• by Wendy Davis  @wendyndavis, October 19, 2011

PepsiCo's online marketing efforts for Doritos are deceptive and also violate teens' privacy, consumer groups say in a new Federal Trade Commission complaint.

It alleges that Pepsi's Frito-Lay division markets Doritos to teens by creating immersive “game” sites like Hotel626.com, an online haunted house, or Asylum626, a mental institution, without making clear the sites' purpose is to advertise chips. The Center for Digital Democracy, Consumer Action, Consumer Watchdog, and The Praxis Project argue that creating those types of engaging sites, which don't identify themselves as ads, is deceptive.

The game at Asylum626.com requires players to escape an insane asylum; doing so involves evading “lobotomy tools, electroshock therapy and crazed patients,” according to the complaint. “The game employs head-tracking technology so that the player must literally move to avoid an attack,” the complaint states.

“As the game reaches its climactic final scene, it abruptly stops. Before the player can access the ending, he/she must buy a bag of Doritos Black Pepper Jack or Smoking Cheddar BBQ (the two flavors 'brought back from the dead') and use the infrared marker imprinted on the back to unlock the ending,” according to the complaint. “Players who do not make the purchase are unable to complete the game.”

The groups argue that this type of immersive marketing is deceptive to teens, who are especially vulnerable to the “emotional arousal” created by the games.

In the complaint, the groups say that statements by Frito-Lay and its ad agency, Goodby, Silverstein & Partners, show that the company intended to “disguise advertising as entertainment because they know teens do not like advertising.” But whether the campaigns are illegal isn't clear, says Georgetown Law professor Rebecca Tushnet. “We're really in unchartered territory here,” says Tushnet, an expert in advertising law. “It is troubling from a conventional perspective that these sites don't announce themselves as ads,” she says. “On the other hand, they do say clearly when you get to a decision point that you have to buy a pack of Doritos to continue.”

The fact that the ads are targeted toward adolescents could factor into decisions about whether they're lawful, since teens are seen as especially susceptible to manipulation. The consumer groups also allege that Frito-Lay violates teens' privacy by seeking their contact information without adequately disclosing that the data will be used for marketing.

“A reasonable teen would likely think the information collected would be used to create a login to save game progress and return to save points at a later time. However, none of this information is necessary to play the game,” the groups claim. The company also allegedly urged teens to upload their photos while burying key facts in its terms of service, which grant Pepsi a “perpetual license” to distribute the pictures. “Frito-Lay’s disclosure about collection and use of personal information was neither sufficiently detailed nor presented in such a manner that reasonable teens would be likely to see and read it,” the groups argue.

Plus, Pepsi's sites gives visitors the opportunity to integrate with social-networking services, but when users do, the company allegedly sends messages to their friends on Twitter and Facebook that appear to come consumers. The consumer advocates say that not only is this practice a privacy violation, but that recipients likely will believe the messages were from their friends.

“After all, teens routinely tweet or write messages on Facebook for their friends to read,” the complaint alleges. “Here, the Facebook messages even appear in a box of text with the player’s picture next to it.” The groups are asking the FTC to investigate Pepsi and order it to change its ad practices. Pepsi hasn't yet responded to the complaint.