Consumer Groups Target PepsiCo Over Digital Marketing to Teens

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Consumer Advocacy groups led by the Center for Digital Democracy (CDD) have filed an unfair and deceptive digital marketing practices complaint against food marketer PepsiCo with the Federal Trade Commission.

In the complaint, the groups, which comprise CDD, Consumer Action, Consumer Watchdog and the Praxis Project, allege that the company and its Frito-Lay subsidiary are targeting teens through "stealth marketing" campaigns in multimedia content, online data collection and gaming.

CDD has been a leading voice in calling on the FTC to recommend boosting online marketing protections for teens.

The PepsiCo complaint appeared to be making a general point about what the groups see as questionable industrywide practices, and to put a spotlight on a new report from CDD about what it sees as stealth marketing to teens, as well as its long-time call to expand government marketing regs.

"This complaint sheds a spotlight on practices that are increasingly used routinely in the industry," said Jeff Chester, executive director of CDD in a statement, "but which raise many troubling consumer protection and privacy concerns especially when adolescents are the target."

But Chester told B&C/Multi the complaint was about PepsiCo being a "leader" in aggressive digital marketing. "Pepsi is in the forefront of creating powerful digital marketing schemes to target youth," he said.

The groups allege that PepsiCo. is violating FTC rules by:

  1. "Disguising its marketing efforts as entertaining videogames, concerts, and other ‘immersive' experiences, making it more difficult for teens to recognize such content as advertising."
  2. "Claiming to protect teen privacy while collecting a wide range of personal information, without meaningful notice and consent."
  3. "Using viral marketing techniques that violate the FTC's endorsement guidelines."

As a member of the Children's Food and Beverage Advertising Initiative, PepsiCo (which comprises Aquafina beverages, Frito-Lay snack foods, Quaker food products, Tropicana juices and Gatorade) restricts marketing to kids under 12, but there is no similar industry advertising initiative for ads aimed at teens.

PepsiCo had not returned a request for comment at press time.

"The FTC has received the complaint and will review it carefully," said FTC spokeswoman Betsy Lordan.

John Eggerton
John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.