Sound Of Silence At The FtcBy
The Food & Drug Administration's stringent food-labeling rules take effect with great fanfare on May 8. But over at the Federal Trade Commission, which is still agonizing over companion advertising standards, there is only the sound of silence. That's no surprise to regulatory experts. Although President Clinton has brought a more aggressive enforcement philosophy to town, the FTC seems like a Republican throwback. "They're slow and pro big business," gripes Representative John J. Moakley (D-Mass.).
Compared with the FDA and the Justice Dept.'s antitrust division, the FTC is passive. The problem is that its five members are hopelessly deadlocked. Two are free-market conservatives, two are pro-regulatory moderates, and the swing vote--independent Mary L. Azcuenaga--can't make up her mind. The result: stalemate on everything from a Microsoft Corp. antitrust investigation to a proposed ban on RJR Nabisco Inc.'s Joe Camel cigarette ads to the current food flap. On that issue, the activists want to prohibit exaggerated health claims, while the conservatives would permit such claims so long as there is at least modest scientific evidence to support them.
Clinton will have a chance to break the gridlock in September, when the term of Commissioner Deborah K. Owen, the most conservative member, expires. A Clinton nominee could team up with the two enforcement activists, Republican Chair Janet D. Steiger and Democrat Dennis A. Yao, both named by Bush. Leading candidates--all tough enforcers--include Tennessee Attorney General Charles Burson, ex-New York Attorney General Robert Abrams, and former FTC member Robert Pitofsky. Until the job is filled, the FTC is forfeiting a chance to reclaim its past clout.
Steiger says the FTC hasn't gone soft, citing April's record $2.4 million settlement with Pittsburgh-based General Nutrition Cos. for deceptive ads about weight-loss products. But consumer groups see GNC as a rare exception. Still, come next fall, business may discover that a muzzled watchdog will again be nipping at its heels.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.