Publishers’ Hair Shirt on Consumer Protection

Journalists lead great careers by exposing consumer rip-offs and corporate wrongdoings. American consumer movements always feature muckraking, popular reporting and editorial elucidating abuses of industries. But at the same time, news media industries often are of two minds on consumer protection, and sometimes seem to act to protect advertisers over consumers.

This contract was included in Adams’ reporting: “First–It is agreed in case any law or laws are enacted, either State or National, harmful to the interests of the Munyon’s H. H. Remedy Co. that this contract may be cancelled…also [Munyon’s may cancel if] any matter otherwise detrimental to the Munyon’s H. H. Remedy Co.’s interests in permitted to appear in the reading columns, or elsewhere in this paper.”
  • The legendary journalist George Seldes made his career by publishing information about regulatory fines against companies. He had a virtual monopoly on such coverage because it was ignored by other publications.[2]
  • With the rise of the 1930s consumer movement, advertisers and publishers aggressively campaigned to promote advertising as a social good.[3] When the FTC Act amendments were considered by the Senate, the National Editorial Association opposed the bill because of the grant of authority the FTC would receive to regulate advertising.
  • William Randolph Hearst waged an early battle with the FTC over the agency’s investigation and case concerning Good Housekeeping Magazine’s Seal. Writing in the New Republic, Frank Jellinek observed that the major newspapers published pieces objecting to the FTC’s investigation but did not cover its substance at all. The FTC’s investigation revealed some stains on the seal, including allegations of payola where the magazine conditioned issuance of the seal on purchase of advertising. Instead of covering the investigation, magazine officials and trade group representatives whipped up an investigation into whether consumer groups were communist.[4]
  • Newspapers attempted to systemically weaken the National Telemarketing Do-Not-Call Registry,[5] because newspaper subscriptions used to be driven by telemarketing.[6] In recent years, media organizations have been strong opponents of internet privacy rules, because of the industry’s dependence on ad revenue models following the decline of subscription sales. Some publishers extensively use advertising networks. If journalists from these publishers write critically about the online advertising industry, they face retorts of hypocrisy—the journalist’s salary is being subsidized in part by revenue from the privacy invasions reported on.

A press aide to President Johnson warned officials to never argue with a man who buys ink by the barrel.[7] Yet, the FTC seems to be doing exactly this with respect to news outlets that promote scam weight loss remedies, such as Acai berries. The agency released a guide in 2014 explaining how news organizations can spot fraudulent ads, and separately noted that it has the power to police news media organizations.

[1] Samuel Hopkins Adams, The Great American Fraud, Collier’s Weekly, 1905; Mark Sullivan, The Patent Medicine Conspiracy Against The Freedom of the Press, Collier’s Weekly, Nov. 4, 1905.

[2] Tell the Truth and Run: George Seldes and the American Press (New Day Films 1996). Blake Clark, The Advertising Smoke Screen 20 (1943)(noting that FTC actions are essentially “free” news that can be reprinted at will by newspapers but are rarely published).

[3] Inger L. Stole, Advertising on Trial: Consumer Activism and Corporate Public Relations in the 1930s (2006).

[4] Frank Jellinek, Dies, Hearst and the Consumer, 102(1) The New Republic 10 (Jan. 1, 1940).

[5] The Newspaper Association of America opposed creation of a do-not-call registry, asked that newspapers be exempt from it if created, asked that newspapers be exempt from caller-id transmission requirements, and that opt-out retention rules be weakened. Comments of the Newspaper Association of America, In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Dec. 9, 2002.

[6] Janet Whitman, Newspapers Press To Keep Subscribers, The Wall Street Journal, Feb. 4, 2004 (“Gannett Co., the largest newspaper publisher in the U.S., generates 37.8% of its subscribers through telemarketing, compared to 39.1% for the newspaper industry overall…”).

[7] Alan L. Otten, Politics and People: Final Rules, The Wall Street Journal, Sept. 28, 1978.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]