Monday, November 12, 2007

Suppressing information to protect consumers

That's what bans on false advertising are -- it's just that when you use the term "information," as opposed to "falsehoods" or "lies," it sounds bad! And putting it that way suggests that there is a premium on getting the truth/falsity determination right, and perhaps a reason to err on the side of regulatory caution. (I'm not so sure about erring on the side of caution, for a lot of reasons, but we shouldn't be complacent about regulatory competence.)

The NYT has a story on the Pennsylvania Department of Agriculture's impending ban on labeling milk and dairy products to say they come from cows that haven’t been treated with artificial bovine growth hormone. The theory is that the "no rBGH" label scares and confuses consumers about the safety and healthfulness of unlabeled milk. The NYT is skeptical, as am I, that there are a lot of unjustifiably terrified consumers out there (here's another critic of attempts to ban voluntary labeling) -- but, if one accepts that milk from treated cows is indistinguishable in its effects on the human body from milk from untreated cows, I do think matters get complicated. There are lots of other good reasons to reject rBGH-treated milk, but immediate health/safety consequences are not part of those reasons.

So, it's possible to argue that labels induce consumers to spend more than they'd prefer because they mistakenly believe that buying "hormone-free" milk is better for their children. Here's that argument, though I can't help wondering what hand Monsanto had in convincing the speaker of this.

In my forthcoming article about dividing true from false in the context of commercial speech doctrine, I make the following argument:
Consumers with concerns over the increased industrialization of the food supply, the vulnerability of monocultures, and the environmental effects of GMO foods, among other things, might benefit from “non-GMO” labels even if GMO foods are just as safe for human consumption as non-GMO foods. But it is important to acknowledge that even if this criticism is correct, labeling could mislead consumers, albeit differently. Establishing that some consumers wish to avoid GMO foods on non-safety grounds does nothing to refute either of the FDA’s major premises: GMO foods are safe, and labeling will mislead some significant number of consumers about safety.
For good articles on this general subject, see Douglas Kysar's Preferences for Processes and Dan Burk's The Milk Free Zone: Federal and Local Interests in Regulating Recombinant bST, 22 Columbia J. Env. L. 227 (1997).

The reason that there is no neutral regulatory position is that even voluntary labeling has preference-shaping effects. As the NYT story points out: "Using [Pa. secretary of agriculture] Wolff’s reasoning, you could argue that organic labels on milk are unfair because they suggest that non-organic food is inferior. The same goes for labels for “natural,” “from grass-fed cows” and “locally produced.”


Anonymous said...


I may be missing something but are you saying that just by labeling something as non-GMO necessarily will confuse consumers about safety? Or that such confusion is possible and should be acknowledged? If it is the question of possibility then it seems that any possible harm from information can be questioned. Put differently, why assume that the consumers who may be confused regarding safety need protection more than those who simply want the information and then draw their own conclusion or make their choice for other reasons (as you identify)? I think you are noting that the FDA premises are not refuted but what supports its position? Of course the answers may be in your article which I look forward to reading.

RT said...

Well, the question is always how consumers are likely to react. Why do producers put claims on food? Often there are health reasons, though not always. It's certainly reasonable to conclude that, unless told otherwise, consumers will think that food claims are health-based.

And it's absolutely true that this is a problem with virtually every advertising claim -- "First Choice of Doctors" is a classic one, where doctors may be judging on standards that don't actually matter to consumers, but it's a persuasive claim because of its penumbra.

In my article, I suggest that there may be distributional consequences to favoring consumers who benefit from "GMO-free" labels because of their non-health-based preferences for GMO-free foods -- on average, such consumers are likely to be wealthier than consumers who care only about safety and price. So suppressing "GMO-free" could be a progressive regulation if it's correct that consumers in the latter category will mistakenly conclude that they need to pay more for their milk for it to be safe.

As far as I've seen, the criticisms of rBGH milk don't claim that the milk itself has a different health/safety profile. It's allegedly bad for the cows, but the drinkers seem unharmed. So even the anti-rBGH folks aren't disputing the FDA's premises (except insofar as they invoke the precautionary principle -- there might be harms we don't yet know about); they're disputing their relevance.