TRUTH in Labeling – Voluntarism Unmasked

July 20, 2011

Last Thursday (July 14th 2011), the FTC ended its comment period on the Interagency Working Group’s (IWG) proposed principles for Food Marketing to Children. Comments flooded in from virtually every segment of the food, beverage, restaurant and advertising communities. They forcefully pierced the façade that these “proposals” are anything other than thinly disguised government ultimatums, despite being labeled “voluntary” by the IWG.

The IWG is made up of representatives from the Federal Trade Commission, the United States Department of Agriculture, the Food and Drug Administration and the Center for Disease Control and Prevention. They have called on industry to cease advertising to anyone under 18 years of age, any foods, beverages or restaurant meals that don’t meet their extraordinarily stringent criteria for sodium, fats, or sugar. Products like wheat bread, most yogurts, peanut butter, and even 2 percent milk would violate the standards. In fact, this proposal wipes out virtually all food, beverage and restaurant products presently advertised on broadcast, cable and in many other media to those under 18. It would adversely affect more than 1,700 programs on broadcasting and cable alone.

And it would all be for nothing. Many commentators to the IWG noted the utter lack of any analysis in the Interagency Working Group’s proposals to demonstrate that if they were followed absolutely to the letter that there would be any material positive impact on obesity in the U.S. for children or the general public.

The costs, however, would be all too real. IHS Global Insight, a noted economic research group whose report was submitted to the IWG, emphasizes that if these proposed guidelines were put into effect in 2011, 74,000 jobs would be lost, resulting in an adverse economic impact in the U.S. of $28.3 billion. The report concludes that these damaging economic impacts would continue to climb steeply from 2011 to 2015, with cumulative lost sales rising to over $152 billion.

But David Vladeck, the Director of the Bureau of Consumer Protection, has already stated in a recent blog, however, that these charges by the business community are simply “overly caffeinated.” According to Vladeck, everyone should relax because these proposals are merely “voluntary” and “provide no basis for law enforcement action by the FTC or any of the other agencies participating in the Group.” Several other consumer activist organizations have chimed in to support this view.

However, a growing drumbeat of critics has placed a bright spotlight on this issue. They have strongly demonstrated that the velvet glove of alleged “voluntarism” cannot hide the federal government’s coercive authority once key components of that government have stated clearly how highly regulated industries should respond to carefully defined nutrition standards. 

Kathleen Sullivan, the Stanley Morrison Professor of Law and former Dean of Stanford Law School, for example, in a submission presented to the IWG wrote:

The food marketing ‘guidelines’ cannot escape full First Amendment analysis merely because they are styled as ‘voluntary.’ A set of ‘guidelines’ issued by a group  of regulatory agencies with enormous regulatory and investigatory power over the food and media industries that are subject to those guidelines is the functional equivalent of government action, and companies may not be required to surrender free speech protections in exchange for the ‘benefit’ that government refrains from regulating them directly. (Kathleen Sullivan, Appendix A of Viacom Comments Submitted to the IWG, p. 2)

Professor Sullivan further notes that “Government action undertaken with the purpose and predictable effect of curbing truthful speech is de facto regulation and triggers the same First Amendment concerns raised by overt regulation” and that the Supreme Court has long held that such efforts are unconstitutional “even where the mode of censorship is informal and even where the acceptance of the speech restrictive conditions is nominally voluntary.“ (Ibid, p. 27). 

Professor Sullivan concludes that the IWG proposals “thus constitute an impermissible effort to substitute state censorship for parental control.” 

Martin Redish, Louis and Harriet Ancel Professor of Law and Public Policy at Northwestern University School of Law, and a nationally regarded Constitutional law expert, has stated that the fact that the IWG proposals “are labeled ‘voluntary’ in no way camouflages their inherently coercive nature. The force of powerful governmental agencies stands behind them, fortified by the explicit threat of mandatory regulations should voluntary compliance measures prove unsuccessful. Government may not achieve through indirection what it is not constitutionally authorized to impose directly” (Redish, pp. 26-27).

Bruce Fein, the Associate Deputy Attorney General and General Counsel to the FCC during the Reagan administration, also has weighed in on the IWG “voluntarism” issue in the Huffington Post in an article entitled “Voluntary by Command.” Fein forcefully maintains that “In substance, the IWG has delivered an ultimatum to the food industry: either reformulate… or cease promotion on TV, radio, websites.” Fein points out that the enormous array of covert and overt powers that the Interagency Working Group wields “make industry compliance with the guidelines no more voluntary than yielding a wallet to a highwayman.”

The Wall Street Journal in an editorial entitled “Not So Grrrreat!” (July 8, 2011) also pointed out that enforcement of clearly defined sweeping nutrition standards by the four powerful agencies of the Interagency Working Group does not have to be solely enforced whether, covertly or overtly, by the IWG. As the Journal notes the “[IWG] doesn’t have to. That job will be cheerfully assumed by consumer activists and their allies in the plaintiffs’ bar.”

Furthermore, as ANA’s own filing emphasizes the IWG can hope to carry out its censorship of advertising indirectly through pressuring broadcasters to refuse to accept ads that fail to meet the radically restrictive IWG nutrition standards. Under the Federal Communications Act, broadcast licenses are based on whether licensees are operating in the “public interest.” Station owners clearly would have to fear attacks on their licenses by the FCC and activist groups if they failed to enforce bans on foods, beverages and restaurant offerings that do not meet the IWG food marketing standards.

Finally, and most tellingly, the lack of voluntarism of the IWG proposals is demonstrated by the overwhelming number of organizations representing the food, beverage, restaurant, media and advertising groups all attesting to the fact that they believe that these highly detailed, all encompassing, overly restrictive proposals will be treated as de facto government mandates rather than mere governmental recommendations by their members. 

To attempt to dismiss these concerns as merely “caffeinated” political hyperventilation by the business community, completely belittles and ignores the enormous economic stakes involved. In light of the billions of dollars of potential adverse impacts and lack of evidence that the IWG proposals will provide material positive benefits to society, these counterproductive and insufficiently considered proposals should be withdrawn.

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