October 5, 2012
The U.S. Consumer Product Safety Commission is considering a policy change to the way it publicly confirms that it has opened a defect investigation, leading the manufacturing community to issue a DEFCON 1 alert.
Currently, under the Section 6b of the Consumer Product Safety Act, manufacturers have a lot of control over what negative information the CPSC can disclose about them. The CPSC cannot disclose information that falls within the envelope of trade secrets or “misleading” and “inaccurate” information. The CPSC can disclose the existence of an investigation, under procedures designed to ensure the accuracy of whatever information is made public. The CPSC gives manufacturers 10 days to review any statements about their products, and typically the two entities release agreed-upon language.
“What is very important to take into account is that we adhere to 6b,” says CPSC spokesman Scott Wolfson. “It is not a wall to disclosure. It’s a hurdle. As the Chairman (Inez Tennenbaum) has stated: “We do follow that law and we follow it in very prescribed ways.”
In the past, the CPSC waited until the press took an interest in an alleged defect to initiate the 10-day review period. The proposed policy change, explained to manufacturers and their trade associations at a CPSC Safety Academy held in Bethesda, Maryland late last month, was an alternative to “approaching a company in a rushed situation, in which the media is asking for immediate confirmation, which at times we cannot give because the company is given 10 days to respond. We are considering a policy approach that starts the clock at an earlier stage. The same rights are given, but we prepare ahead of time for potential requests.”
The National Association of Manufacturers, lost no time in firing off a letter with apocalyptic overtones:
“We are deeply concerned about this new initiative. Any announcement by the CPSC that a product is “under investigation” will have a substantial and negative impact on the reputation of the product, its manufacturer and those in its distribution chain. Such a statement by the agency charged with protecting the public will lead to unfounded publicity, unplanned inquiries to both the CPSC and the company from consumers, warranty claims and lawsuits. An announcement of an investigation has the potential to depress or even to halt sales and affect the relationship between the company and its distributors. For small companies with limited product lines, it could place the company’s very survival in jeopardy.”
Wolfson stressed that the proposed change was not a regulation requiring a rulemaking, but an internal policy change that wasn’t prompted by any particular event, just an “effort to provide better service.” No final decision had yet been made on when or if it would be implemented.
Catching up to the modern age of information technology has been hard on the manufacturing community. Sure, they want to use apps and tweets and daily emails to inform consumers of the more immediate ways they can be parted with their money. But when something goes wrong, they want the transmission of information to proceed at a horse-and-buggy clip.
For decades, manufacturers have nestled their troubles in the warm, insulating cocoon of 6b. But the Consumer Product Safety Improvement Act, which attempted to re-balance a manufacturer’s right to protect itself against bad publicity with the public’s right to protect itself against a potentially harmful product, has peeled off a few layers, and what emerged – well, let’s just say that it wasn’t a butterfly.
Manufacturers frothed at the mouth at the prospect of a publicly accessible consumer product complaint database, which was required under the law. They predicted that the public database would breed lawsuits like mosquitos in an old tire and doom less robust companies to oblivion. In her statement protesting the database, Commissioner Anne Northup made a funny about the coming epidemic of consumer misinformation:
“Imagine that early one morning a man wearing slippers and a bathrobe props a frost-covered Looeyville ladder against the gutter of his house and starts climbing up to retrieve the family cat. Holding his morning cup of coffee and nursing a severely sprained ankle from the previous night out dancing, he slips off the ladder when he reaches for the cat and tumbles to the ground unharmed.” Later, the “nosy neighbor next door” runs right to his laptop and reports to the database that “an Acme ladder caused a man to fall and break his ankle.”
(We don’t know why she didn’t have the man wearing ice skates while he climbed the ladder. Ah, the missed opportunities.)
NAM’s Republican friends in the U.S. House of Representatives tried to strip the database of its funding. That Hail Mary went wide, and the database has been quietly functioning without destroying the economy.