Regulators Continue to Gorge Themselves

by S.M. Oliva
Nov. 18, 2010

Walter Olson of the Cato Institute notes that New York City’s government is disseminating blatantly false advertising regarding the health risks of salt:

[The ad] shows a can of soup bursting at the seams with table salt, whole mounds and piles of it. The city's underlying point is not 100 percent off-base -- healthful in most other ways, conventional canned soup is a relatively salty food -- but the actual amount of salt in a can is more like 1 teaspoon, not the third of a cup or more depicted in the city's ridiculously exaggerated photo. Not to put too fine a point on it, but the Bloomberg soup ad is built on a visual lie.

What would happen if a private advertiser tried to get away with imagery as misleading as this? Well, in 1970, in a case still taught in business schools, Campbell's got caught manipulating the soup pictures in its ads; its photographers had put marbles at the bottom of the bowl so that the pleasing vegetables would be more visible on top. The Federal Trade Commission filed a deceptive-advertising complaint to make the company stop.

Of course, the FTC itself is part of the lynch mob against the food industry. As I noted in 2005, the Commission objected to Kentucky Fried Chicken ads that made the vague -- and not empirically false -- claim that its fried chicken was “healthier” than a whopper. One commissioner, coincidentally a former New York State official, was so outraged that KFC would “exploit a national health crisis” -- obesity -- that she advocated seizing some of the company’s revenues and giving it to a politically correct nonprofit organization.

And just today, the FTC sent extortion letters to four companies that market caffeinated beverages, notifying them that they will be punished if they continue to exercise their right to engage in free speech. Acting in conjunction with the Food and Drug Administration -- the one monopoly the FTC will protect at all costs, aside from itself -- the FTC gave the companies 15 days to change their advertising or face regulatory action. This is a blatant attempt to publicly convict and punish these companies without trial.

Incidentally, Olson notes that, “The FTC's authority would not extend so far as to ordering New York City to cease its misrepresentations, and for various reasons (including the principle that states and localities ought largely to retain independence from federal dictation) we should be glad it doesn't.” I’m not so sure about that either. The FTC is currently litigating an administrative complaint against a state regulator on the grounds that the Federal Trade Commission Act overrules state law (and the Tenth Amendment).