FTC Looks at Kids eTailers

Recent experiences of online toy sellers may serve as a warning to anyone marketing mature content on kid targeted Web sites.

Virtual toy store eToys reports in its quarterly report that the Federal Trade Commission sent a “request letter” asking for more information on how it markets video games and software products that are rated “mature” or higher by the Entertainment Software Rating Board. The report goes on to say eToys is in the process of complying with the FTC’s unspecified requests.

FTC spokeswoman Claudia Bourne Farrell would say only that most FTC investigations are kept confidential, and that a company’s children’s marketing practices would be investigated if they were suspected of being “unfair or deceptive.” She declined to elaborate.

But the FTC is looking not only at eToys’ practices, says the online retailer. “We’re not the only ones,” says company spokesman Jonathan Cutler. He characterizes the FTC request letter as part of an industry-wide look at how mature content is marketed to kids on the Web.

EToys Responds

The company markets video games and software products with mature ratings, which are easily accessible to all Web site visitors. Cutler is quick to point out, however, that eToys follows strict, self-imposed guidelines for marketing those products. The company posts the ESRB’s ratings for all its software and video game products, a practice that is not required by law. “You can’t buy a video game [from us] without seeing the rating on our site,” Cutler says.

In addition to posting the ESRB’s ratings, eToys has developed its own “secondary rating system” included on the product details page. That system includes a description of the content and reasons for the ratings.

And, “you have to have a credit card to purchase at eToys. The credit card has to be approved,” and most kids don’t have credit cards, Cutler reasons. So, in most cases, a responsible adult would have to make a purchase and approve any “mature” products before the game was added to the shopping cart. But most cases aren’t all cases, which leads many consumer advocates, not to mention many kids industry insiders, to question retailers who sell products with mature ratings on kid sites.

“You have to police that if you’re a family business,” says Bill Miller, former FAO Schwarz exec and a toy industry expert.

Miller sees the issue as part of much larger questions kids marketers will have to tackle as online retailing becomes increasingly prevalent. He calls for kids companies to do what it takes to keep kids safe online, whether that means working with a technology provider that can offer screening so kids can’t reach mature or violent content through your site, or scrupulously protecting any customer information garnered from e-commerce sites. FAO Schwarz partnered with a family-oriented entertainment company to “recommend with credibility” which video and software products were appropriate for its young customers.

The eTail Quandary

Those issues may prove even more problematic for stores with a more mainstream focus than FAO, however. Although specialty retailers can commit to banning toy guns from their shelves both online and offline, lower-end retailers do a booming business in “weapons” and other toys many consider violent or adult products. The Web environment, where “shelf space” is unrestricted, is an even trickier area. And it’s a lot harder to put a “mature” product at older kids’ eye level online. When Pokemon games, Disney titles and “Zombie Revenge” can all appear as results to the same search, younger kids can get an eyeful online. Etoys, as Cutler says, is not the only one. Toys R Us and KB Toys, for example, also feature mature video games in their e-stores.

Cutler maintains the products can be marketed responsibly, however. “We can do it in a communicative and open manner. [The copy in our ratings system] is not copy we pulled off of [a product’s] packaging. That’s copy we produced in-house after playing. Sometimes if the manufacturer says a product is for ages 5 and up, we may find it’s not so appropriate for a 5-year-old, but more for an 8- to 12-year-old. We can address video games in a fashion that’s informative to parents.”

The industry and the FTC aren’t worried about parents, though, and whatever the outcome of the FTC’s study of mature content marketing, e-retailers have a long way to go before they solve all the problems of selling to kids online. The best strategy for now is to develop and implement strong procedures to protect kids online, and to be able to provide them and prove you’ve enforced them if questions arise. (FTC: Claudia Bourne Farrell, 202/326-2180; eToys: Jonathan Cutler, 310/664-8550; Bill Miller, 212/769-9400)

COPYRIGHT 2000 Phillips Publishing International, Inc.

COPYRIGHT 2001 Gale Group

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