FTC Says It Cannot Shield Children From Hollywood

The Federal Trade Commission announced Tuesday that it has no legal authority to prosecute entertainment companies that market adult-rated products to children, a setback for efforts to curb the industry through regulatory pressure.

Citing “significant legal limitations” and “substantial and unsettled constitutional questions,” FTC Chairman Robert Pitofsky concluded that the agency would face considerable difficulties bringing cases against Hollywood under existing federal trade laws.

Pitofsky urged Congress to encourage voluntary regulation and recommended “narrowly tailored legislative actions” should the industry fail to vigorously comply.

“If you are running an R-rated advertisement on a show kids are watching--what is deceptive about that?” explained FTC spokesman Eric London. “Kids can go to R-rated movies with their parents. Proving deception and unfairness would be a stretch.”

The seven-page opinion was sent to Congress and came more than two months after an FTC report revealed the industry directly marketed violent entertainment to children, in one instance using youngsters as young as 10 in focus groups for films its own rating system deemed inappropriate for anyone younger than 17.

The report sparked outrage on Capitol Hill, and lawmakers asked the commission to review whether laws against unfair and deceptive advertising could apply to entertainment violence. The hope was that the strategy that worked against the tobacco and alcohol industries would give the government leverage with movies, music and video games as well.

But Pitofsky concluded the situations were not comparable. “Marketing alcohol and tobacco to young people not only violates [industry] code provisions but also various state laws,” he wrote. “There are no corresponding laws restricting the marketing or sale of violent entertainment products to children.”

The finding effectively shut down an avenue of the law some members of Congress had been eager to pursue: prosecuting the marketing of violent products without challenging the entertainment content, which is protected by the 1st Amendment.

Pitofsky’s opinion, released by fax without fanfare late Tuesday, caught Hollywood by surprise. But the news was clearly welcomed.

“We always believed that both the content and the marketing of movies were protected by the 1st Amendment,” said Warner Bros. President Alan Horn, one of eight executives called in September to testify before the Senate Commerce Committee on internal marketing strategies in the wake of the FTC report. Still, Horn added: “That doesn’t diminish our commitment to marketing our films responsibly.”

Also lauding Pitofsky’s finding was Jack Valenti, president of the Motion Picture Assn. of America, who said it “plainly states that any attempt to charge the movie industry for deceptive advertising of R-rated films would be fatally infected with serious constitutional problems.”

And Douglas Lowenstein, president of the Interactive Digital Software Assn., said he was pleased Pitofsky “ended up with the view that self-regulation is ultimately going to be more effective than government regulation and legal attacks in addressing the concerns about the marketing of violent entertainment to kids.”

But the struggle between the industry’s freedoms and Congress’ will to clean up “cultural pollution” is hardly over. As one entertainment industry leader in Washington hastened to add: “We know better than to think Congress and others will consider this a final bell for any discussion of content.”

Lawmakers have already moved Hollywood, with publicized hearings and public scoldings, to expand its rating policies to give parents more information about content. Whether the reforms suit Washington will determine whether Congress pursues new laws. That process can be grueling for Hollywood even when it fails, since it usually spotlights the industry’s most controversial work.

Members of Congress vowed to keep the pressure on.

Sen. John McCain (R-Ariz.), a harsh critic of Hollywood who convened the hearing that called eight movie studio executives to testify, suggested the steps Hollywood has taken thus far will not suffice.

“I will continue to work with the entertainment industry to substantially enhance and enforce voluntary codes of conduct,” McCain said. “This requires an expressed commitment on the part of all [entertainment companies] not to target children with advertising for restricted products, a commitment to provide more information to parents about violent content . . . and aggressive enforcement . . . to ensure children are not able to purchase such products without parental consent.”

A spokesman for Sen. Joseph I. Lieberman (D-Conn.), Al Gore’s vice presidential running mate and a vocal critic of Hollywood, promised to hold the entertainment industry to a six-month deadline that the Democratic ticket set in September to restrict marketing to children. “If the industry doesn’t take care of this problem in the six-month time frame, we will develop legislation to give the FTC the necessary authority,” said spokesman Dan Gerstein. “We issued a challenge, and we’re going to stick with it.”

In the short run, Pitofsky’s opinion appears to take the heat off Hollywood for a while; in the long run, it could hold mixed results.

Any new legislation would have to pass an almost evenly divided Congress, a difficult task by any measure. But if frustrated lawmakers fail to move legislation on such matters as tax policy and Social Security, members may be compelled to resume the culture war--an always popular topic that draws broad media coverage and counters the image of a do-nothing Congress.

“If they can’t do anything significant on the giant issues,” warned a Washington entertainment lobbyist, “what you’re left with is a desire to find something they can agree on, like culture battles.”

Pitofsky’s opinion illustrates how constitutionally well-protected the industry is, eliciting from the commission that chastised it two months ago some of the very arguments entertainment leaders have been making for years. When, for example, is an R-rated movie inappropriate for children, and for which children?

“People might have different views about the propriety of unaccompanied children under 17 seeing a film like “Saving Private Ryan,” versus one like “I Know What You Did Last Summer,” the opinion said.

Bringing a case now might even foil the expressed goal of keeping violent entertainment out of children’s hands, Pitofsky said. If the government accused the industry of violating its own voluntary ratings codes, the industry might be compelled to end the violation by abandoning the code.

Clearly, though, the FTC chairman put Hollywood on notice, offering Congress assistance if further legislation is deemed necessary.

“This is an issue that will continue to garner a lot of attention on the Hill,” FTC spokesman London said. “And people like Sen. McCain are going to want to see progress.”

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Times staff writers James Bates, Janet Hook and Lorenza Munoz contributed to this story.