Here is an article from the Baltimore Sun that talks about how the Center for Science in the Public Interest is planning to file suit against McDonald's for violating consumer protection laws by including toys in its Happy Meals. Not surprisingly, I would not be in favor of such a lawsuit.
The basic economic principle is one of consumer sovereignty. Consumers get to choose. In this case, the parents have to make a choice on their children's behalf. One argument is that parents should not always have to be "the bad guy" and tell their kids no.
However, in addition to simply having to be a responsible parent and guide their children's choices, parents do have other options. Let's think of the many different approaches that parents can take in addition to just having to tell the kids "no" when they ask for a McDonald's Happy Meal and the parents are worried about how unhealthy it may be. Although, when all is said and done, this is ultimately what parents who don't want their kids to have happy meals can and should do.
First, parents can limit the children's time watching television. What else can kids do? Play outside. Read a book. Play a boardgame. Practice an instrument. Use their imagination. All of these options will take kids away from the advertisements and lead the children to be less tempted even to ask for a happy meal in the first place.
Second, parents can just avoid taking their kids to McDonald's in general. If the kids have no expectation of ever going to McDonald's they will probably stop asking.
Third, parents can fix their kids good foods at home. If kids are given a choice between having healthy, great tasting home cooked meals (and maybe even helping in the process) or having McDonald's, I bet many of the kids would choose the home cooked meal and stop asking for McDonald's.
Ultimately, the responsibility here is with the parent--to say no when a child asks for something that the parent thinks is not good and to teach the children not to ask for it in the first place. For those parents who wish to provide a McDonald's meal for their children, the Happy Meal toy at least gives them something to help encourage the child to eat the entire meal and something to occupy the child when the child finishes their dinner first.
So, advertising to young children who really aren't able to make their own choices may be an annoyance to parents but does not seem like it should be something to sue over.
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