海角大神

Does the FTC really protect consumers?

The FTC appears less concerned with protecting consumers from fraud than with protecting and expanding the federal government鈥檚 monopoly over food-and-drug-related speech.

The will order 狈别蝉迟濒茅 to cease making claims about the health benefits of a drink marketed to children. The FTC appears less concerned with protecting consumers from fraud than with protecting and expanding the federal government鈥檚 monopoly over food-and-drug-related speech, as the Commission鈥檚 own press release makes clear:

"Under the proposed settlement, 狈别蝉迟濒茅 HCN has agreed to stop claiming that BOOST Kid Essentials will reduce the risk of colds, flu, and other upper respiratory tract infections unless the claim is approved by the Food and Drug Administration. Although FDA approval of health claims generally is not required for compliance with the FTC Act, in this case, the FTC determined that requiring FDA pre-approval before 狈别蝉迟濒茅 HCN makes claims that certain products prevent or reduce the risk of upper respiratory tract infections will provide clearer guidance. In turn, this will facilitate 狈别蝉迟濒茅 HCN鈥檚 compliance with the proposed settlement order and will make the order easier to enforce."

It鈥檚 a nice sleight-of-hand: The law doesn鈥檛 require FDA pre-approval, but the FTC does. This is important because the FTC wants to restrict all commercial speech to only those statements pre-approved by the government, with no outside check or balance. There鈥檚 been a few roadblocks recently.

For example, last August a federal judge in New Jersey rejected the FTC鈥檚 petition to hold Lane Labs-USA in violation of a prior FTC order related to marketing of the company鈥檚 dietary supplements. Similar to the 狈别蝉迟濒茅 case, the FTC censored Lane Labs鈥檚 speech unless their claims were supported 鈥渃ompetent and reliable scientific evidence.鈥� What the FTC means by this is, 鈥渆vidence supported by FTC-paid experts.鈥� When Lane Labs produced its own expert reports in support of certain advertising claims, the FTC asked the court to hold the company in contempt 鈥� because the FTC-paid experts had a different opinion. The judge declined to issue a contempt finding (the FTC has appealed).

That鈥檚 why the FTC pending order against 狈别蝉迟濒茅 expressly states all claims must be pre-approved by the Food and Drug Administration, rather then simply require 鈥渞eliable鈥� evidence; this way there鈥檚 no chance the company might find a scientist who disagrees with the government鈥檚 official position.

It also bares repeating that despite labeling these cases as 鈥渃onsumer protection,鈥� the FTC need not ever allege, much less prove, any consumer injury. Indeed, the judge in the Lane Labs case noted there wasn鈥檛 even an allegation of specific consumer harm 鈥� the issue was simply the FTC鈥檚 disagreement with the company鈥檚 speech. Nor did the FTC鈥檚 complaint against 狈别蝉迟濒茅 claim any consumer was injured because of misleading claims. The FTC merely substitutes its own judgment for that of consumers.

I feel obliged to emphasize this because of the recent trend of fake-libertarian groups cheerleading the FTC鈥檚 鈥渃onsumer protection鈥� activities, including the and the . Just today, PFF鈥檚 gushed about the benefits of FTC consumer protection, citing the agency鈥檚 warning against a magazine not to sell its subscriber list. At best it鈥檚 a breach of contract case; it certainly doesn鈥檛 prove the need for a massive federal bureaucracy that routinely violates the civil rights of American citizens. More to the point, folks like Szoka are themselves actively deceiving the public about the true nature of the FTC鈥檚 activities.

(Postscript: PFF is hardly pro-consumer given that people who download songs on the Internet should be subject to six-figure civil fines. In the minds of PFF scholars, companies like Google are criminal syndicates, while the FTC is a necessary agent for protecting consumers. And they call themselves 鈥渃yberlibertarians.鈥�)

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