communicating every relevant aspect of a product, including a product’s safety message, price, features, uses, and availability. However, the amount of information and how it is displayed is often determined by the physical aspects of the advertisement. From our experience, effective messaging must be clear and concise. DMA is concerned that advertisements could become cluttered and ineffective because of rules that would require multiple disclosures in a single advertisement. As described below, DMA recommends the use of defined alert symbols to address the size restraints of advertisements. The DMA also wants to ensure there is a realistic compliance timetable that accounts for increased compliance costs and the impact on small businesses, which make up a significant portion of the industry. Set forth below we provide the following comments:

• The rules should permit the use of abbreviated and symbol-based warnings in advertisements in catalogues and other printed materials.

• Manufacturers and retailers should be provided flexibility in the manner warnings are communicated to consumers.

• The Commission should provide an 18-month grace period for cataloguers to comply with the new regulations.

• Catalogues and other printed materials that are distributed among businesses should be exempt from the advertising labeling requirements.

The rules should permit the use of abbreviated and symbol-based warnings in advertisements in catalogues and other printed materials.

The Commission has proposed permitting the use of abbreviated versions of the required cautionary statements provided the shorthand warning is defined at the bottom or top of each catalogue page or extends across two facing catalogue pages if both pages contain products available for purchase. DMA supports using abbreviated warnings in advertisements. The physical limitations of the advertisement often make it necessary to use shorthand cautionary statements. The use of defined abbreviated warnings in this manner, balances the need for providing appropriate product warnings with the need to communicate other relevant product information.

DMA recommends that the Commission require catalogues to provide a definition key or legend in a clear and conspicuous manner in a single designated location, such as the second page or back of each catalogue or other printed material. Designing a catalogue is a time intensive process. Each addition of a piece of information has a ripple effect throughout the catalogue. Adding a key or legend at the top or bottom of each page bumps content from one page to the next increasing production hours, the number of catalogue pages, and overall production costs. Requiring a single key or legend achieves the goal of providing meaningful notice, but also reduces the cost of compliance. In addition, the Commission should not impose minimum type-size or other requirements on the legend. Businesses need flexibility in providing warnings.

We suggest that the Commission, in consultation with industry, adopt in addition to abbreviated warnings, other specific safety symbols that are recognized to represent certain product safety concerns. We have attached representative symbols for your consideration, which are currently used in Europe for labeling purposes. A symbol requires little space and in many ways can convey a more meaningful and conspicuous message than words. In our experience as marketers, symbols can be more conspicuous and effective than lengthy or detailed messages. In addition, images are often universally understood (e.g. the skull and crossbones representing toxic) regardless of a consumer’s native language. Permitting the use of symbols to represent cautionary statements would achieve the purpose of the proposed rules, providing meaningful and conspicuous product safety messages to consumers, while addressing the space limitations associated with advertisements. This would be particularly useful in circumstances where multiple disclosures for a product would be required by law. In addition, similar to abbreviated warnings, a symbol could also be accompanied by written definitions in a clear and conspicuous key or legend in a designated area of the catalogue.

Manufacturers and retailers should be provided flexibility in the manner warnings are communicated to consumers.

The Commission’s proposed rules provide specific guidance with respect to the content, size, and other labeling requirements. Specifically, the Commission has proposed to require that cautionary statements be provided in a type-size reasonably related to other text in the advertisement provided the text is no smaller than a certain minimum type-size. The Commission should not impose a type-size requirement and resist suggestions to impose requirements that are more explicit. Manufacturers, suppliers, and retailers require some flexibility in the manner in which warnings are communicated to consumers. Provided a warning statement includes the statutorily required disclosure, businesses should retain the ability to display cautionary statements in a manner consistent with the nature of the advertisement. We believe the appropriate type-size and advertisement location should be determined by the size of the advertisement. This approach would address the need for providing clear and conspicuous product warnings without displacing other relevant information. We urge the Commission to maintain this balance.

The Commission should provide an 18-month grace period for cataloguers to comply with the new regulations.

The statutory deadline for compliance with the advertising labeling requirements for catalogues and other printed materials is February 10, 2009. The Commission has proposed providing a grace period of 180 days for compliance. DMA agrees that a grace period is necessary for compliance with respect to catalogues and other printed materials, but we recommend an 18 month grace period. There is a great cost and lengthy production cycle associated with creating and publishing catalogues. Production cycles generally start a full year before delivery, have a one-year shelf life, and can cost millions to produce. Cataloguers and retailers have invested large amounts of resources and have already produced printed materials far beyond the February 10th and August 9th deadline.

In addition, while we will comment in more detail separately on the proposed Internet regulations, we recommend that the Commission, in its order related to catalogues and other printed materials, also extend the Internet compliance timeframe. A compliance deadline of December 12, 2008 is not operationally practical, particularly for small businesses. Each web site operated by a retailer is an online marketplace that brings together multiple vendors; in some cases three thousand to fifteen thousand manufacturers and suppliers. The industry-wide effort required to reach out to each vendor to gather the required information and then to translate that information to web pages will take more time than the less then two months presently provided. We urge the Commission to provide a one year grace period for compliance with the Internet related regulations.

Catalogues and other printed materials that are distributed among businesses should be exempt from the advertising labeling requirements.

The Commission requested comment on the applicability of the advertising labeling requirements to business-to-business catalogues. DMA supports exempting from the advertising labeling requirements, catalogues and other printed materials that are distributed solely among businesses. Because consumers do not have access to business-to-business catalogues or use such catalogues to make purchases, applying the advertising labeling requirements to such catalogues would, as the Commission indicated, “prevent very few injuries, if any.” In addition, federal law already requires, importers, distributors, and private labelers to provide cautionary statements to retailers. Prescribing how such information is communicated between businesses would increase costs and reduce a business’s ability to convey warnings efficiently. Catalogues that are distributed to the ultimate consumer, however, should provide appropriate warnings.

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Thank you for the opportunity to submit these comments. We look forward to continuing to work closely with the Commission on these important issues. Please do not hesitate to contact me with any questions at 202/861-2423.

Sincerely,

Jerry Cerasale

Senior Vice President, Government Affairs

1615 L Street, NW Suite 1100

Washington, DC 20036

Cc: Stuart Ingis, Venable LLP

Michael Signorelli, Venable LLP