The Obama FTC departed from its predecessors to the detriment of consumers

• Published in: Antitrust Vol. 31; no. 3; p. 66
• Main Authors: Beales, J. Howard, III, Muris, Timothy J
• Format: Magazine Article Trade Publication Article
• Language: English
• Published: Chicago American Bar Association 01.07.2017
• Subjects: Advertising; Antitrust; Breach of contract; Cancer; Consumer protection; Consumers; Consumption; Dietary fiber; Economic policy; Efficient markets; Fraud; Laws, regulations and rules; Methods; Obama, Barack; President of the United States; Privacy; Small claims courts; United States
• ISSN: 0162-7996; 2162-996X

When Congress confirmed its rulemaking authority in 1975,1 the Commission launched a binge of rulemaking, proposing nearly one rule a month, often seeking to restructure entire industries, causing observers to call the agency the second most powerful legislative body in the United States.2 As one of us has detailed elsewhere, the legal basis for the rules and the evidentiary foundations necessary to establish that basis were poorly considered, making the rulemakings long, elaborate, and costly exercises.3 Most were abandoned, producing nothing of value for consumers; those that survived were pared back substantially.4 As exemplified in the 1989 ABA Commission Report on the FTC,5 in the 1980s and 1990s a bipartisan consensus emerged regarding a more productive role for the FTC. According to this consensus, and consistent with the agency's antitrust mission, competitive markets are the consumer's best friend. When Kellogg started advertising the relationship in 1984, the weighted average fiber content of cereals began a statistically significant upward trend. [...]the emergence of advertising narrowed differences in fiber consumption between different demographic groups, as advertising made important information available to a much broader population.11 Similar results occurred in the market for fats and oils, as health claims discussing the relationship between fats and heart disease increased.12 Despite their power to enhance consumer welfare, markets alone are not enough to protect consumers. Structural problems, such as inadequate consumer redress and excessive attorney's fees, limit the ability of class actions to protect consumer welfare adequately.13 Further, small claims courts often do not reduce...