The U.S. Tax and Trade Bureau released TTB Circular
2013-1
, on May 13, 2013.  The
circular is a welcome clarification that the TTB considers social media to be
advertising and that the advertising is governed
by already existing FAA Act rules and implementing regulations in the CFR.

Addressed to the “Proprietors of Bonded
Wineries, Bonded Wine Cellars, Taxpaid Wine Bottling Houses, Beverage Distilled
Spirits Plants, Breweries, Importers, Wholesalers and Others Concerned”… the
circular applies to just about everyone. 
Clarifying their role, the circular confirms the TTB’s regular review of
advertisements in various media and the TTB’s view that social media, falls
under the definition of “any other media”, contained in the CFR definitions for
regulating the advertisement of wine, distilled spirits, and malt beverages:

TTB interprets “any
other media” in the regulations to apply to advertising in all types of media,
including types of media that did not exist when the regulations were
originally adopted. 

In conjunction with the FAA Act, the implementing Code of
Federal Regulations (27 CFR Parts 4
subpart G
, 5
subpart H
, and 7
subpart F
) deal with the regulations for advertising wine, distilled
spirits and malt beverages, respectively. 
The mandatory disclosures that apply under the various subparts for
wine, distilled spirits, and malt beverages apply to social media in the
following ways:

Social Network Services (Facebook, LinkedIn,
etc.)

Fan pages or pages
created by industry members are considered advertisements under the FAA Act and
the TTB regulations.  A home page, and
subbed or tabbed pages associated with home page are one advertisement for the purposes
of the Act, so the mandatory statements need only appear once on the fan page
and these statements need to be:

Conspicuous and
legible;

Clearly a part of the
advertisement; and

Readily apparent to
people viewing the ad (that is, they can’t be hidden or buried in an obscure
location on the fan page).

Video Sharing Sites (YouTube, etc.)

Any videos about
alcoholic beverages that are posted to a video sharing site by an industry
member are advertisements if they’re calculated to induce sales in interstate
or foreign commerce.  Mandatory
statements about the brand or company should be placed in the “profile” of the poster
and the regular advertisement requirements for video content apply if there is
no “channel” or profile section to post the mandatory information to.  The TTB’s recommendation is to be safe and
post the mandatory information on both the profile and in the content since
downloadable videos are considered disseminated advertisements under the rules
and regulations.

Blogs

If an industry
member maintains a blog about itself  and
discusses issues related to the company, its products, or the industry in
general, the blog is considered by TTB to be an advertisement and is subject to
TTB’s advertising regulations because it is a written statement by the industry
member that is calculated to induce sales in interstate or foreign commerce.  So the mandatory disclosures apply.

Microblogs (Twitter, Tumblr, etc.)

The TTB considers
the mandatory disclosures somewhat impractical for every post because of the
140 character limit associated with some microblogs.  So, industry members may include the mandatory
statements on their microblog profile page.

Mobile
Applications

The TTB considers
mobile apps related to alcohol beverages to be advertisements because mobile
apps are written or verbal statements, illustrations, or depictions that are
in, or calculated to induce sales in, interstate or foreign commerce.  But they are consumer specialty advertisements, (27
CFR 6.84(b)(2)
) as, “…items that are designed to be carried away by the
consumer, such as trading stamps, nonalcoholic mixers, pouring racks, ash
trays, bottle or can openers, cork screws, shopping bags, matches, printed
recipes, pamphlets, cards, leaflets, blotters, post cards, pencils, shirts,
caps, and visors.”  Accordingly, the only
mandatory statement required to appear in the app is the company name or the
brand name of the product.

Links and Quick Response Codes

These are regulated
on a case by case basis, but the rule of thumb here is that the link or QR Code
can’t be deceptive and the material it connects to will need to comply.
For everyone unfamiliar with the FAA Act. 
The Act’s rules about advertisements are the umbrella for the advertising
regulations linked the above.  In
conjunction with the enacting regulations for wine, distilled spirits, and malt
beverages, the Federal Alcohol Administration Act (27
U.S.C. 205(f)
) has long mandated that interstate advertisements:

Prevent deception of the consumer with respect to the
products advertised and prohibit, irrespective of falsity, statements relating
to:

  • age,
  • manufacturing processes,
  • analyses,
  • guaranties, and
  • scientific or irrelevant matters … likely to mislead the
    consumer;

Provide the consumer with adequate information as to:

  • the identity and quality of the products advertised,
  • the alcoholic content thereof, and
  • the person responsible for the advertisement;

Require an accurate statement:

  • informing the consumer of the percentage of neutral spirits …
    used and of the name of the commodity from which such neutral spirits have been
    distilled, or
  • in case of neutral
    spirits or of gin produced by a process of continuous distillation, the name of
    the commodity from which distilled;

Prohibit statements that are disparaging of a
competitor’s products or are:

  • false,
  • misleading,
  • obscene, or
  • indecent;

Prevent statements inconsistent with any statement on
the labeling of the products advertised.  

As noted above, there’s nothing new in the content required of mandatory
disclosures for industry members, and nothing new in the prohibitions on
content already in place.  But, TTB Circular
2013-1, clarifies that new medias / social medias, are considered
advertisements and that industry members should govern themselves accordingly.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s