BMGT 496 - Business Ethics - Final Exam

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BMGT496-Week5ResourcesandCitations.pdf
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BMGT 496 - Week 5 Citations

(AJFET, 2016)

(Basu, 2015)

(Brusseau, 2012)

(Cao, 2018)

(CBS News, 2013)

(Crowley, 2017)

(Daly, 2014)

(DM & Kitanovic, 2017)

(Douglas, 2012)

(Eustachewich, 2018)

(Federal Trade Commission, 2010)

(Federal Trade Commission, 2016)

(Fox, 2016)

(Fried, 2021)

(Gallagher, 2015)

(Gerard, 2010)

(Gupta, Pirsch, & Girard, 2010)

(Harris, 2014)

(Herper, 2013)

(McKenna, 2015)

(Najarian, 2020)

(Neofotistos, Cowles, & Sharma, 2017)

(Parker, 2018)

(Paulson, 2016)

(Quillen, 2018)

(Quinn, 2012)

(Sanchez, 2014)

(Thompson, 2016)

(Trilling, 2016)

(Weinmann & Bhasin, 2011)

(Wischhover, 2018)

Bibliography AJFET. (2016, April 4). Exploitative Advertising Campaigns are Targeting our Children.

Retrieved April 11, 2021, from MPK732 Marketing Management (Cluster B): https://mpk732t12016clusterb.wordpress.com/2016/04/04/exploitative- advertising-campaigns-are-targeting-our-children/

Basu, M. (2015, September 21). For first time, company owner faces life sentence for food poisoning outbreak. Retrieved April 12, 2021, from CNN: https://www.cnn.com/2015/09/20/us/peanut-butter-salmonella-trial/index.html

Brusseau, J. (2012). Chapter 12: The Selling Office: Advertising and Consumer Protection. In The Business Ethics Workshop (pp. 529-566). Washington, DC: Saylor Academy. Retrieved April 12, 2021, from https://saylordotorg.github.io/text_the-business- ethics-workshop/

Cao, P. (2018, October 3). Tim Cook to talk consumer privacy and data ethics at European data protection conference later this month. Retrieved April 12, 2021, from 9To5 Mac: https://9to5mac.com/2018/10/03/tim-cook-eu-gdpr-comittee-talk/

CBS News. (2013, April 30). Controversial caffeinated products. Retrieved April 12, 2021, from CBS News: https://www.cbsnews.com/pictures/controversial-caffeinated- products/10/

Crowley, L. (2017, February 17). Uber’s Surge Pricing: Is it Ethical? Retrieved April 12, 2021, from University of Puget Sound: https://blogs.pugetsound.edu/econ/2017/02/17/ubers-surge-pricing-is-it-ethical/

Daly, A. (2014, January 7). FTC to Crack Down on Deceptive Weight-Loss Ads. Retrieved April 11, 2021, from Women's Health Magazine: https://www.womenshealthmag.com/weight-loss/a19935515/weight-loss-ads/

DM, & Kitanovic, M. (2017, July 25). Astroturfing: Government shills are flooding the web. Retrieved April 11, 2021, from Blasting News:

https://us.blastingnews.com/opinion/2017/07/astroturfing-government-shills- are-flooding-the-web-001871693.html

Douglas, T. (2012, April 18). Practical Ethics: Animal antibiotics. Retrieved April 12, 2021, from University of Oxford: http://blog.practicalethics.ox.ac.uk/2012/04/animal- antibiotics/

Eustachewich, L. (2018, July 11). Controversial lollipop ad goes up in Times Square. New York Post. Retrieved April 12, 2021, from https://nypost.com/2018/07/11/controversial-lollipop-ad-goes-up-in-times- square/

Federal Trade Commission. (2010, December 6). FTC Action Puts Deceptive Marketer Out of the Debt Relief Business. Retrieved April 12, 2021, from Federal Trade Commission: https://www.ftc.gov/news-events/press-releases/2010/12/ftc- action-puts-deceptive-marketer-out-debt-relief-business

Federal Trade Commission. (2016, December). Federal Trade Commission Act Section 5: Unfair or Deceptive Acts or Practices. Retrieved April 11, 2021, from Federal Reserve: https://www.federalreserve.gov/boarddocs/supmanual/cch/ftca.pdf

Fox, M. (2016, January 5). E-Cigarette Ads Target Millions of Kids, CDC Says. Retrieved April 11, 2021, from NBC News: https://www.nbcnews.com/health/kids-health/e- cigarette-ads-target-millions-kids-cdc-says-n490601

Fried, M. (2021, January 7). Ethical diamonds: What Conscientious Consumers Need to Know. Retrieved April 12, 2021, from The Diamond Pro: https://www.diamonds.pro/education/ethical-diamonds-conscientious- consumers-need-know/

Gallagher, C. (2015, September 30). Business Ethics Alive: Blue Bell vs Peanut Corporation of America. Retrieved April 12, 2021, from Chuck Gallagher: https://www.chuckgallagher.com/2015/09/30/business-ethics-alive-blue-bell-vs- peanut-corporation-of-america/

Gerard, J. (2010, October 27). 5 Lessons Learned From Mattel's Lead Paint Crisis. Retrieved April 12, 2021, from i-Sight: https://i-sight.com/resources/5-lessons- learned-from-mattels-lead-paint-crisis/

Gupta, S., Pirsch, J., & Girard, T. (2010, September 9). An Empirical Examination of a Multinational Ethical Dilemma: The Issue of Child Labor. Journal of Global Marketing, 23(4), 288-305. doi:https://doi.org/10.1080/08911762.2010.504519

Harris, J. (2014, January 15). Monster drinks: Are the energy drinks marketed to children? Retrieved April 12, 2021, from Los Angeles Times: https://www.latimes.com/food/dailydish/la-dd-monster-drinks-marketing- children-20140115-story.html

Herper, M. (2013, April 25). Update: Hyundai Apologizes For Car Ad Depicting Attempted Suicide. Retrieved April 11, 2021, from Forbes: https://www.forbes.com/sites/matthewherper/2013/04/25/a-hyundai-car-ad- depicts-suicide-it-is-so-wrong-i-cant-embed-it-in-this-post/?sh=7d03af87554d

McKenna, M. (2015, March 31). MATTEL: PLAYING WITH ETHIC. Retrieved April 12, 2021, from Doing Well By Doing Good: https://stakeholder13.wordpress.com/2015/03/31/mattel-playing-with-ethics/

Najarian, B. (2020, March 5). The Most Offensive Urban Outfitters Products to Ever Exist. Retrieved April 11, 2021, from Ranker: https://www.ranker.com/list/urban- outfitters-controversy-list/brigittenajarian

Neofotistos, A., Cowles, N., & Sharma, R. (2017, May 28). Choking Hazards: Are Current Product Testing Methods for Small Parts Adequate? International Journal of Pediatrics, 2017, 1-4. doi:https://doi.org/10.1155/2017/4705618

Parker, S. (2018, May 31). The Never-Ending War on Fake Reviews. Retrieved April 11, 2021, from The New Yorker: https://www.newyorker.com/tech/annals-of- technology/the-never-ending-war-on-fake-reviews

Paulson, M. (2016, September 5). Sorry About That: Wells Fargo to End Ads Suggesting Science Over Arts. New York Times, p. 3. Retrieved April 11, 2021, from https://www.nytimes.com/2016/09/06/theater/sorry-about-that-wells-fargo-to- end-ads-suggesting-science-over-arts.html

Quillen, M. (2018, October 22). 2.5 million pounds of taquitos recalled for salmonella, listeria concerns. Retrieved April 12, 2021, from WTXL Tallahassee: https://www.wtxl.com/news/million-pounds-of-taquitos-recalled-for-salmonella- listeria-concerns/article_0ce2f7ea-d62c-11e8-b47a-c3af1fe651bf.html

Quinn, B. (2012, October 1). Ikea apologises over removal of women from Saudi Arabia catalogue. Retrieved April 11, 2021, from The Guardian: https://www.theguardian.com/world/2012/oct/02/ikea-apologises-removing- women-saudi-arabia-catalogue

Sanchez, R. (2014, February 4). At sentencing, cantaloupe growers apologize for deadly listeria outbreak. Retrieved April 12, 2021, from CNN:

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths- sentencing/index.html

Thompson, D. (2016, January 18). Study eyes candy-flavored e-cigarette ads targeted to kids. Retrieved April 11, 2021, from CBS News: https://www.cbsnews.com/news/candy-flavored-e-cigarette-ads-appeal-to-kids/

Trilling, D. (2016, September 20). Conflict Minerals and Firms’ Ignorance Over Their Supply Chains. Retrieved April 12, 2021, from Business Ethics: The Magazine of Corporate Responsibility: https://business-ethics.com/2016/09/20/1237-conflict-minerals- and-firms-ignorance-over-their-supply-chains/

Weinmann, K., & Bhasin, K. (2011, September 16). 14 False Advertising Scandals That Cost Brands Millions. Retrieved April 12, 2021, from Insider: https://www.businessinsider.com/false-advertising-scandals-2011-9

Wischhover, C. (2018, September 11). The fall of “anti-aging” skin care. Retrieved April 11, 2021, from Vox: https://www.vox.com/the-goods/2018/9/11/17840984/skin-care- anti-aging-drunk-elephant

4/10/2021 Exploitative Advertising Campaigns are Targeting our Children | T1 2016 MPK732 Marketing Management (Cluster B)

https://mpk732t12016clusterb.wordpress.com/2016/04/04/exploitative-advertising-campaigns-are-targeting-our-children/ 1/3

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Exploitative Advertising Campaigns are Targeting our Children

APRIL 4, 2016  /  AJFET

More than ever before, children are being socialised as consumers, with children under 14 years are spending approximately $40 billion annually.  Marketers have recognised children as arguably the most important consumer of all and use clever campaigns to target and exploit them.

Why kids?

Targeting children in advertising campaigns has a major influence on the consumption patterns of the family.  Increased marketing to children has created a phenomenon called ‘Pester Power’, where children constantly nag their parents for the latest products such as toys, clothes, gadgets, junk food etc.  Parents are forced to choose between being the ‘bad guy’ and saying “no” and giving in.  We see this kind of persistent nagging in the supermarket aisles where children pester their parents for junk food items that are strategically positioned low on the selves to correspond with children eyelevel.  Then there is the notion of “Importance Nagging” whereby children take advantage of their parents desire to provide the best for their children.  Children claim that something is necessary for their general health and wellbeing in turn appealing to their parents feeling of guilt.

The Australian Association of National Advertisers’ Code for Advertising & Marketing Communication states that advertising and marketing must not undermine the authority of parents or appeal to children to urge their parents to buy a product for them.  Although advertisements do not specifically say “hey kids, make sure your Mum and Dad buy you the latest Xbox game this Christmas”, the sole purpose of marketing to children is to incite this response.

4/10/2021 Exploitative Advertising Campaigns are Targeting our Children | T1 2016 MPK732 Marketing Management (Cluster B)

https://mpk732t12016clusterb.wordpress.com/2016/04/04/exploitative-advertising-campaigns-are-targeting-our-children/ 2/3

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Targeting children as consumers not only affects the consumer behaviour of their family but also helps shape their future consumer behaviour as an adult.  The earlier a child is socialised to a brand, the more likely they are to be loyal to that brand in the future.

How TV advertising is grooming children as consumers

Children are bombarded with advertisements from a very young age.  Between the ages of 2 – 11, the average child would view over 25,000 television commercials per year.   Although young children are often able to distinguish the difference between an advertisement and a television programme, they are unable to identify the persuasive nature of these until at least 8 years old.

Alarmingly, children can identify brand names, symbols, colours, jingles and logos from about 2 years old.   Identification of perceptual and sensory cues is developed at an age before children are unable to differential from entertainment and the intent of selling.   Furthermore, children are more susceptible to the persuasive stimuli, this coupled with the fact that they are unable to understand the persuasive intent of marketing enables them to be exploited as consumers.

This YouTube clip, “Big Burger is Watching”, satirically demonstrates the affect of visual marketing on children and how it can undermine the authority of parents.

Why should we be concerned?

Not only are advertising campaigns exploiting children but they also can have damaging social consequences.  Gender specific advertising that marketing Disney Princesses to girls and truck and cars to boys perpetuate gender stereotypes, therefore having on affect gender socialisation.

In addition, the advertising campaigns around junk food are contributing to the growing epidemic of childhood obesity in Australia.  Some commentators believe the government should introduce plain packaging on junk food as they have for cigarettes in an attempt to limit the affect of brand marketing on children.

As young children do not have the capacity to participate in a consumer environment, do you think it is unethical of companies to exploit the vulnerabilities children for profit?  Does targeting children as consumer commercialise their childhood?

It will be interesting to see what steps, if any, are taken by authorities to regulate this marketing phenomenon.

Amy Fettes (216048396)

References:

4/10/2021 Exploitative Advertising Campaigns are Targeting our Children | T1 2016 MPK732 Marketing Management (Cluster B)

https://mpk732t12016clusterb.wordpress.com/2016/04/04/exploitative-advertising-campaigns-are-targeting-our-children/ 3/3

Campaign for a Comercial Free Childhood, ‘Marketing to Children Overview’ http://www.commercialfreechildhood.org/resource/marketing-children- overview (accessed 23 March 2016)

Jolly, R 2011, ‘Marketing Obesity? Junk food, advertising and kids’http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1011/11rp09#_Toc282609498(accessed 23 March 2016)

Oates, C, Blades, M & Gunter, B 2002 ‘Children and television advertising: When do they understand the persuasive intent?’, Journal of Consumer Behaviour vol. 1, issue 3, pp 238-245

Australian Association of National Advertisers, ‘Code for Advertising & Marketing Communication to Children’ 2016, http://aana.com.au/content/uploads/2016/02/Advertising_Marketing_Comms_to_Children_Code_081215.pdf(Accessed 4 April 2016)

Image Sources

Image 1: http://www.commercialfreechildhood.org/blog/exploiting-children-one-commercial

Image 2: http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1011/11rp09#_Toc282609498

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4/12/2021 Peanut company owner faces life in jail for salmonella - CNN

https://www.cnn.com/2015/09/20/us/peanut-butter-salmonella-trial/index.html 1/11

For first time, company owner faces life sentence for food poisoning outbreak By Moni Basu, CNN Updated 7:54 AM EDT, Mon September 21, 2015

01:53 - Source: WALB

Verdict delivered in salmonella trial

STORY HIGHLIGHTS

A jury convicted Stewart Parnell of knowingly marketing tainted peanut paste

That paste was traced to the deadliest salmonella outbreak in recent years

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4/12/2021 Peanut company owner faces life in jail for salmonella - CNN

https://www.cnn.com/2015/09/20/us/peanut-butter-salmonella-trial/index.html 2/11

(CNN) —  Even after his mom died, Je� Almer bought a Mother’s Day card splashed in pastels and bearing the sweetest of words. He tucked a photo of his mother inside the card and addressed it to Stewart Parnell, the man who owned and ran Peanut Corporation of America.

Inside, Almer wrote: I did not know where to send this to since my mother is no longer alive, so I am sending it to you, the person who is responsible for where she is today.

Shirley Mae Almer, 72, survived lung cancer and a brain tumor, but not one of America’s favorite foods: peanut butter. Parnell’s company, PCA, had manufactured the creamy stu� that she slathered on her toast at a nursing home in Minnesota. It was laced with deadly salmonella.

Courtesy Je� Almer

Shirley Almer, center, died of salmonella in peanut butter.

Almer died a few days before Christmas in 2008. Her son sent the Mother’s Day card to let Parnell know how he felt: “I know what you did. You know what you did. And I am not walking away from this.”

That was the only communication Almer ever had with Parnell, who was convicted a year ago in a groundbreaking food safety trial. On Monday, Almer will finally get a chance to directly address the man he accuses of his mother’s death, when victims of that peanut butter

Victims' families say Parnell deserves a harsh sentence

4/12/2021 Peanut company owner faces life in jail for salmonella - CNN

https://www.cnn.com/2015/09/20/us/peanut-butter-salmonella-trial/index.html 3/11

address the man he accuses of his mother s death, when victims of that peanut butter salmonella outbreak will be allowed to speak at Parnell’s sentencing.

Parnell faces life in prison, according to court documents that detailed the sentencing guidelines. His brother and food broker, Michael Parnell, faces 17 years, and a plant manager, Mary Wilkerson, could be behind bars for five years.

It is the first time that a food executive has been convicted on federal felony charges linked to a food poisoning outbreak. A life sentence for Parnell would be the harshest sentence ever doled out.

Almer, who became a food safety activist after his mother’s death, was surprised by the potential sentence, as were others who have worked for years for stronger legislation and enforcement to keep America’s food supply free of contamination.

“Then again there is nothing to compare this to,” Almer said. “This is unprecedented.”

’Just ship it’ The salmonella outbreak almost seven years ago was the deadliest event of its kind in recent years.

Federal and state disease detectives traced the deaths of nine people, including Shirley Almer, to PCA’s peanut processing plant in Blakely, Georgia. Another 714 people in 46 states were sickened, some critically.

A jury in Georgia convicted Parnell last year on 72 counts of conspiracy, fraud and other federal charges, in what food safety advocates hailed as a long-awaited victory.

“Our government seems to be sending a clear message that poisoning your customers may well land you in jail,” said Bill Marler, a Seattle food safety lawyer who represented several victims of the outbreak, including Almer.

At trial, prosecutors called 45 witnesses and presented more than 1,000 documents including months of emails, lab results and financial records to make their case that Parnell knew about the contamination covered it up and ordered PCA to continue shipments of salmonella-tainted

RELATED GALLERY

Peanut butter trial

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RELATED GALLERY

Worst foodborne illness outbreaks

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4/12/2021 Peanut company owner faces life in jail for salmonella - CNN

https://www.cnn.com/2015/09/20/us/peanut-butter-salmonella-trial/index.html 4/11

the contamination, covered it up and ordered PCA to continue shipments of salmonella-tainted peanut paste used to manufacture a variety of products.

The prosecution’s blistering opening statement contained three now-infamous words Parnell wrote in a March 2007 email to a plant manager about contaminated products: “Just ship it.”

Defense statements and witnesses, which took all of 104 minutes, portrayed Parnell as a small- business owner who was scapegoated by the government. Defense attorneys argued that Parnell did not know about mismanagement at the plant, that he was the fall guy for other employees’ wrongdoing.

The prosecution was a rarity, Marler said, because the Department of Justice charged the Parnell brothers with felonies. Prior cases involved misdemeanors.

Mark Wilson/Getty Images

Stewart Parnell invoked the Fifth Amendment at a congressional hearing.

“Prosecutors took a risk and fortunately, the jury believed them,” Marler said. “The jury saw this for what it was. The emails and documents told a story of a company that was more interested in shipping out products than products that were safe.”

1.4 million cases a year The Parnell brothers, Moore said, “could easily spend the rest of their lives in prison.”

A t tb k f l ll f b h i f t d 418 l i 31 t t

4/12/2021 Peanut company owner faces life in jail for salmonella - CNN

https://www.cnn.com/2015/09/20/us/peanut-butter-salmonella-trial/index.html 5/11

A current outbreak of salmonella from cucumbers has infected 418 people in 31 states, according to the Centers for Disease Control and Prevention. The Arizona Daily Star reported the death of a woman after eating a tainted cucumber.

Salmonella fast facts

Former employees of Peanut Corp. described filthy conditions at the Georgia plant. Federal inspectors found roaches, rats, mold, dirt, accumulated grease and bird droppings during their raid. They also found a leaky roof.

Salmonella is often associated with meat, poultry, eggs and raw milk – products from animals that are carriers of the bacteria. It also thrives in the intestines of birds and can be found in fruits and vegetables and in ingredients made from them.

The presence of water in what is supposed to be a dry processing facility for peanuts is like adding gasoline to fire for salmonella, food safety experts say.

Health o�cials discovered similar poor conditions at Peanut Corp.’s other processing plant in Plainview, Texas. The company filed for Chapter 7 bankruptcy shortly after it was shut down.

Two former plant managers worked out deals with the government in exchange for their testimonies against Parnell.

Almer sat through many days of Parnell’s trial last year in a courtroom in Albany, Georgia. He is traveling from his Minnesota home this weekend back to Albany. He said he needed to speak at Parnell’s sentencing for his personal well-being. He wants to look Parnell and other company executives in the eye, talk about his mother and tell them about “what they took away and what they will never be able to take away.”

He said he was worn out from all these years of talking about his mother’s death and the sentencing would finally bring some sort of end. It felt like getting to the last chapter after slogging through a lengthy novel like “War and Peace.”

“People think salmonella is something that gives you a stomachache,” Almer said. “It killed my mother.”

4/12/2021 Peanut company owner faces life in jail for salmonella - CNN

https://www.cnn.com/2015/09/20/us/peanut-butter-salmonella-trial/index.html 6/11

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4/12/2021 Peanut company owner faces life in jail for salmonella - CNN

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4/12/2021 Peanut company owner faces life in jail for salmonella - CNN

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4/12/2021 Tim Cook to talk consumer privacy and data ethics at European data protection conference later this month - 9to5Mac

https://9to5mac.com/2018/10/03/tim-cook-eu-gdpr-comittee-talk/ 1/4

Tim Cook to talk consumer privacy and data ethics at European data protection conference later this month Peter Cao - Oct. 3rd 2018 10:32 am PT @iPeterCao

Apple CEO Tim Cook is set to be the keynote speaker at a European data protection conference taking place in Brussels later this month. The EU recently introduced a new data protection framework, GDPR, and some U.S lawmakers are now questioning whether or not we’ll see a similar stance in the United States.

As reported by TechCrunch, Europe’s data protection commissioners will be gathering during a week this month to discuss GDPR and what it plans for the future. They will also gather to hear Cook talk data protection and data ethics.

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4/12/2021 Tim Cook to talk consumer privacy and data ethics at European data protection conference later this month - 9to5Mac

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Of course, most Apple fans know that Cook and Apple have been publicly talking about privacy for many years. Apple believes privacy is a fundamental human right, and that it is one of the bigger issues in the 21st century. The company has gone as far as testify in front of the U.S senate arguing in favor of a federal privacy legislation, which would bring similar benefits to Europe’s GDPR laws.

In a few weeks’ time Cook will literally stand alongside the architects of Europe’s GDPR, talking up privacy and ethics at the center of a Union whose founding charter grants its citizens data protection as a fundamental right.

They are most interested in seeing Cook’s angle on privacy and protecting consumer data, especially when fighting against countries such as China which is notoriously known for its lack of strong privacy laws.

It’s clear as the first trillion-dollar company in America that a business can be successful while still being privacy-oriented. Other tech brands such as Facebook, Google, and Amazon are notoriously known for collecting gobs of user data to “make the experience better”. However, Apple has proven time and time again that this can be done with collecting minimal to no user data.

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Peter writes for 9to5Mac. He has a passion for music and technology and has accepted the Bluetooth audio revolution, but will never give up the beauty of vinyl.

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

https://www.cbsnews.com/pictures/controversial-caffeinated-products/10/ 1/10

Controversial caffeinated products

A P R I L 3 0 , 2 0 1 3 / 2 : 5 1 P M   / C B S N E W S

Caffeine in coffee and tea has been tied to health benefits, including reduced risks for heart disease. 

But, less is clear about the health effects of caffeine added to foods such as potato chips and gum --

especially in children and teens, who health advocates warn may be likely to reach for these snacks. 

"It is disturbing," FDA deputy commissioner of foods Michael Taylor told the Associated Press of the recent

trend of adding caffeine to foods. "We're concerned about whether they have been adequately

evaluated." 

Several other caffeinated products have been scrutinized recently over fears children may harm their

health if they get their hands on them. Keep clicking to see some caffeinated products that have made

recent headlines...

W I K I M E D I A C O M M O N S

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

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Wrigley's Alert gum

The FDA kicked off its new look at caffeine's effects on children's and teens as a response to the April

2013 introduction of a new caffeinated gum from Wrigley. 

One piece of Wrigley's Alert Energy Caffeine Gum contains the same amount of caffeine as half a cup of

coffee, according to the product's label -- about 40 milligrams of caffeine. 

The product is marketed to consumers ages 25 and older, but critics argue it's not enough to say a

product is marketed towards adults when the caffeine is added to items like candy that are attractive to

children. 

FDA officials have held meetings with some of the large food companies that have ventured into

caffeinated products, including Mars Co., which owns Wrigley, according to the AP.

A P P H O T O / W M . W R I G L E Y J R . C O M P A N Y

Arma Energy Snx

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

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Arma Energy Snx chips and granola are made with salt, spices, B vitamins, caffeine and taurine. The latter

two ingredients are commonly found in energy drinks. 

A servings of Arma's kettle cooked energy chips contains about 70 milligrams of caffeine, about the same

as an espresso shot. 

The American Academy of Pediatrics says caffeine has been linked to harmful effects on young people's

developing neurological and cardiovascular systems.

A R M A E N E R G Y S N X

Cracker Jack'd

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

https://www.cbsnews.com/pictures/controversial-caffeinated-products/10/ 4/10

In November 2012, the Center for Science in the Public Interest (CSPI) sent a letter to the FDA urging its

officials to investigate three caffeinated products that may get into the hands of children, including Frito-

Lay's Cracker Jack'D. The caffeinated snacks contained about 70 milligrams of caffeine. 

"Unless the FDA begins enforcing its regulations, I fear that we'll see caffeine being added to ever-more

improbable drinks and snacks, putting children, unsuspecting pregnant women, and others at risk," CSPI

executive director Michael F. Jacobson said in a written statement at that time. "How soon before we have

caffeinated burgers, burritos, or breakfast cereals?" 

"Cracker Jack'D is a product line specifically developed for adult consumers and will not be marketed to

children," a company spokesperson said at the time. "The package design and appearance are wholly

different from Cracker Jack to ensure there is no confusion among consumers."

H T T P : / / W W W. N A T I O N W I D E C A N D Y. C O M

MiO "water enhancers"

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

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Kraft's MIO water enhancers drew the ire of the CSPI because young children may be more likely to use

beyond the recommended servings of the colorful, sweetened product. 

MiO Energy comes in 32- and 48-milliliter squirt bottles that dispense half-teaspoon-sized servings

intended to flavor water with each serving containing about 60 milligrams of caffeine, about as much as a

small cup of coffee. 

"We suspect that many children would add several squirts of the colorful liquid to a glass of water," CSPI

said in a letter to the FDA and Kraft.

M I O W E B S I T E

Jelly Belly's "Extreme Sport Beans"

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

https://www.cbsnews.com/pictures/controversial-caffeinated-products/10/ 6/10

Each 1-ounce package of Jelly Belly's "Extreme Sport Beans" contains 50 milligrams of caffeine, the CSPI

noted in its letter to the FDA. 

The CSPI said in its letter it worries companies large and small can begin adding caffeine to all kinds of

foods and beverages, leading to serious health problems for young children.

J E L LY B E L LY

AeroShot caffeine inhalers

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

https://www.cbsnews.com/pictures/controversial-caffeinated-products/10/ 7/10

This next product was not marketed specifically as a food, but the FDA said it should have been based on

how it works. 

Breathable Foods' AeroShot caffeine inhalers deliver "airborne energy," according to its makers, by

providing a caffeine boost on-the-go when users breathe in a dissolved fine powder from the lipstick-

sized canister. 

Democratic U.S. Sen. Charles Schumer of New York had pressed the FDA in December 2011 to review

AeroShot, saying he feared it would be used as a club drug that allows people to stay up all night

drinking.

The FDA reviewed the product, and warned the company to change "misleading" labeling of its product

as "inhalable caffeine," because the product is technically a dietary supplement that should be ingested.

The agency also chastised the company for advertising it for use when "hitting the books," an activity

common in children in adolescents. 

In this Jan. 23, 2012 still photo taken from video, students try free samples of AeroShot, an inhalable

caffeine packed in a lipstick-sized canister, on the campus of Northeastern University in Boston. Harvard

University engineering professor David Edwards, created AeroShot, which went on the market in late

January.

A P

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

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Four Loko

Energy drinks have also gotten federal attention in recent years over potential health risks for children

and young people. 

Four Loko was an alcoholic energy drink that got the attention of federal investigators because teens and

young adults were blacking out after drinking the products. The FDA in 2010 warned the makers of Four

Loko -- along with other companies that made similar beverages -- that caffeine is an unsafe food additive

for alcoholic beverages and the products' marketing targets young adults who are especially vulnerable to

adverse behavioral effects. Four Loko eventually removed caffeine from its beverages. 

Alcoholic energy drinks "Four Loko" (left) and "Joose" are shown at a press conference, Nov. 10, 2010, at

the Capitol in Olympia, Wash.

A P P H O T O

5-Hour-Energy

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

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In November 2012, the FDA announced it was investigating 13 deaths and 33 hospitalizations linked to 5-

hour Energy drinks, a 1.9-ounce caffeinated "shot."  Substance Abuse and Mental Health Services Administration noted a ten-fold increase in energy-drink

related emergency room visits from 2005 to 2008. About 52 percent of emergency room visits were from

people ages 18 to 25 who had mixed the products with alcohol or other drugs.  5-Hour Energy CEO Manoj Bhargava told CBS News medical correspondent Dr. Jon LaPook at the time

his product was safe, and his son in his early 20s uses it everyday.

L I V I N G E S S E N T I A L S

Monster Energy Drink

4/10/2021 Monster Energy Drink - Controversial caffeinated products - CBS News

https://www.cbsnews.com/pictures/controversial-caffeinated-products/10/ 10/10

A lawsuit filed last year by the family of 14-year-old Anais Fournier said the girl went into cardiac arrest

after drinking two 24-ounce cans of Monster drinks in a 24-hour period. The Food and Drug

Administration is also investigating reports of deaths linked to energy drinks, including five that cite

Monster beverages. 

Monster denied its products role in the girl's death, saying she had a pre-existing medical condition.

Monster added its target market is 18 to 34-year-olds, but that its drinks are nevertheless safe for children.

F I V E H O L E F O R F O O D / F L I C K R

4/12/2021 Uber’s Surge Pricing: Is it Ethical? – Sound Economics

https://blogs.pugetsound.edu/econ/2017/02/17/ubers-surge-pricing-is-it-ethical/ 1/2

Uber’s Surge Pricing: Is it Ethical? Posted on February 17, 2017 by Lukie Crowley

Uber has been popping up in the news quite a bit recently, not really for anything good either. They were

criticized heavily when they stayed active (only shutting down the surge pricing) right after the Muslim

ban was announced, despite the fact that taxi drivers around the JFK airport protested doing any driving

in effort to show their disagreement with the ban. Uber’s CEO Travis Kalanick made a statement

condemning the ban right after and removed himself from Trump’s economic advisory council due to

heavy pressure. Kalanick’s statement can be seen below.

“I also let him know that I would not be able to participate on his economic council. Joining the group was not meant to be an endorsement of the president or his agenda but unfortunately it has been misinterpreted to be exactly that.”

Again, this was after much pushback from their users, as they had already lost 200,000 users by

February 3rd. Now it is important to account for the fact that those number of users only account for 0.5%

of the amount that use the company, but the pushback in general was significant enough for him to leave

the council and set up a three million dollar legal defense fund for those affected by the ban. This fund

was set up after Lyft had immediately announced that they would be donating one million dollars over a

four year period to the ACLU.

Now, it was certainly unethical for Uber to be active for the period of time that they were after the Muslim

ban was announced, but the surge pricing standing alone is a different topic, and an important one to

discuss.

Uber has created surge pricing almost as a brand since its inception in 2010, with the general idea of

surge pricing being that if you are in a crowded location the rates will automatically go up based on the

demand for a ride. Additionally, this idea is that if the surge pricing is high enough more drivers will

participate and there will be more overall supply to those who need to go somewhere. Many people have

criticized Uber because of this strategy due to the fact that surge pricing still occurs on holiday and

general busy events. In my opinion, it is not unethical to have surge pricing on during the holidays

because just like any other company, you might see mark ups when an item is being demanded at such

a high rate or in such a short period of time.

Sound Economics Everyday economics from the University of Puget Sound

Search

4/12/2021 Uber’s Surge Pricing: Is it Ethical? – Sound Economics

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It does become unethical in events like the Sydney hostage crisis in 2014 where they originally left surge

pricing on in the area (obviously extremely wrong for people trying to escape) but then reimbursed the

passengers later. There is a line to be crossed with surge pricing, and Uber has to be very careful when

these issues come up. When it comes, to sports, concerts and general busier events it is a fine business

model to have when there are generally more people demanding a ride.

Put yourself in the position of the driver, the one that may simply do it because of the surged prices.

Now, put yourself in the position of the consumer like many of us that have used Uber or similar services.

Make a conclusion and let me know what you think!

 

 

 

This entry was posted in Economics and tagged ethics, Muslim ban, Surge prices, Trump, Uber by

Lukie Crowley. Bookmark the permalink [https://blogs.pugetsound.edu/econ/2017/02/17/ubers-

surge-pricing-is-it-ethical/] .

4/10/2021 Feds to Bust Deceptive Weight-Loss Ads

https://www.womenshealthmag.com/weight-loss/a19935515/weight-loss-ads/ 1/3

FTC to Crack Down on Deceptive Weight- Loss Ads Several big companies have to fork over major cash for making false promises

BY ANNIE DALY  JAN 7, 2014

Today, the Federal Trade Commission (FTC) announced a new law-enforcement

initiative that will entail them seriously cracking down on misleading

advertisements for weight-loss products. It's called "Operation Failed Resolution,"

and it's part of the FTC's larger goal to stop deceptive advertising campaigns that

promise consumers easy weight loss.

Operation Failed Resolution is taking legal action against four big companies, all of

which falsely promise easy weight loss in their advertisements. "The claims simply

aren't supported by the evidence," Jessica Rich, the director of the Federal Trade

Commission's Bureau of Consumer Protection, said at the press conference this

morning. "We are not banning the products—we are saying that they can't make

false claims about [them]."

MORE: 5 Celebrity Diets That DON'T Work

Skincare Secrets Your Favorite Celebs Swear By

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WATCH: Skincare Secrets Your Favorite Celebs Swear By

4/10/2021 Feds to Bust Deceptive Weight-Loss Ads

https://www.womenshealthmag.com/weight-loss/a19935515/weight-loss-ads/ 2/3

Here are the four companies the FTC is cracking down on:

Sensa Sensa is a flavored powder that's supposed to cause weight loss when you sprinkle it

on your food—without any change in diet or exercise. The company's advertisements

claim that the powder enhances the smell and taste of your food, making you feel full

faster and therefore eat less. The ads also claim that a scientific study about the

product proves that you can lose up to 30 pounds in six months.

The FTC says that the study was based on fabricated data and was too controlled by

Sensa to be characterized as independent. They are charging Sensa's creator, Alan

Hirsch, with failure to disclose information. As a result, Sensa now owes $26.5

million to the FTC in claims, and the FTC will make that money available to

consumers for refunds.

MORE: Healthy Appetite Suppressant Tricks

L'Occitane The advertisements for two of this company's popular almond skin creams, Almond

Beautiful Shape and Almond Shaping Delight, claim that they are clinically proven

to slim your body. Specifically, they promise to fight cellulite and to trim 1.3 inches

off of users' thighs.

The FTC says that the two studies the claims are based on are flawed, so L'Occitane

now owes $450,000 in claims to the FTC.

MORE: 3 Moves That Blast Cellulite

HCG Diet Direct This company produces liquid homeopathic hCG drops, called hCG Diet Direct

Drops, and promises that they help consumers rapidly lose weight—up to 40 pounds

in 40 days.

However, the FTC says that HCG Diet Direct failed to provide studies that support

such dramatic claims. They also found that the company made other false claims,

including the fact that its diet drops are FDA-approved (they're not).

WATCH: Skincare Secrets Your Favorite Celebs Swear By

4/10/2021 Feds to Bust Deceptive Weight-Loss Ads

https://www.womenshealthmag.com/weight-loss/a19935515/weight-loss-ads/ 3/3

Lean Spa LLC This is a dietary supplement marketing company, and they ran advertisements that

promised people could lose 25 pounds in four weeks by using some of their

products, like Nutrislim, without making any other specific diet or exercise changes.

The FTC charged the company with using fake news websites to promote the

effectiveness of their products and with telling consumers that they could receive

free trials of the products just by paying shipping and handling. If approved, the

settlement requires that Lean Spa pay the FTC up to $7 million in claims.

Hopefully, these moves will encourage companies to stop making false claims about

weight-loss products. You can find out more about Operation Failed Resolution

at the FTC's website.

MORE: The 13 Biggest Fitness Myths

WATCH: Skincare Secrets Your Favorite Celebs Swear By

4/10/2021 Astroturfing: Government shills are flooding the web

https://us.blastingnews.com/opinion/2017/07/astroturfing-government-shills-are-flooding-the-web-001871693.html 1/7

OPINION Blasting News US > Opinion

Astroturfing: Government shills are flooding the web

Cyber warfare via Wikimedia Commons

Online propaganda is real, so is cyber warfare: how the general public is being fed disinformation.

by DM (article) and Milos Kitanovic (video) July 25, 2017 at 12:40 PM

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4/10/2021 Astroturfing: Government shills are flooding the web

https://us.blastingnews.com/opinion/2017/07/astroturfing-government-shills-are-flooding-the-web-001871693.html 2/7

The rapid technological evolution has made the world a different place. Our society has, undoubtedly, evolved along with technology. The internet has changed the way we consume information and the way we live. It has become an integral part of our lives. This has not gone unnoticed by corporations and governments all over the world. They understand the potential of the world wide web, and they are constantly trying to find ways to monopolize the virtual space.

Astroturfing: Definition and examples By definition, astroturfing is "the practice of masking the sponsors of a message or organization to make it appear as though it originates from and is supported by a grassroots participant." In layman's terms, astroturfing is spreading propaganda disguised as public opinion. It's safe to conclude that governments and corporations have always done this through mass media, but the internet has given them a whole new avenue to explore and spread their propaganda.

Reddit, for example, has reduced itself to being nothing but a propaganda tool, for the most part, but social media websites are not immune to so called "shills." The British Army has created a special team of online "warriors," skilled in psychological manipulation, to aid Britain in Cyber Warfare, the Guardian has reported. An army spokesman has officially confirmed this.

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4/10/2021 Astroturfing: Government shills are flooding the web

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Additionally, the Washington Post confirmed that the Obama administration hired a man named Cass Sunstein, famous for writing a Harvard paper that suggests intelligence officials should infiltrate online forums and chat rooms (with an emphasis on "conspiracy theory" communities), to influence discussion and spread propaganda.

President Obama, however, is not the first government official to use new media as a propaganda tool. According to a paper submitted to the Naval War College by USA Army major Angela Maria Lungu, and titled "The internet and psychological operations," both George W. Bush's and Al Gore's campaign teams wanted to use chat rooms and similar platforms for "guided discussions to influence how citizens think about certain topics."

One of Reddit's most popular subreddits, /r/The_Donald can also be considered an echo chamber, a favorite habitat of trolls and Trump shills.

This just shows how there is no difference between the left and the right when it comes to propaganda: regardless of their political stances, politicians will not let anything stand in their way when it comes to engineering narratives and disguising them as public opinion.

What does the future hold? Governments and corporations are always a few steps ahead of the general public.

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4/10/2021 Animal antibiotics | Practical Ethics

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« When the Law Should Ignore Incest Is Darwinian Medicine Good for Us? »

Animal antibiotics

Published April 18, 2012 | By Tom Douglas

Suppose that a despotic political regime is keeping its citizens in cramped and unhygenic labour camps. The survival and and economic productivity of the incarcerated individuals is sustained only through the widespread administration of antibiotics which helps to prevent epidemics. It is difficult for international organisations to do anything about these work camps, but one thing they could do is cut off the supply of antibiotics. This would risk the lives of thousands of inmates in the short term, but can also be expected to put an end to the work- camp system in the longer term, since it would render the camps uneconomic.

Should the international organisations cut-off the supply of antibiotics? It is doubtful whether they should.

But now suppose we replace the work-camps with chicken houses and sow stalls, and the citzens with farm animals. Many farm animals held under cramped and unhygenic conditions are kept alive, and economically productive, only through the widespread administration of antibiotics. Restricting access to these antibiotics would force the agricultural industry to reform these practices. In this case it seems more plausible that antibiotic use should be restricted. At least, this is what Robert S. Lawrence writes in The Atlantic.

Lawrence is writing in response to a recent move by the FDA to tighten up the use of antibiotics in farm animals. There are three broad reasons for giving farm animals antibiotics:

1. to treat infectious diseases

4/10/2021 Animal antibiotics | Practical Ethics

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2. to prevent infectious disease

3. to promote rapid growth

The FDA recently introduced a ‘voluntary restriction’ on the last of these, which has been regarded as the most unacceptable form of agricultural antibiotic use. The motivation for the restriction was a concern about bacterial resistance to antibiotics. This is a growing problem, and may be largely attributable to antibiotic use in animals. In the US, 70% of all antibiotic use occurs in farm animals. Moreover, whereas antibitic regimens used in humans tend to be short and high dose, those used in animals are often low-dose and long-term, making them mor conducive to the development of resistance.

The FDA continues to endorse therapeutic and preventative use of antibiotics, however, and it has come under fire from Lawrence and others for this. Some argue that the FDA restrictions should have been extended to preventative uses as well.

Lawrence argues that there are two main reasons to worry about preventative uses.

First, like growth-promoting regimens, preventative regimens are typically long and low-dose. Thus, they too pose a serious threat of antibiotic resistance.

Second, preventative regimens have largely been used to allow animals to be kept int cramped and unhygenic conditions that increase the exposure of animals to bacteria, and prevent behaviours that normal aid defences against infection. Intensively farmed egg-producing chickens often have as little as 430 square centremetes of ground space each (about 2/3rds of the areas of your computer screen if you’re reading this on a standard 15” laptop) while meat- producing chickens may be kept in overcrowded hen houses on their own manure for their entire 5-6 week lives, often resulting in ammonia burns to their feet. These conditions are clearly bad for animal welfare as well as infection risk, and by endorsing preventative antibiotic use, the FDA is helping to facilitate their continuation. According to Lawrence, the FDA should tighten up on preventative uses of antibiotics as a way of inducing farmers to adopt more animal-friendly practices.

Is there any persuasive response to this last concern?

One argument in defence of the FDA would maintain that it is simply not the FDA’s legally- circumscribed job to look out for animal welfare. Another argument is of a pragmatic kind. Perhaps it would be impossible, or very costly, for the FDA to enforce a ban or ‘voluntary restriction’ on preventative antibiotic use. Lawrence cites evidence that even strict prohibitions are often flaunted by the agricultural industry: the poultry industry allegedly continues to use fluoroquinolone antibiotics despte a ban. Given this, there might seem little hope that a very broad restriction or ban would be respected.

These arguments might perhaps get the FDA off the hook, but they won’t help the US Government as a whole. Animal welfare clearly does lie within the jurisdiction of the US Government. And the US Government probably could enforce a ban on preventative antibiotic use. Is there any good argument for the US Government’s endorsement of preventative antibiotic use.

4/10/2021 Animal antibiotics | Practical Ethics

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One argument would appeal to the work-camp example with which I started this post. Regarding that example, I suspect many would say that the antibiotic supply to the inmates should not be stopped. To interupt the supply of drugs would be to use current inmates as a means to improving the lot of others in the future, and that would be unacceptable. Perhaps it would be unacceptable to interupt the supply of antibiotics to farm animals for the same reasons.

It’s very doubtful, however, whether concerns about the inmates in the work-camp case can be carried over to the case of industrial farming in this way. Sacrificing some people to benefit others is arguably morally unacceptable because people have rights, and sacrificing them violates those rights. But it is doubtful whether animals have rights against being used as a means to benefit others. Moreover, if they do, government institutions should probably ban industrial farming altogether, since the very practice of farming animals uses them as a means. Unlike in the work-camp case, where I assumed that the international organisations could not put an end to the camps directly, the US government (though not the FDA alone) perhaps could put an end to industrial farming practices, and if animals have rights against being used as means, that is presumably what they should do.

One final way of defending the US Government’s endorsement of preventative antibiotic use would be to defend the industrial farming practices that it permits. Some might maintain that the costs of these practices for animals are outweighed by the good that they produce for people. Perhaps if we were to move away from these practices, the costs of producing meat would go up leading to reductions in food supply and/or price rises. This might indirectly contribute to malnutrition among the world’s poorest people.

However, there is some empirical evidence suggesting that this would not happen. In 2000, Denmark introduced strict laws on antiobiotic use in farm animals, and after a short term rise in animal illness and death, the pig farming industry improved the nutrition and housing of pigs. This does not appear to have substantially reduced the supply of pork and indeed Denmark remains the worlds leading pork exporter. Microbe Magazine reports that

Between 1992 and 2008, Danish farmers increased swine production by 47%,maintaining their standing as being among the largest exporters of pork in the world while exporting 90% of pork they produce. During this period, antimicrobial use in swine was reduced by 51%, from 100.4 to 48.9 mg/kg meat.

It is not obvious that the Danish experience could be replicated elsewhere, but it should be reassuring to those concerned about reduction meat supply.

More importantly, though, if the concern is with preserving food supply to the world’s poorest people, it would be best to move away from producing meat altogether and towards more resource-efficient forms of agriculture. It is difficult to defend industrial meat production practices on the grounds that they provide food more efficiently than less intensive farming practices when more efficient means of food supply that do not involve animals at all are available.

 

4/10/2021 Animal antibiotics | Practical Ethics

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Posted in Food and Drink, Health, Public Health, Regulation, Tom Douglas' Posts | Tagged animal ethics, antibiotics, farming

2 Responses to Animal antibiotics

Ben says: April 20, 2012 at 11:34 pm

Tom,

Why is it a violation of rights to “use” the suffering of the current generation to prohibit suffering to the future, but not the converse? (i.e. if we don’t ban antibiotics, then we’re increasing the suffering of future generations to decrease the pain of the current one.)

Tom Douglas says: April 26, 2012 at 5:41 pm

Hi Ben, I think there are few different ways in which one could draw a moral distinction between

the two cases, though I’m not sure any are persuasive. For example, one suggestion might be that if one intervened to stop the antibiotics one would be *causing* present suffering in order to prevent future suffering, whereas one if one allowed the antibiotic supply to continue, one would only be *allowing* future suffering in order to prevent future suffering. Another suggestion would be that if one stopped the antibiotics one of the bad effects of this (the non-treatment of incarcerated individuals) would be a causal intermediary in the production of the good effect (the prevention of future suffering), whereas if one did not stop the antibiotic supply, the resulting bad effect (future suffering) would not be a causal intermediary in the production of the good effect (prevent of current suffering).

Of course you might well dispute the moral significance of these distinctions….

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4/10/2021 Controversial ad that tells women to eat less graces Times Square

https://nypost.com/2018/07/11/controversial-lollipop-ad-goes-up-in-times-square/ 1/2

July 11, 2018 | 1:43pm |

Controversial lollipop ad goes up in Times Square

EVEN TIMES SQUARE IS TELLING WOMEN TO EAT LESS NOW? Have we actually gone mad? Why aren’t there any boys in the ad? Why is it fucking PINK? Because you feel men can look however they want? Their goals are to be successful. But ours are to just be smaller? Fuck off @FlatTummyCo pic.twitter.com/douKKwedxf

— Jameela Jamil (@jameelajamil) July 10, 2018

Giant billboards hawking appetite suppressant lollipops in Times Square have sparked outrage from critics who say the ads are sending a dangerous message to young women.

The flak is over Flat Tummy Co. — a Kim Kardashian-endorsed brand that claims its lollipops, shakes and teas “help control your food intake, cravings and weight.”

“EVEN TIMES SQUARE IS TELLING WOMEN TO EAT LESS NOW? Have we actually gone mad?” British actress Jameela Jamil erupted on Twitter Tuesday. “Why aren’t there any boys in the ad? Why is it f–ing PINK? Because you feel men can look however they want? Their goals are to be successful. But ours are to just be smaller? F— off @FlatTummyCo.”

The massive ad is featured prominently above Mama Sbarro’s restaurant on the corner of Broadway and West 49th Street.

“Got cravings? Girl, tell them to #SUCKIT,” it reads, with a photo of a young woman holding a green and a red lollipop to her mouth.

A smaller billboard touts “1.5 million BABES and counting” and points to the company’s Instagram account.

A candid user called on the Twittersphere to rally behind getting the ad removed.

“Hey Twitter, Let’s use our power for good by guilting @FlatTummyCo into taking down their Times Square billboard advertising appetite suppressants. Love, A former-anorexic teenage girl,” tweeted Sophie Vershbow.

Another woman noted, “FFS. Pink? Lollipop? ‘1.5m Babes and counting’? #suckit? In Times Square? Your success depends on a flat tummy, women of the world! Atrocious.”

The backlash also spilled onto Flat Tummy Co.’s Instagram account.

“How can you say you are empowering girls by telling them not to eat?” wrote @agostinaele on a post promoting a flash saleof the lollipops. “Your entire campaign is aimed at women because women are always told they must be smaller/thinner/less while men can look however they want. YOU are the problem. Anyone working for this company should feel ashamed. You are disgusting.”

The company fired back, “we def aren’t promoting not eating, our pops are designed to help reduce junk food cravings in between meals, to avoid boredom eating. We definitely recommend still eating meals normally. For all the details check out flattummyco.com.”

In May, Kardashian was roasted for pushing the weight-loss candies to her 114 million followers on Instagram.

“#ad You guys… @flattummyco just dropped a new product. They’re Appetite Suppressant Lollipops and they’re literally unreal. They’re giving the first 500 people on their website 15 percent OFF so if you want to get your hands on some…

By Lia Eustachewich

SEE ALSO Kim Kardashian slammed over 'appetite suppressant' lollipops

Updated

4/10/2021 Controversial ad that tells women to eat less graces Times Square

https://nypost.com/2018/07/11/controversial-lollipop-ad-goes-up-in-times-square/ 2/2

you need to do it quick! #suckit,” Kardashian captioned the photo of her sucking on a lollipop.

Jamil, who stars in NBC’s show “The Good Place,” slammed the 37-year-old mom of three as a “toxic influence on young girls.”

“No. F–k off. No. You [are a] terrible and toxic influence on young girls. I admire their mother’s branding capabilities, she is an exploitative but innovative genius, however this family makes me feel actual despair over what women are reduced to,” Jamil tweeted.

“MAYBE don’t take appetite suppressors and eat enough to fuel your BRAIN and work hard and be successful. And to play with your kids. And to have fun with your friends. And to have something to say about your life at the end, other than ‘I had a flat stomach,’” she added.

Flat Tummy Co. couldn’t immediately be reached for comment.

FILED UNDER  ADVERTISING ,  KIM KARDASHIAN ,  TIMES SQUARE ,  W

–– ADVERTISEMENT ––

4/10/2021 FTC Action Puts Deceptive Marketer Out of the Debt Relief Business | Federal Trade Commission

https://www.ftc.gov/news-events/press-releases/2010/12/ftc-action-puts-deceptive-marketer-out-debt-relief-business 1/2

FTC Action Puts Deceptive Marketer Out of the Debt Relief Business December 6, 2010

Must Surrender Funds in Bank Accounts and Sell Property and

Investments

FOR RELEASE

TAGS:

A deceptive advertising operation has been banned from the debt relief business under a settlement agreement with the

Federal Trade Commission. As part of a continuing crackdown on scams that target consumers in financial distress, the

FTC charged the defendants with deceptively claiming they could save consumers thousands of dollars by reducing their

credit card debt.

According to the FTC’s complaint, an operation that did business under the names 800 Credit Card Debt and Debt.com

deceptively claimed they would eliminate or reduce consumers’ debts quickly and put an end to calls from debt collectors.

In ads that ran nationally, they used statements such as, “We’re 800 Credit Card Debt, America’s leader in helping settle

debt . . .

[W]e have programs available to help you eliminate your debt by up to 60%.” The ads allegedly featured phony

testimonials from people posing as the defendants’ customers.

The complaint also alleges that the defendants falsely claimed they provided the debt settlement services they

advertised. In some cases, they also claimed their services were part of a public, non-commercial program, through

statements such as, “The following is a public announcement . . . Americans who are behind on their credit card

payments must take action immediately. If YOU have ten thousand dollars or more in credit card debt, a new relief

program is now available. . .”

In reality, the defendants had no substantiation for their debt elimination or reduction claims, and did not provide debt

settlement services, according to the FTC’s complaint. Instead, the FTC alleged, they merely sold the sales leads

generated by their ads to debt settlement providers, or to other lead generators or lead brokers that re-sold them. The

complaint alleges that the defendants had no information about whether the companies that bought the leads could fulfill

the promises the defendants made in their ads. In fact, the FTC charged that because many of their leads were sold to

other lead generators and lead brokers, the defendants typically did not even know the identity of the debt settlement

providers that ultimately purchased the leads.

Share This Page

Consumer Protection

4/10/2021 FTC Action Puts Deceptive Marketer Out of the Debt Relief Business | Federal Trade Commission

https://www.ftc.gov/news-events/press-releases/2010/12/ftc-action-puts-deceptive-marketer-out-debt-relief-business 2/2

The defendants are Debt.com Marketing, LLC; Media Choice, LLC; 800 Credit Card Debt, LLC; and Stephen Todd Cook.

The settlement order imposes a $28.2 million judgment that will be suspended when the defendants surrender all funds in

their corporate bank accounts, as well as the proceeds from the sale of Cook’s two properties in California, his real estate

in the Virgin Islands, and his ownership interests in two overseas investment funds. The full judgment will be imposed

immediately if the defendants have misrepresented their financial condition.

In addition to banning the defendants from the debt relief business, the settlement order prohibits them from making

unsubstantiated claims about financial related products or services, or misrepresenting material facts about any product

or service. The order also prohibits the defendants from disclosing or otherwise benefitting from customers’ personal

information, and failing to dispose of this information properly.

The FTC recently amended its Telemarketing Sales Rule to require debt relief companies to make certain disclosures and

prohibit them from making false claims or collecting fees before delivering the services they promise. Because the

defendants’ advertisements predated these amendments, the FTC did not allege any violations of the Rule in this case.

The Commission vote to file the complaint and stipulated final order was 5-0. The documents were filed in the U.S.

District Court for the Central District of California.

Click here for more information about settling credit card debts.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe”

that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.

The complaint is not a finding or ruling that the defendants have actually violated the law. Stipulated court orders are for

settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated orders have

the full force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and

to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online

Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a

secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad.

The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File No. 0923040)

(800 Credit Card Debt)

Contact Information MEDIA CONTACT:

Frank Dorman

Office of Public Affairs

202-326-2674

STAFF CONTACT:

Cara Petersen

Bureau of Consumer Protection

202-326-2142

Federal Trade Commission Act Section 5: Unfair or Deceptive Acts or Practices

Background

Section 5(a) of the Federal Trade Commission Act

(FTC Act) (15 USC §45) prohibits “unfair or

deceptive acts or practices in or affecting

commerce.” This prohibition applies to all persons

engaged in commerce, including banks. The

Board has affirmed its authority under section 8 of

the Federal Deposit Insurance Act to take

appropriate action when unfair or deceptive acts

or practices (UDAP) are discovered.

On March 11, 2004, the Board and the Federal

Deposit Insurance Corporation (FDIC) issued a

joint statement (Joint Statement) regarding the

agencies’ responsibilities to enforce the prohibi-

tions against unfair or deceptive trade practices as

they apply to state-chartered banks. The Joint

Statement contains a discussion of managing risks

relating to UDAP and general guidance on mea-

sures that state-chartered banks can take to avoid

engaging in such acts or practices, including best

practices.

Legal Standards

The Joint Statement contained in appendix A of

these procedures gives a complete description of

the legal standards for both unfair and deceptive

practices. The legal standards for unfairness and

deception are independent of each other. Depend-

ing on the facts, a practice may be unfair,

deceptive, or both. The legal standards for UDAP

are briefly described below.

Unfair Practices

An act or practice is unfair where it

• causes or is likely to cause substantial injury to

consumers;

• cannot be reasonably avoided by consumers;

and

• is not outweighed by countervailing benefits to

consumers or to competition.

Public policy, as established by statute, regula-

tion, or judicial decisions may be considered with

all other evidence in determining whether an act or

practice is unfair.

Deceptive Practices

An act or practice is deceptive where

• a representation, omission, or practice misleads

or is likely to mislead the consumer;

• a consumer’s interpretation of the representation,

omission, or practice is considered reasonable

under the circumstances; and

• the misleading representation, omission, or prac-

tice is material.

Relationship of UDAP to Other Laws and Ratings

Some acts or practices may violate both section 5

of the FTC Act and other federal or state laws.

Other acts and practices may violate only the FTC

Act while fully complying with other consumer

protection laws and regulations. Therefore, if a

potential UDAP violation is found, examiners

should consider whether other statutory or regula-

tory violations have occurred. The Joint Statement

specifies laws that warrant particular attention in

this regard (see appendix A of these procedures).

Furthermore, when illegal credit practices are

identified through a review of UDAP compliance,

examiners should consider whether the illegal

practices adversely affect the Community Reinvest-

ment Act rating of the institution pursuant to the

regulatory requirements of 12 CFR 228.28(c).

Compliance Risk Evaluation

UDAP violations can present significant legal,

reputational, and compliance risks for banks.

These risks highlight the need for examiners to

assess compliance with section 5 of the FTC Act in

conjunction with consumer compliance examina-

tions, other related supervisory activities, and

consumer complaint investigations. Consistent with

the Board’s risk-focused consumer compliance

supervision program, compliance with section 5 of

the FTC Act should be considered when develop-

ing risk assessments, scoping an examination, or

when investigating a consumer complaint.

A determination of whether a particular act or

practice is unfair or deceptive will depend on an

analysis of the facts and circumstances. Although

individual violations or complaints may appear

isolated, when considered in the context of

additional information including other violations or

complaints, they may raise potential UDAP con-

cerns.

Consumer Compliance Handbook FTC Act • 1 (12/16)

Furthermore, the prohibition against UDAP not

only applies to all products and services offered by

banks, but to every stage and activity, from product

development to the creation and rollout of market-

ing campaigns, and to servicing and collections.

Therefore, particular focus should be paid to new

or modified systems or products and third-party

arrangements.

Section 5 of the FTC Act:

2 (12/16) • FTC Act Consumer Compliance Handbook

Federal Trade Commission Act—Section 5

Examination Objectives and Procedures

EXAMINATION OBJECTIVES

• To determine the adequacy of the bank’s internal

procedures, policies, and controls to ensure

consistent compliance with section 5 of the FTC

Act.

• To determine if the bank complies with section 5

of the FTC Act, which prohibits unfair and

deceptive acts or practices.

EXAMINATION PROCEDURES

In order to fulfill the examination objectives stated

above, and consistent with the Joint Statement,

examiners should identify the bank’s internal

policies, procedures, and controls to be reviewed

for UDAP compliance. In particular, the bank’s

compliance management systems; advertising

and promotional materials; initial and subsequent

disclosures; servicing and collections; and man-

agement and monitoring of employees and third

parties should be reviewed as they relate to the

products and services identified as potential

areas of concern.

Examiners also should use these procedures in

conjunction with the guidance and best practices

contained in the Joint Statement to determine

whether an unfair or deceptive act or practice has

occurred. Specifically, examiners should, as appro-

priate

• review previous examinations reports, including

consumer compliance, and safety and sound-

ness examination reports;

• review current and prior examination findings

regarding the institution’s involvement in acts or

practices that violate or may violate section 5 of

the FTC Act;

• review the bank’s policies, procedures, and

internal controls;

• review a sample of consumer complaints, adver-

tisements and promotional materials, disclo-

sures, customer agreements, and third-party

contracts and instructions;

• interview management and staff about the bank’s

acts and practices; and

• discuss any examiner concerns with bank man-

agement.

Evaluating Compliance Management Programs

A bank’s compliance management program should

focus on the avoidance of acts or practices that are

unfair or deceptive and on the prompt correction of

any such identified acts of practices. The degree of

specificity with which a compliance management

program should address this area will vary

depending on the bank’s size, complexity and

product offerings. A small bank that offers a limited

number of products through a few branches may

not need the kind of specific, documented

compliance program needed in a bank engaged

in, for example, nationwide mortgage or credit card

lending.

Items to Evaluate

1. Determine whether the bank’s policies and

procedures include guidance on preventing

unfair or deceptive acts or practices.

2. Ascertain whether the bank reviews its practices

in the context of federal regulations, policies,

and decisions on unfair or deceptive acts or

practices.

3. Ascertain whether the bank’s compliance man-

agement function looks beyond the identification

of individual violations to determine if its prac-

tices may be unfair or deceptive.

4. Determine whether the bank trains its employees

on the provisions of the FTC Act that prohibit

UDAP.

5. Determine whether the bank reviews consumer

complaints to identify potential compliance prob-

lems and negative trends that have the potential

to be unfair or deceptive. Determine whether the

bank reviews concentrations of complaints about

the same product or about bank conduct in

order to identify potential areas of concern.

6. Determine whether the bank has identified any

potentially unfair or deceptive acts or practices,

and if so, verify that it corrected the identified

concerns and provided restitution to affected

persons when appropriate.

7. If the bank has identified potentially unfair or

deceptive acts or practices, determine if it has

implemented changes to prevent future recur-

rences.

Consumer Compliance Handbook FTC Act • 3 (12/16)

8. Determine whether the bank clearly discloses a

telephone number or mailing address (and

e-mail address or website if applicable) that

consumers may use to contact the bank or its

third-party servicers regarding any complaints

or inquiries they may have.

9. Determine whether the bank’s management is

involved in both the development of new prod-

ucts and services and in decisions to change

the terms of or reprice existing products and

services.

Evaluating Advertising and Promotional Materials

Due to the increasing complexity of certain

products, particularly mortgage loans and credit

cards, a bank’s advertising and promotional

materials1 should be presented in a clear,

balanced, and timely manner, with special atten-

tion paid to products targeted toward the elderly,

financially vulnerable, or financially unsophisti-

cated. Advertising and promotional materials

should present not only the benefits of the

products and services, but also any potential

risks, such as payment shock or negative

amortization. When a bank’s business is largely

driven by product marketing and promotion, it

should exercise particular caution to avoid poten-

tial UDAP.

Items to Evaluate

1. Determine whether the bank reviews all adver-

tisements, promotional materials, and market-

ing scripts to ensure that there is a reasonable

factual basis for all representations made.

2. Determine whether the bank reviews all adver-

tisements, promotional materials, and market-

ing scripts to ensure that these materials do not

use fine print, separate statements, or incon-

spicuous disclosures to correct potentially

misleading headlines.

3. Determine whether the bank tailors advertise-

ments, promotional materials, and marketing

scripts to take into account the sophistication

and experience of the target audience, includ-

ing the elderly and financially vulnerable.

4. In advertisements, promotional materials, mar-

keting scripts, and recorded telephone conver-

sations, determine whether the bank (or its

third-party servicer) makes claims, representa-

tions, or statements that may mislead members

of the target audience about the cost, value,

availability, cost savings, benefits, or terms of

the product or service.

5. Determine whether the bank reviews all adver-

tisements, promotional materials, and market-

ing scripts to ensure that they fairly and

adequately describe the terms, benefits, and

material limitations of the product or service

being offered, including any related or optional

products or services, and that they do not

misrepresent such terms either affirmatively or

by omission.

6. Determine whether the bank avoids advertising

that a particular service or benefit will be

provided in connection with an account if the

bank does not intend or is not able to provide

the service or benefit to account holders.

7. Determine whether the bank draws the atten-

tion of customers to key terms, including

limitations and conditions that are important in

enabling customers to make informed deci-

sions about whether the product or service

meets their needs.

8. When using terms such as ″pre-approved,″

“guaranteed,” or “fixed rates,” determine

whether the bank clearly discloses any limita-

tions, conditions, or restrictions on the offer.

9. Determine whether the bank ensures that costs

and benefits of related or optional products

and services, such as overdraft protection, are

clearly explained and not misrepresented or

presented in an incomplete or overly complex

manner.

10. Determine whether the bank avoids advertising

terms that are not available to most customers,

and avoids using unrepresentative examples in

advertising, marketing, and promotional mate-

rials.

11. Determine whether the bank reviews its web-

site content and navigational process to ensure

that the consumer is able to readily obtain the

necessary disclosures for its products.

12. Determine whether the bank reviews its adver-

tising and promotional materials to avoid rais-

ing UDAP concerns.

Evaluating Initial and Subsequent Disclosures

A bank’s disclosures with respect to initial terms

and conditions, repricing, and changes in terms

should be clear and accurate. The terms and

conditions of many credit and deposit products are

variable and may change periodically based on

external variables, such as changes in the prime

rate. Many credit card products have terms that

may change or increase automatically following a

1. Advertising and promotional materials include print and electronic materials, as well as scripts used for radio, Internet, or television advertising and telemarketing.

Section 5: Examination Objectives and Procedures

4 (12/16) • FTC Act Consumer Compliance Handbook

specific event, such as an interest rate increase

triggered by a consumer’s delinquency with the

creditor or another creditor. The disclosures for

products with variable terms and conditions such

as these should be clearly presented.

Items to Evaluate

1. Determine whether the bank reviews all cus-

tomer agreements and disclosures to ensure

that there is a reasonable factual basis for all

representations made.

2. Determine whether the bank’s customer agree-

ments and disclosures fairly and adequately

describe the terms, benefits, and material limi-

tations or conditions of the product or service

being offered. Limitations may include such

things as: a special interest rate that applies only

to balance transfers, an expiration date for terms

that apply only during an introductory period, or

a prerequisite for obtaining particular terms

(such as minimum transaction amounts, intro-

ductory or other fees, or other qualifications).

Conditions may include the ability to cancel

without charge a service that was offered on a

free trial basis.

3. Determine whether the bank’s disclosures make

claims, representations, or statements that may

mislead members of the target audience about

the cost, value, availability, cost savings, ben-

efits, or terms of the product or service.

4. Determine whether the bank informs consumers

in a clear and timely manner about any fees,

penalties, or other charges (including charges

for any force-placed products) that have been

imposed, and the reasons for their imposition.

5. Determine whether the bank clearly discloses

that optional or related products and services

that are offered simultaneously with credit-such

as insurance, travel services, credit protection,

and consumer report update services-are not

required to obtain credit or are not considered in

decisions to grant credit.

6. When making claims about amounts of credit

available to consumers, determine whether the

bank accurately and completely represents the

amount of potential, approved, or useable credit

that the consumer will receive.

7. Determine whether the bank clearly informs a

consumer when the account terms approved for

the consumer are less favorable than the terms

advertised or previously disclosed.

8. If the bank reserves the right to change the

terms of an account or product, determine

whether the bank’s customer agreements clearly

disclose that the bank can make future changes

to the rate, terms, and conditions otherwise

specified in any agreement signed by or given to

the consumer. Determine whether the circum-

stances under which such changes may be

made are clearly explained.

Evaluating Servicing and Collections

Servicing and collection activities can present a

higher risk of potential UDAP violations because

they are often conducted by bank subsidiaries,

affiliates or third-party vendors and servicers. Thus,

a bank should ensure that its disclosures of

servicing and collections activities are accurate

and not misleading and that those activities are

conducted fairly and in consonance with any

disclosures or agreements. For example, state-

ments should clearly indicate when payments are

due before any penalties are incurred.

Items to Evaluate

1. Determine whether the bank ensures that its

employees and third-party servicers have, and

follow, procedures to credit consumer payments

in a timely manner.

2. Determine whether consumers are clearly told

when and if monthly payments are applied to

fees, penalties, or other charges before being

applied to regular principal and interest.

3. Determine whether account statements clearly

disclose how fees, penalties, other charges, and

interest and principal payments affect the ac-

count balance and whether they have been

calculated in accordance with any written agree-

ments with the borrower.

Monitoring the Conduct of Employees and Third Parties

A bank should have effective risk and monitoring

controls for hiring personnel and contracting and

maintaining relationships with third parties. The

controls should establish responsibilities with third

parties for training and monitoring of staff. In

addition, the controls should foster a bank’s ability

to monitor whether actual practices by its employ-

ees and third-party contractors are consistent with

the bank’s policies and procedures, applicable

laws and regulations, and third-party agreements.

In addition, a bank’s monitoring should include a

review of training and promotional materials used

not only by its employees but also by third parties,

to ensure that any UDAP concerns are identified

early.

Items to Evaluate

1. Determine whether, through its third-party agree-

ments and internal policies, the bank has

effective risk and monitoring controls for select-

Section 5: Examination Objectives and Procedures

Consumer Compliance Handbook FTC Act • 5 (12/16)

ing and managing third-party contractors. Such

agreements and policies should outline the

degree of monitoring, acceptable error rates,

and corrective action provisions for noncompli-

ance. They also should identify issues that would

need to be escalated to bank management.

2. Determine whether a bank’s compensation pro-

grams for employees and third-party contractors

provide incentives for acts or practices that

could raise potential concerns, such as compen-

sation programs that steer consumers to particu-

lar products to the exclusion of other, potentially

beneficial products.

3. Determine whether the bank monitors the train-

ing of employees and third parties who market or

promote bank products or service loans to

ensure that they are adequately trained to avoid

making statements or taking actions that might

be unfair or deceptive. Monitoring should in-

clude a review of training and promotional

materials, including telemarketing scripts.

4. Determine whether the bank reviews a third

party’s primary interface with consumers, such

as reviewing recorded telephone calls or tran-

scripts of online communication.

Section 5: Examination Objectives and Procedures

6 (12/16) • FTC Act Consumer Compliance Handbook

Federal Trade Commission Act—Section 5

Appendix: Statement on Unfair or Deceptive Acts or Practices by State-Chartered Banks

The following statement was issued jointly by the

Board of Governors of the Federal Reserve System

and the Federal Deposit Insurance Corporation on

March 11, 2004.

Purpose

The Board of Governors of the Federal Reserve

System and the Federal Deposit Insurance Corpo-

ration (the “Board” and the “FDIC,” or collectively,

the “Agencies”) are issuing this statement to outline

the standards that will be considered by the

Agencies as they carry out their responsibility to

enforce the prohibitions against unfair or deceptive

trade practices found in section 5 of the Federal

Trade Commission Act (“FTC Act”)2 as they apply

to acts and practices of state-chartered banks. The

Agencies will apply these standards when weigh-

ing the need to take supervisory and enforcement

actions and when seeking to ensure that unfair or

deceptive practices do not recur.

This statement also contains a section on

managing risks relating to unfair or deceptive acts

or practices, which includes best practices as well

as general guidance on measures that state-

chartered banks can take to avoid engaging in

such acts or practices.

Although the majority of insured banks adhere to

a high level of professional conduct, banks must

remain vigilant against possible unfair or deceptive

acts or practices both to protect consumers and to

minimize their own risks.

Coordination of Enforcement Efforts

Section 5(a) of the FTC Act prohibits “unfair or

deceptive acts or practices in or affecting com-

merce,”3 and applies to all persons engaged in

commerce, including banks. The Agencies each

have affirmed their authority under section 8 of the

Federal Deposit Insurance Act to take appropriate

action when unfair or deceptive acts or practices

are discovered.4

A number of agencies have authority to combat

unfair or deceptive acts or practices. For ex-

ample, the FTC has broad authority to enforce the

requirements of section 5 of the FTC Act against

many non-bank entities.5 In addition, state authori-

ties have primary responsibility for enforcing state

statutes against unfair or deceptive acts or

practices. The Agencies intend to work with these

other regulators as appropriate in investigating

and responding to allegations of unfair or

deceptive acts or practices that involve state

banks and other entities supervised by the

Agencies.

Standards for Determining What is Unfair or Deceptive

The FTC Act prohibits unfair or deceptive acts or

practices. Congress drafted this provision broadly

in order to provide sufficient flexibility in the law to

address changes in the market and unfair or

deceptive practices that may emerge.6

An act or practice may be found to be unfair

where it “causes or is likely to cause substantial

injury to consumers which is not reasonably

avoidable by consumers themselves and not

outweighed by countervailing benefits to consum-

ers or to competition.”7 A representation, omission,

or practice is deceptive if it is likely to mislead a

consumer acting reasonably under the circum-

stances and is likely to affect a consumer’s conduct

or decision regarding a product or service.

The standards for unfairness and deception are

independent of each other. While a specific act or

practice may be both unfair and deceptive, an act

or practice is prohibited by the FTC Act if it is

either unfair or deceptive. Whether an act or

practice is unfair or deceptive will in each

instance depend upon a careful analysis of the

facts and circumstances. In analyzing a particular

act or practice, the Agencies will be guided by

the body of law and official interpretations for

defining unfair or deceptive acts or practices

developed by the courts and the FTC. The

Agencies will also consider factually similar cases

brought by the FTC and other agencies to ensure

that these standards are applied consistently.

Unfair Acts or Practices

Assessing whether an act or practice is unfair

An act or practice is unfair where it (1) causes or is

likely to cause substantial injury to consumers,

(2) cannot be reasonably avoided by consumers,2. 15 USC § 45. 3. 15 USC § 45(a). 4. 12 USC § 1818(b)(1), (e)(1), and (i)(2). See letter from

Chairman Greenspan to the Hon. John J. LaFalce (May 30, 2002); and “Unfair or Deceptive Acts or Practices: Applicability of the Federal Trade Commission Act,” FIL 57-2002 (May 30, 2002).

5. 15 USC § 45(a)(2) and Gramm-Leach-Bliley Act § 133, pub¬lished in notes to 15 USC § 41.

6. See FTC Policy Statement on Unfairness (December 17, 1980); and FTC Policy Statement on Deception (October 14, 1983).

7. This standard was first issued as a policy by the FTC and later codified into the FTC Act as 15USC § 45(n).

Consumer Compliance Handbook FTC Act • 7 (12/16)

and (3) is not outweighed by countervailing ben-

efits to consumers or to competition. Public policy

may also be considered in the analysis of whether

a particular act or practice is unfair. Each of these

elements is discussed further below.

• The act or practice must cause or be likely to

cause substantial injury to consumers.

To be unfair, an act or practice must cause or be

likely to cause substantial injury to consumers.

Substantial injury usually involves monetary harm.

An act or practice that causes a small amount of

harm to a large number of people may be deemed

to cause substantial injury. An injury may be

substantial if it raises a significant risk of concrete

harm. Trivial or merely speculative harms are

typically insufficient for a finding of substantial

injury. Emotional impact and other more subjective

types of harm will not ordinarily make a practice

unfair.

• Consumers must not reasonably be able to avoid

the injury.

A practice is not considered unfair if consumers

may reasonably avoid injury. Consumers cannot

reasonably avoid injury from an act or practice if it

interferes with their ability to effectively make

decisions. Withholding material price information

until after the consumer has committed to purchase

the product or service would be an example of

preventing a consumer from making an informed

decision. A practice may also be unfair where

consumers are subject to undue influence or are

coerced into purchasing unwanted products or

services.

The Agencies will not second-guess the wisdom

of particular consumer decisions. Instead, the

Agencies will consider whether a bank’s behavior

unreasonably creates or takes advantage of an

obstacle to the free exercise of consumer decision-

making.

• The injury must not be outweighed by counter-

vailing benefits to consumers or to competition.

To be unfair, the act or practice must be injurious

in its net effects—that is, the injury must not be

outweighed by any offsetting consumer or competi-

tive benefits that are also produced by the act or

practice. Offsetting benefits may include lower

prices or a wider availability of products and

services.

Costs that would be incurred for remedies or

measures to prevent the injury are also taken into

account in determining whether an act or practice

is unfair. These costs may include the costs to the

bank in taking preventive measures and the costs

to society as a whole of any increased burden and

similar matters.

• Public policy may be considered.

Public policy, as established by statute, regula-

tion, or judicial decisions may be considered with

all other evidence in determining whether an act or

practice is unfair. For example, the fact that a

particular lending practice violates a state law or a

banking regulation may be considered as evidence

in determining whether the act or practice is unfair.

Conversely, the fact that a particular practice is

affirmatively allowed by statute may be considered

as evidence that the practice is not unfair. Public

policy considerations by themselves, however, will

not serve as the primary basis for determining that

an act or practice is unfair.

Deceptive Acts and Practices

Assessing whether an act or practice is deceptive

A three-part test is used to determine whether a

representation, omission, or practice is “decep-

tive.” First, the representation, omission, or practice

must mislead or be likely to mislead the consumer.

Second, the consumer’s interpretation of the repre-

sentation, omission, or practice must be reason-

able under the circumstances. Lastly, the mislead-

ing representation, omission, or practice must be

material. Each of these elements is discussed

below in greater detail.

• There must be a representation, omission, or

practice that misleads or is likely to mislead the

consumer.

An act or practice may be found to be deceptive

if there is a representation, omission, or practice

that misleads or is likely to mislead the consumer.

Deception is not limited to situations in which a

consumer has already been misled. Instead, an act

or practice may be found to be deceptive if it is

likely to mislead consumers. A representation may

be in the form of express or implied claims or

promises and may be written or oral. Omission of

information may be deceptive if disclosure of the

omitted information is necessary to prevent a

consumer from being misled.

In determining whether an individual statement,

representation, or omission is misleading, the

statement, representation, or omission will not be

evaluated in isolation. The Agencies will evaluate it

in the context of the entire advertisement, transac-

tion, or course of dealing to determine whether it

constitutes deception. Acts or practices that have

the potential to be deceptive include: making

misleading cost or price claims; using bait-and-

switch techniques; offering to provide a product or

service that is not in fact available; omitting material

limitations or conditions from an offer; selling a

product unfit for the purposes for which it is sold;

and failing to provide promised services.

Section 5: Appendix: Statement on Unfair or Deceptive Acts or Practices by State-Chartered Banks

8 (12/16) • FTC Act Consumer Compliance Handbook

• The act or practice must be considered from the

perspective of the reasonable consumer.

In determining whether an act or practice is

misleading, the consumer’s interpretation of or

reaction to the representation, omission, or practice

must be reasonable under the circumstances. The

test is whether the consumer’s expectations or

interpretation are reasonable in light of the claims

made. When representations or marketing prac-

tices are targeted to a specific audience, such as

the elderly or the financially unsophisticated, the

standard is based upon the effects of the act or

practice on a reasonable member of that group.

If a representation conveys two or more mean-

ings to reasonable consumers and one meaning is

misleading, the representation may be deceptive.

Moreover, a consumer’s interpretation or reaction

may indicate that an act or practice is deceptive

under the circumstances, even if the consumer’s

interpretation is not shared by a majority of the

consumers in the relevant class, so long as a

significant minority of such consumers is misled.

In evaluating whether a representation, omission

or practice is deceptive, the Agencies will look at

the entire advertisement, transaction, or course of

dealing to determine how a reasonable consumer

would respond. Written disclosures may be insuffi-

cient to correct a misleading statement or repre-

sentation, particularly where the consumer is

directed away from qualifying limitations in the text

or is counseled that reading the disclosures is

unnecessary. Likewise, oral disclosures or fine

print may be insufficient to cure a misleading

headline or prominent written representation.

• The representation, omission, or practice must

be material.

A representation, omission, or practice is mate-

rial if it is likely to affect a consumer’s decision

regarding a product or service. In general, informa-

tion about costs, benefits, or restrictions on the use

or availability of a product or service is material.

When express claims are made with respect to a

financial product or service, the claims will be

presumed to be material. Similarly, the materiality

of an implied claim will be presumed when it is

demonstrated that the institution intended that the

consumer draw certain conclusions based upon

the claim.

Claims made with the knowledge that they are

false will also be presumed to be material.

Omissions will be presumed to be material when

the financial institution knew or should have known

that the consumer needed the omitted information

to evaluate the product or service.

Relationship to Other Laws

Acts or practices that are unfair or deceptive within

the meaning of section 5 of the FTC Act may also

violate other federal or state statutes. On the other

hand, there may be circumstances in which an act

or practice violates section 5 of the FTC Act even

though the institution is in technical compliance

with other applicable laws, such as consumer

protection and fair lending laws. Banks should be

mindful of both possibilities. The following laws

warrant particular attention in this regard:

Truth in Lending and Truth in Savings Acts

Pursuant to the Truth in Lending Act (TILA),

creditors must “clearly and conspicuously” dis-

close the costs and terms of credit.8 The Truth in

Savings Act (TISA) requires depository institutions

to provide interest and fee disclosures for deposit

accounts so that consumers may compare deposit

products.9 TISA also provides that advertisements

shall not be misleading or inaccurate, and cannot

misrepresent an institution’s deposit contract. An

act or practice that does not comply with these

provisions of TILA or TISA may also violate the FTC

Act. On the other hand, a transaction that is in

technical compliance with TILA or TISA may

nevertheless violate the FTC Act. For example,

consumers could be misled by advertisements of

“guaranteed” or “lifetime” interest rates when the

creditor or depository institution intends to change

the rates, whether or not the disclosures satisfy the

technical requirements of TILA or TISA.

Equal Credit Opportunity and Fair Housing Acts

The Equal Credit Opportunity Act (ECOA) prohibits

discrimination in any aspect of a credit transaction

against persons on the basis of race, color,

religion, national origin, sex, marital status, age

(provided the applicant has the capacity to con-

tract), the fact that an applicant’s income derives

from any public assistance program, and the fact

that the applicant has in good faith exercised any

right under the Consumer Credit Protection Act.

Similarly, the Fair Housing Act (FHA) prohibits

creditors involved in residential real estate transac-

tions from discriminating against any person on the

basis of race, color, religion, sex, handicap, familial

status, or national origin. Unfair or deceptive

practices that target or have a disparate impact on

consumers who are members of these protected

classes may violate the ECOA or the FHA, as well

as the FTC Act.

8. 15 USC § 1632(a). 9. 12 USC § 4301 et seq.

Section 5: Appendix: Statement on Unfair or Deceptive Acts or Practices by State-Chartered Banks

Consumer Compliance Handbook FTC Act • 9 (12/16)

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act prohibits

unfair, deceptive, and abusive practices related to

the collection of consumer debts. Although this

statute does not by its terms apply to banks that

collect their own debts, failure to adhere to the

standards set by this Act may support a claim of

unfair or deceptive practices in violation of the FTC

Act. Moreover, banks that either affirmatively or

through lack of oversight, permit a third-party debt

collector acting on their behalf to engage in

deception, harassment, or threats in the collection

of monies due may be exposed to liability for

approving or assisting in an unfair or deceptive act

or practice.

Managing Risks Related to Unfair or Deceptive Acts or Practices

Since the release of the FDIC’s statement and the

Board’s letter on unfair and deceptive practices in

May 2002, bankers have asked for guidance on

strategies for managing risk in this area. This

section outlines guidance on best practices to

address some areas with the greatest potential for

unfair or deceptive acts and practices, including:

advertising and solicitation; servicing and collec-

tions; and the management and monitoring of

employees and third-party service providers. Banks

also should monitor compliance with their own

policies in these areas, and should have proce-

dures for receiving and addressing consumer

complaints and monitoring activities performed by

third parties on behalf of the bank.

To avoid engaging in unfair or deceptive activity,

the Agencies encourage use of the following

practices, which have already been adopted by

many institutions:

Review all promotional materials, marketing

scripts, and customer agreements and disclosures

to ensure that they fairly and adequately describe

the terms, benefits, and material limitations of the

product or service being offered, including any

related or optional products or services, and that

they do not misrepresent such terms either affirma-

tively or by omission. Ensure that these materials

do not use fine print, separate statements or

inconspicuous disclosures to correct potentially

misleading headlines, and ensure that there is a

reasonable factual basis for all representations

made.

Draw the attention of customers to key terms,

including limitations and conditions, that are impor-

tant in enabling the customer to make an informed

decision regarding whether the product or service

meets the customer’s needs.

Clearly disclose all material limitations or condi-

tions on the terms or availability of products or

services, such as a limitation that applies a special

interest rate only to balance transfers; the expira-

tion date for terms that apply only during an

introductory period; material prerequisites for ob-

taining particular products, services or terms (e.g.,

minimum transaction amounts, introductory or other

fees, or other qualifications); or conditions for

canceling a service without charge when the

service is offered on a free trial basis.

Inform consumers in a clear and timely manner

about any fees, penalties, or other charges (includ-

ing charges for any force-placed products) that

have been imposed, and the reasons for their

imposition.

Clearly inform customers of contract provisions

that permit a change in the terms and conditions of

an agreement.

When using terms such as “pre-approved” or

“guaranteed,” clearly disclose any limitations, con-

ditions, or restrictions on the offer.

Clearly inform consumers when the account

terms approved by the bank for the consumer are

less favorable than the advertised terms or terms

previously disclosed.

Tailor advertisements, promotional materials, dis-

closures and scripts to take account of the

sophistication and experience of the target audi-

ence. Do not make claims, representations or

statements that mislead members of the target

audience about the cost, value, availability, cost

savings, benefits, or terms of the product or

service.

Avoid advertising that a particular service will be

provided in connection with an account if the bank

does not intend or is not able to provide the service

to accountholders.

Clearly disclose when optional products and

services—such as insurance, travel services, credit

protection, and consumer report update services

that are offered simultaneously with credit—are not

required to obtain credit or considered in decisions

to grant credit.

Ensure that costs and benefits of optional or

related products and services are not misrepre-

sented or presented in an incomplete manner.

When making claims about amounts of credit

available to consumers, accurately and completely

represent the amount of potential, approved, or

useable credit that the consumer will receive.

Avoid advertising terms that are not available to

most customers and using unrepresentative ex-

amples in advertising, marketing, and promotional

materials.

Avoid making representations to consumers that

Section 5: Appendix: Statement on Unfair or Deceptive Acts or Practices by State-Chartered Banks

10 (12/16) • FTC Act Consumer Compliance Handbook

they may pay less than the minimum amount due

required by the account terms without adequately

disclosing any late fees, overlimit fees, or other

account fees that will result from the consumer

paying such reduced amount.

Clearly disclose a telephone number or mailing

address (and, as an addition, an email or website

address if available) that consumers may use to

contact the bank or its third-party servicers regard-

ing any complaints they may have, and maintain

appropriate procedures for resolving complaints.

Consumer complaints should also be reviewed by

banks to identify practices that have the potential to

be misleading to customers.

Implement and maintain effective risk and super-

visory controls to select and manage third-party

servicers.

Ensure that employees and third parties who

market or promote bank products, or service loans,

are adequately trained to avoid making statements

or taking actions that might be unfair or deceptive.

Review compensation arrangements for bank

employees as well as third-party vendors and

servicers to ensure that they do not create

unintended incentives to engage in unfair or

deceptive practices.

Ensure that the institution and its third party

servicers have and follow procedures to credit

consumer payments in a timely manner. Consum-

ers should be clearly told when and if monthly

payments are applied to fees, penalties, or other

charges before being applied to regular principal

and interest.

The need for clear and accurate disclosures that

are sensitive to the sophistication of the target

audience is heightened for products and services

that have been associated with abusive practices.

Accordingly, banks should take particular care in

marketing credit and other products and services

to the elderly, the financially vulnerable, and

customers who are not financially sophisticated. In

addition, creditors should pay particular attention

to ensure that disclosures are clear and accurate

with respect to: the points and other charges that

will be financed as part of home-secured loans; the

terms and conditions related to insurance offered in

connection with loans; loans covered by the Home

Ownership and Equity Protection Act; reverse

mortgages; credit cards designed to rehabilitate

the credit position of the cardholder; and loans with

pre-payment penalties, temporary introductory

terms, or terms that are not available as advertised

to all consumers.

Conclusion

The development and implementation of policies

and procedures in these areas and the other steps

outlined above will help banks assure that products

and services are provided in a manner that is fair,

allows informed customer choice, and is consistent

with the FTC Act.

Section 5: Appendix: Statement on Unfair or Deceptive Acts or Practices by State-Chartered Banks

Consumer Compliance Handbook FTC Act • 11 (12/16)

4/10/2021 E-Cigarette Ads Target Millions of Kids, CDC Says

https://www.nbcnews.com/health/kids-health/e-cigarette-ads-target-millions-kids-cdc-says-n490601 1/3

By Maggie Fox E-cigarette makers are pouring tens of millions of dollars into advertising their wares — and teenagers are getting the message loud and clear, federal health officials reported Tuesday.

As advertising skyrockets, so do the number of teens seeing it. They’re vaping by the millions now, the Centers for Disease Control and Prevention reports. The CDC says that trend threatens to derail decades of progress in helping prevent kids from taking up smoking.

“The same advertising tactics the tobacco industry used years ago to get kids addicted to nicotine are now being used to entice a new generation of young people to use e-cigarettes,” said CDC director Dr. Tom Frieden.

Inside the Vaper's Den: E-Cigarette Salvation and New Dangers

“What’s happening is widespread marketing of e-cigarettes that kids are seeing,” Frieden told reporters in a telephone briefing.

A customer smokes an E-Cigarette at Digita Ciggz on January 28, 2015 in San Rafael, California. The California Department of Public Health released a report today that calls E-Cigarettes a health threat and suggests that they should be regulated like regular cigarettes and tobacco products. Justin Sullivan / Getty Images

E-Cigarette Ads Target Millions of Kids, CDC Says Makers of e-cigarettes are reaching millions of teenagers with their ads, the CDC says.

Jan. 5, 2016, 12:58 PM EST / Updated Jan. 5, 2016, 12:58 PM EST

4/10/2021 E-Cigarette Ads Target Millions of Kids, CDC Says

https://www.nbcnews.com/health/kids-health/e-cigarette-ads-target-millions-kids-cdc-says-n490601 2/3

“Kids should not be using e-cigarettes and yet 2/3 of kids in this country are seeing e-cigarette ads.”

CDC researchers used a 2014 survey of 22,000 children and teens to find that 68.9 percent of middle and high school students — more than 18 million kids — see e-cigarette ads. More than half see them advertised in stores, 40 percent online and 36 percent on TV or in movies.

“During 2011 to 2014, current e-cigarette use among high school students soared from 1.5 percent to 13.4 percent, and among middle school students from 0.6 percent to 3.9 percent,” the CDC said in a statement. "At the same time, spending on e-cigarette ads rose from $6.4 million to $115 million.”

Advocates said the industry must be stopped from advertising to children.

“The irresponsible and indiscriminate marketing by the e-cigarette industry, coupled with a complete lack of government oversight, is putting the health of our nation’s kids at risk,” said Matthew Myers, president of the Campaign for Tobacco-Free Kids.

“It shouldn’t be a surprise that youth use of e-cigarettes has skyrocketed when kids are being inundated with marketing for these products.”

Frieden said the tactics are effective, and include online “viral” marketing that cannot even be measured.

“E-cigarette ads use many of the same themes — independence, rebellion, and sex — used to sell cigarettes and other conventional tobacco products,” the CDC report said.

“It shouldn’t be a surprise that youth use of e-cigarettes has skyrocketed when kids are being inundated with marketing for these products.”

E-cigarette use among youth is rising CDC

4/10/2021 E-Cigarette Ads Target Millions of Kids, CDC Says

https://www.nbcnews.com/health/kids-health/e-cigarette-ads-target-millions-kids-cdc-says-n490601 3/3

There’s also a widespread belief that e-cigarettes are safe, or at least safer than conventional tobacco products. But several studies have suggested this may not be the case.

“E-cigarettes typically deliver nicotine derived from tobacco, which is highly addictive, might harm brain develop ment, and could lead to sustained tobacco product use among youths,” the CDC said.

Late last year a team at the Harvard School of Public Health found many e-cigarette flavors deliver harmful chemicals, including diacetyl, the chemical blamed for causing "popcorn lung" in workers at microwave popcorn packaging plants. Other teams found formaldehyde, which is known to cause cancer.

The U.S. Food and Drug Administration in 2014 proposed asserting its authority over new tobacco products including e-cigarettes, cigars, pipe tobacco and nicotine gels. The White House is reviewing final proposed regulations for it to do that.

Recommended

Supporters and some researchers say e-cigarettes may help people quit smoking what they call combustible cigarettes, but the research is limited.

Public health experts have been clamoring for FDA to extend its authority as e-cigarettes have exploded in popularity. Former FDA commissioner Dr. Margaret Hamburg called the industry the “wild, wild West.”

The American Cancer Society's Cancer Action Network and the American Lung Association both urged the White House to speed authority for FDA to regulate e-cigarettes.

"Once the FDA has authority, the American Lung Association urges it to act swiftly to crack down and end marketing practices aimed at youth," the group said in a statement.

"It is also incumbent on states to enact and enforce laws to stop retailers from selling these products to children."

CDC says studies have shown that tobacco ads work. “Tobacco product advertising can entice youth to start using tobacco,” the report says.

And limits on that advertising, as well as taxes, restrictions on retail sales, ads promoting tobacco abstinence and other measures have been shown to work.

But states are not using money they were awarded from tobacco companies to fight tobacco use, the CDC said.

“However, in 2015, states appropriated only 1.9 percent ($490.4 million) of combined revenues of $25.6 billion from settlement payments and tobacco taxes for all states on comprehensive tobacco control programs, representing less than 15 percent of the CDC- recommended level of funding ($3.3 billion) for all states combined,” it said.

“Only two states (Alaska and North Dakota) currently fund tobacco control programs at CDC-recommended levels.” Maggie Fox Maggie Fox is a senior writer for NBC News and TODAY, covering health policy, science, medical treatments and disease.

Pfizer requests FDA clearance for vaccine in kids ages 12 to 15

Most kids with serious inflammatory illness had mild Covid

CORONAVIRUS

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4/12/2021 Ethical diamonds: What Conscientious Consumers Need to Know | The Diamond Pro

https://www.diamonds.pro/education/ethical-diamonds-conscientious-consumers-need-know/ 1/15

Education » Ethical diamonds: What Conscientious Consumers Need to Know

Ethical diamonds: What Conscientious Consumers Need to Know By Michael Fried

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BOTTOM LINE RECOMMENDATION We will get into the speci�cs about whether you need to truly be concerned about ethical practices in diamonds or whether Leo’s movie blew it out of proportion. There de�nitely are concerns, but there are also major bene�ts to supporting the diamond industry.

One intriguing option that has gained popularity in recent years are lab created diamonds.  Obviously buying a man-made diamond is an easy way to side-step the issue. We are not convinced that they are a good investment, but that may not be your only concern. For ex- ample, you can get this stunning 1 carat lab-created diamond at an excellent price. 

From co�ee to clothing, consumers are increasingly interested in how their products are sourced. Chief among their concerns is that workers are being treated fairly and that goods are being produced with the least environmental impact possible. It seems only natural that this shift in consumer culture would make its way to diamonds, often one of the most meaningful, and �nancially signi�cant, purchases of an individual’s life.

The term “ethical diamond” has emerged as a way for conscientious consumers to identify diamonds that are mined without exploiting workers or the environment. But what are the issues facing miners and mining ecosystems? What are “ethical diamonds”

4/12/2021 Ethical diamonds: What Conscientious Consumers Need to Know | The Diamond Pro

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exactly? And how do you bypass sophisticated, and often misleading, marketing tactics in order to procure one? The answer isn’t as clear as you may think.

BEWARE OF MARKETING PLOYS Before we get into the nitty gritty details of ethical diamond sourcing, be sure that you aren’t just falling for marketing �u�. Its easy to slap some branding on a diamond ring and charge more money for it. Nothing irks me more than companies which play on your ethical heartstrings to charge insane premiums with little actual value to show for it.

Sophisticated marketing language does not end at “con�ict free.” Take, for example, the terms “origin” and “provenance.” Some jewelers may assure you that whatever dia- mond you’re interested in can be provenanced to any number of reputable-sounding countries. But, when it comes to ethics and environmental responsibility, it essentially means nothing. As we will discuss, companies add some marketing gimmickry and then charge 25% more for the exact same diamond you can �nd on Blue Nile.

“The words ‘provenance’ and ‘origin’ have two very di�erent meanings in the diamond business,” Smillie states. “‘Origin’ means where the diamond was mined. ‘Provenance’ usually means its last stop before it got to you. For example, some diamonds are said to be Swiss in their provenance. That only means that their last stop on their way to the advertiser was Switzerland. ‘Provenance’ is elastic, so it could also mean other stops the diamond has made on its way to retail. Basically it’s a way of giving some comfort to a consumer if a jeweler can say that the ‘provenance’ is a known and reputable com- pany. Where that company got the diamond, and how many hands it passed through before they obtained it, is much harder to say.”

One online diamond retailer that sells “beyond con�ict-free” diamonds, o�ers “Botswana sort” diamonds to consumers. These diamonds—sourced from Botswana, Namibia, and South Africa, then brought to Botswana “for sorting and sale,” according to their website—are independently certi�ed by a third-party to be traceable to their origin.

However, as we’ve noted, mistakes can be made, even by honorable companies. (As we note in our review of Brilliant Earth, if a company can unknowingly break its exclusivity contract by listing the same diamond as Blue Nile, it seems plausible that it can make a mistake regarding the origin of its diamonds.)

4/12/2021 Ethical diamonds: What Conscientious Consumers Need to Know | The Diamond Pro

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DIAMOND MINING 101 When you look at a shimmering diamond, it’s hard to imagine that it began as a rough gem deep inside the earth. Most of us are so far-removed from what diamonds actu- ally are and where they come from that it’s di�cult for us to wrap our minds around their origins. However, in order to understand ethical issues surrounding diamonds, it’s important to �rst know a little about how they’re mined.

Diamonds are found two places: miles underground the earth’s surface in ancient kim- berlite formations (extracted via pipe mining) and in riverbeds and the ocean �oor (ex- tracted via alluvial mining). While some diamonds are mined in Canada and Russia, the great majority are found in Africa, where they’re sourced from both deep-earth mines and alluvial beds. Wherever they’re found, each diamond takes millions of years to form and requires extensive resources—both equipment and manpower—and time to discover.

Deep-earth mines, which employ cutting-edge technologies to dig miles into the earth’s surface, are owned and operated by large corporations, the largest (and most well- known) of which is De Beers (a company we’ve talked about here before). Industrial mining companies, including De Beers, also perform alluvial mining. However, a per- centage of this form of mining is performed by hand—a painstaking process, much like gold mining in the 19th and early 20th centuries, commonly referred to as artisanal mining—by individuals, mainly in African nations. This is where our ethical quandary begins.

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WHAT’S WRONG WITH ALLUVIAL MINING? If alluvial mining is performed by a large corporation like De Beers, which adheres to strict ethical and environmental standards (you can read in-depth information about the company’s commitment to ethics and environmental sustainability in its 2015 Re- port to Society in Review), consumers can have faith that the practice is ethically and environmentally sound. It’s informal alluvial mining (i.e. artisanal mining)—the kind done by hand in unsafe conditions by non-unionized workers—that presents a number of troubling issues.

Mining by hand is backbreaking work. Despite this intense labor, and despite dia- monds’ market value, an estimated one million African alluvial diamond miners earn less than a dollar a day. Without other employment options, they’re forced to live in ex- treme poverty in communities that often lack running water and proper sanitation.

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CLARITY SI2

C H EC K P R I C E

CARAT WEIGHT 1.20

COLOR I

CLARITY SI2

C H EC K P R I C E

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What’s more, many of these miners are children, some as young as �ve years old. Not only is the work physically demanding and unregulated (and therefore dangerous), all miners, including children, must work six to seven days a week. This means that child laborers typically do not attend school, condemning them to a lifetime of painful, dan- gerous work.

Since informal alluvial mining is mainly unregulated, conditions are unsafe and unsani- tary. Much of an artisanal miner’s day is spent digging in stagnant, dirty water that breeds insects and disease. Workers lack proper tools, training, and safety equipment, and landslides, mine collapses, and other accidents frequently cause injuries and death. It’s not only mining conditions that endanger the lives of these alluvial miners, many are subject to horri�c human rights violations—including violence, torture, and rape—by government militias and armed rebel groups seeking to capture and control mining areas.

This informal mining not only hurts miners and their communities, it wreaks environ- mental devastation across large areas of otherwise farmable land. In order to �nd dia- monds, miners must �rst remove the sand along riverbanks, then wash the soil to sort through it. The process renders the land useless by stripping delicate topsoil, leaving large mining pits �lled with dirty water in its wake, each quickly becoming a breeding ground for mosquitos and the diseases they carry. Rivers, often hastily dammed and rerouted, become polluted. Forested land is cleared. Fish are killed, wildlife is dis- placed, and, at its most severe, local ecosystems are destroyed.

WHAT PERCENTAGE OF DIAMONDS COME FROM INFORMAL ALLUVIAL SOURCES? According to the World Diamond Council (WDC), 24 percent of the world’s diamonds come from alluvial sources. Ten percent of these diamonds are sourced through indus- trial means and 14 percent through small-scale, informal digging. Since the WDC repre- sents the world’s biggest players in the diamond industry, and therefore, in our opin- ion, may be inherently biased (after all, who would want a diamond potentially un- earthed by a miner—even worse, a child miner—facing human rights abuse?), we reached out to independent experts to verify this statistic.

While it’s di�cult to estimate the percentage of diamonds sourced via informal alluvial mining with complete accuracy, experts we spoke to con�rmed the WDC statistic is fairly accurate. Top diamond industry analyst Chaim Even-Zohar puts the number at 15

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to 16 percent. Ian Smillie of African artisanal miner advocacy group Diamond Develop- ment Initiative estimates the number is a bit higher, ranging between 15 and 20 percent.

WHAT’S BEING DONE TO IMPROVE THE LIVES OF AFRICA’S ARTISANAL MINERS AND PROTECT THE ECOSYSTEMS IN ALLUVIAL MINING COMMUNITIES? There are a number of e�orts underway to help Africa’s artisanal miners and protect the environment in which they work and live. One major initiative, which also works to improve the lives of artisanal miners in South America, is the Diamond Development Initiative (DDI). Packed with government and industry representatives from around the world, the non-pro�t organization is dedicated to formalizing the artisanal mining sec- tor so workers, according to its vision statement, “have access to the opportunities, in- formation, and tools they need to work with dignity within �ourishing, self-sustaining communities.” As it works to formalize the industry and provide much-needed environ- mental remediation, it responds to urgent community needs, providing clean water, sanitation, and education (including mobile schooling units) for children in mining com- munities so they can pursue futures outside the mining industry.

Strengthening and protecting local ecosystems is another priority of DDI. The organiza- tion trains artisanal miners and site operators in environmentally sound practices, so that land and water are kept safe for both humans and animals. That commitment con- tinues after a site is retired, as DDI ensures each site is fully rehabilitated—often for agricultural purposes—once mining has ended.

Other artisanal miner advocacy groups—both also packed with a variety of govern- ment, industry, and community leadership groups—include the Peace Diamond Al- liance (PDA) and Mwadui Community Diamond Partnership. Formed to uplift the lives of diamond miners and traders from Sierra Leone’s Kono mining region, the PDA en- sures the revue from the diamond industry advances local development, educates miners on diamond values to prevent exploitation, and organizes diggers into coopera- tives to improve working conditions and protect human rights. The Mwadui Commu- nity Diamond Partnership similarly seeks to transform the artisanal diamond industry, but across the continent in the western African nation of Tanzania. As it seeks to estab- lish a practical, sustainable model for artisanal mining, it provides miners with health- care, access to fair-market pricing for the diamonds they mine, and more.

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ISSUES ASSOCIATED WITH PURCHASING “ETHICAL” DIAMONDS If you’re a conscientious consumer interested in purchasing an ethically and environ- mentally sound diamond, this is the question at the heart of the matter. Unfortunately, despite all the background information we’ve already provided you, it’s one that isn’t easy to address without a perfectly clear answer. To start answering this question, we’ll �rst need to rewind a bit, back to the 1990s when red �ags were �rst raised regarding the ethics of diamonds.

Issue 1: The misleading nature of “con�ict-free” diamonds You may have heard the term “blood diamonds.” Also known as “con�ict diamonds,” the phrase was coined in the late 1990s in reference to violent rebel groups that were taking over mining areas in central and western Africa. Once they took over these ar- eas (by brutal, deadly force, and, in some cases, systematic rape), they would illegally trade diamonds for weapons and money, fueling additional violence and horror. Unbe- knownst to consumers, these “blood” or “con�ict” diamonds wound up in jewelry stores around the world.

The Kimberley Process Certi�cation System was established in 2003 to prevent con�ict diamonds from entering the diamond supply chain. And while you can feel relatively con�dent (there’s debate about how well the Kimberley Process actually works) that di- amonds sold through legitimate sources are not funding rebel-led civil wars (coined “con�ict-free” in some marketing materials), this narrowly-focused certi�cation process makes it perfectly legal to sell diamonds tainted by violence, child labor, poverty, and environmental atrocities.

Once consumers learn about the injustices facing artisanal diamond miners, many want to know how they can avoid purchasing diamonds free of exploitation and envi- ronmental harm. Some mistakenly believe the label “con�ict-free” guarantees a dia- mond free of human rights violations and environmental wrongdoing. Unfortunately, and unbeknownst to well-meaning consumers, “con�ict-free” diamonds are still some- times (potentially 14 to 20 percent of the time, according to the statistics we stated ear- lier) rife with unethical and environmentally unsound practices.

Regrettably, the Kimberley Process—and the mainstream diamond industry—has given consumers a false sense of security when it comes to ethically sourced diamonds. Dia- monds certi�ed as “con�ict-free” by the Kimberley Process does not take those that

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have mined them, nor their surrounding communities and environments, into consid- eration. Despite what even the most well-meaning jewelers assure you, “con�ict-free” diamonds are only regulated to avoid the rebel-funded diamond trade, without regard to ethically or environmentally sound sourcing.

Issue 2: Most diamonds are not traceable to their origins As much as ethically minded consumers would like to believe, and despite what some conscientious diamond purveyors tell you, diamonds are not traceable to their origins like fair trade co�ee beans or organic produce. From mining to selling, diamonds pass through many hands, not all of them honest. Unless the diamond you purchase is from a Canadian mine or is lab-created (we’ll get into these options shortly), there is no guar- antee is has been ethically sourced.

Although the majority of today’s diamonds are industrially mined, and DDI has made great strides in helping Africa’s artisanal miners, there is simply no way to distinguish an ethically sourced diamond from a corrupt one. This is because, believe it or not, even in the 21st century with virtually every technology at our �ngertips, natural dia- monds—unless they’re from a CDCC cooperating Canadian mine—are not traceable to their original source.

“Most rough diamonds are sorted and mixed before they are cut and polished,” Smillie explains, even those from the most stringent De Beers-operated mines in Botswana. “Because most diamonds do not have traceable certi�cates of origin, it is impossible to say whether they come from artisanal sources or from large mining corporations….Some Canadian diamonds are branded as such and do come with chains of warranty. Most others lose their identity as they work their way through the diamond pipeline.”

There’s also no way to visually tell the di�erence between deep-mine and alluvial dia- monds, he continues, as “there are no distinguishing characteristics between diamonds from kimberlite and artisanal mining.”

Issue 3: Marketing strategies can give you a false sense of security Beyone what we were referring to above, It’s also worth noting that they consider Rus- sian diamonds to be “beyond con�ict-free,” which seems counterintuitive, especially

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when organizations such as Human Rights Watch continues to identify the country as increasingly oppressive.

When conducting your own research, and we implore you to do so, you may read that Russian mining companies employ tens of thousands of people and give back to the communities where they operate. While this information may indeed be true, it’s im- portant to link information about Russian mining back to the country where it origi- nates: a country widely known for oppressing—and in some cases, violating—the rights of its population.

“Information is extremely tightly controlled in Russia, thus there are no reports about human rights abuses in the diamond mines,” according to Even-Zohar.

“[Take] a look at the very detailed annual reports of [Russian mining company] Alrosa,” which is majority-owned by the Russian government, he implores. “You don’t see a sin- gle statistics on mine fatalities.”

This lack of reliable information, or any information at all, “doesn’t operate in a vac- uum,” he continues. “The Kremlin’s crackdown on civil society, media, and the Internet is taking an ever more sinister turn in recent years….Human rights mean one thing in Russia and something entirely else in other places.”

In other words, even though some companies such as Brilliant Earth (which, for the record, donates 5 percent of its pro�ts to DDI, which is indeed admirable), tout ethics above all else, be sure to take time to decipher the marketing tactics, including the lan- guage, of any retailer, and make up your mind about what’s right for you.

THIS IS A LOT OF INFORMATION. WHAT SHOULD I DO? It is a lot of information. Now that you’re knowledgeable about the troubling issues as- sociated with artisanal mining, as well as the marketing tactics that skirt around and/or camou�age them, what should you do? How can you get an ethically sourced diamond that’s 100 percent, beyond-a-shadow-of-a-doubt free of human rights abuse and envi- ronmental harm? One possible strategy is to avoid the problem altogether and purchase a branded CDCC compliant Canadian, lab-created, or recycled diamond.

While these options will guarantee that you have not purchased a diamond mined in a human-rights abusing artisanal mine, they are nonetheless robbing the African com-

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Think You’re A Diamond Pro?

munities that are dependent on diamond-sourced income of their livelihood. (More on that below).

Option 1: Lab-created diamonds Lab-created diamonds, also known as lab-grown diamonds or synthetic diamonds, are another option. Completely man-made, these diamonds look identical to natural dia- monds, and, since they’re “grown” in a lab, they are formed without any risk to miners or the environment.  They also have little to no resale value. You can read more about both of those issues here.

James Allen recently started selling lab-created diamonds and they have proven to be incredibly popular. Here is a gorgeous 3ct cushion cut diamond for signi�cantly less than a natural diamond.

Select

Select

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Both of these are beautiful 1.01ct H VS2 Excellent cut diamonds One is lab created and costs $1,250

One is mined and costs $4,940 Can you tell which is which?

Choose the diamond you like better and see if you are a pro!

Option 2: Canadian diamonds Canada doesn’t naturally come to mind as a source for diamonds, probably because it’s relatively new in terms of diamond production. (Diamonds weren’t discovered in the northern country until the 1990s.) But surprisingly, Canada has emerged as a major source of high-quality diamonds, many of them completely traceable to their source. What’s more, all Canadian diamonds are mined in line with the country’s strict environ- mental and fair labor laws—and with respect to local indigenous people.

The CanadaMark diamonds are not only polished in Canada, but they can be traced from mine to market with a unique ID number.

Option 3: Recycled diamonds Dubbed “the world’s largest diamond resource” by the Gemological Institute of America (GIA), recycled diamonds may seems like an o�-beat option, but they’re increasingly popular, especially amongst consumers that want to completely avoid the ethical and environmental issues associated with newly mined diamonds. Identical to their re- cently mined counterparts, recycled diamonds are removed from their original set- tings, and, in some cases, recut, re-polished and/or re-certi�ed.

Option 4: Kalahari Dream – The Optimal Solution Quite recently, a new solution has come to the market. If you are a consumer whose primary concern is avoiding the ethical pitfalls associated with diamond buying while doing what you can to support the communities that are reliant on diamond-sourced income in Africa, then this is the only option worth considering when purchasing an eti- cal engagement ring.

Kalahari Dream is a venture created by De Beers sightholder Leo Schachter Diamonds to sell diamonds direct to the consumer that they have purchased directly from south- ern African mining companies (such as Debswana, ODC, and Lucara) and manufac-

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tured themselves in their local Botswana polishing factory (employing hundreds of lo- cal citizens).

The stark di�erence between Kalahari Dream and Brilliant Earth is that Brilliant Earth is essentially no di�erent than Blue Nile in that they’re just listing diamonds that belong to someone else. You’re relying on other companies’ honesty in claiming that a dia- mond you’re buying came from one place or another. And furthermore, even if you can rely on them as to the origin of the rough, you can never know where the diamond was polished.

Kalahari is the polar opposite. They own the diamonds they sell. They have owned them since their initial purchase as rough from the Debswana partnership between De Beers and the Botswana government. They have polished the diamonds themselves in their factories which enrich the lives of the local population. Their system is airtight and does immeasurable good for the people of Botswana.

Empowering stories, like that of Kemmonye Kgatitswe and Goabaone Wetshootsile, successful polishers in their factory, are commonplace at Kalahari Dream.

BUY THE DIAMOND THAT FEELS RIGHT TO YOU Buying a diamond is much like buying anything else of importance: You do your re- search and make the decision that feels right to you (and perhaps to your partner as well, if both of you are involved in the decision-making process).

We live in a global society, where many of the products we use on an everyday basis (our cellphones, computers, and cars, for example) are composed of dizzying array of globally sourced materials, built by an equally dizzying array of global workers. Some of these workers are treated fairly, others are not. Some of these materials are sourced sustainably, others are not. Unless you have an in�nite amount of time to immerse yourself in research (and most of us don’t), about every single product you buy, it’s un- likely you have this information on hand (and if you did, you may not buy anything at all!).

While you may stop to think about the diamond in an engagement ring you’d like to buy, it’s unlikely you stopped to consider the conditions in which the gold surrounding that diamond was mined (gold mining is ripe with its own issues) or under what condi- tions the diamond itself was cut and polished. (We won’t go into that here!)

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And if you do decide to purchase a Canadian, lab-created, or recycled diamond, you’re directing funds away from those in Africa that depend on consumers like us to support their livelihood. (Diamonds account for one-third of the national GDP of the Republic of Botswana, thanks to the longtime Debswana partnership between the southern African nation and De Beers. With more than 4,000 employees and 5,000 contractors, Deb- swana is the largest private sector employer in Botswana.)

Furthermore, De Beers is developing new technology to recapture CO2 in the atmos-

phere and store it in the space left behind their mining operations. They aim to reach a level of carbon-neutrality in their mining operations (ie, to recapture as much carbon as they emit) within �ve years and to eventually capture a surplus of carbon in the at- mosphere. This would make natural diamonds much more appealing than synthetics when it comes to the environmental argument.

This is a lot to absorb, especially if you’re shopping for a diamond to commemorate an important milestone. We’ve told you everything here not to rain on your parade, but to bring up all sides of these issues so you can make an informed decision that feels right to you. After all, we’re dedicated to being completely transparent about the diamond industry, and ethical issues are part of that.

If you have questions about any of this, or anything about diamonds in general, please reach out to us. We’d love to hear from you and one of our diamond experts will be happy to address your inquiry.

About the author Michael Fried Mike learned the diamond business from the ground-up at Leo Schachter Diamonds - one of the world's top diamond manufacturers. He has been recognized as a diamond industry expert by Time, People, Money, The Daily Mirror, NerdWallet, The Times Herald, Yahoo Finance Australia, The Art of Charm, The Wash- ington Diplomat, The Next Web, and more.

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4/12/2021 Business Ethics Alive: Blue Bell vs Peanut Corporation of America - Chuck Gallagher

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Business Ethics Alive: Blue Bell vs

Peanut Corporation of America By Chuck Gallagher September 30, 2015 6 Comments

A tale of two companies.  A tale of business ethics.  A tale of core values.  A tale of different outcomes.  The question at the heart of this article is one of the seed of corporate culture and business ethics.  It’s easy to talk ethics, to sign

ethics and compliance agreements, but it’s far more difficult to live those ethical principles and that could not be more evident that what we’ve seen with Blue Bell and Peanut Corporation of America.

When Ethics Fail: Peanut Corporation of America

A jury in Georgia convicted Stewart Parnell and his brother and food broker, Michael

Parnell, with 76 federal counts linked to intentionally shipping out salmonella- laced peanut products.  This verdict marks the first federal felony conviction for a company executive in a food safety case.

According to CNN:

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A federal judge handed Parnell a 28-year prison sentence, the toughest penalty ever for a

corporate executive in a food poisoning outbreak. Parnell is 61 and unless he wins an

appeal, he will have to serve out most of his term.

His brother and food broker Michael Parnell received a 20-year sentence, and the plant’s

quality assurance manager, Mary Wilkerson, was given five years.

The 2008 salmonella outbreak traced back to peanut

butter paste manufactured by PCA killed nine people

and sickened 714 others, some critically, across 46

states. It was the deadliest salmonella outbreak in

recent years and resulted in one of the largest food

recalls in American history — from Keebler crackers

to Famous Amos cookies to the snack packets

handed out on airlines.

The salmonella outbreak was traced to the Georgia plant in 2009 by federal regulators who found a leaky roof, roaches and evidence of rodents at the plant.  Furthermore, they discovered emails and records showing food confirmed by lab tests to contain salmonella was shipped to customers anyway. Other batches got shipped with fake lab records showing negative for salmonella screenings.

Peanut Corporation closed after declaring bankruptcy in 2009.

A different approach at Blue Bell

Blue Bell Ice Cream issued a voluntary recall for all of its products because of a possible health risk found in half-gallon containers of Chocolate Chip Cookie Dough ice cream produced on March 17 and March 27, 2015.

According to a USAToday article:

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The FDA released its investigations into Blue Bell’s plants in Oklahoma, Texas and Alabama

after a Freedom of Information request by The Associated Press. The most extensive

violations were found in Oklahoma, where the FDA released 16 separate positive tests for

listeria on equipment and in ice cream from March 2013 through January 2015.

Violations in the Oklahoma plant include dirty equipment, inadequate food storage, food

being held at improper temperatures and employees not washing hands adequately.

There were also violations at the Texas and Alabama plants. In Alabama, FDA investigators

observed at least two employees working with the food wearing soiled clothing. In Texas,

investigators saw condensation dripping directly into food and onto surfaces that came

directly in contact with food. In all of the plants, the FDA found dirty equipment and

infrastructure that made cleaning difficult.

“Several swab tests did show the presence of listeria on non-food surfaces in Blue Bell’s

Broken Arrow plant in 2013,” the company said in an email. “As is standard procedure for

any such positive results, the company would immediately clean the surfaces and swab

until the tests were negative. We thought our cleaning process took care of any problems,

but in hindsight, it was not adequate, which is why we are currently conducting such a

comprehensive re-evaluation of all our operations.”

CEO and President Paul Kruse, facing concerns of listeria contamination shut down operations stating, “We are working closely with the appropriate federal and state regulatory agencies and our microbiology experts, and we are mapping out the many details of returning to production and distribution as soon as we can do so with confidence.”

Blue Bell ice cream returned to store shelves (Aug. 31) after a months-long recall.  Blue Bell said the Broken Arrow (OK) plant will start producing on a

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“limited basis” until extensive testing shows ice cream made there is safe to eat. The company said it wants to confirm new procedures, facility upgrades and employee training have been effective.

Contrast the Differences

Stewart Parnell and team tried to cover up the problem preferring to ship tainted products and roll the dice rather than incur the costs (substantial business costs) that are involved in shutting down to prevent further issues with contaminated products.

Parnell, age 61, has effectively been given a life sentence in federal prison – 28 years.  Peanut Corporation of American is no longer in business – a permanent loss for many whose livelihood was derived from employment there.

Blue Bell on the other hand, is still in business.  Yes the closure of multiple locations was incredibly costly.  Yes they likely lost market share to other brands.  Yes, some customers might have concerns about the quality of the product moving forward.  But, when it’s all said and done, taking the ethical high road (perhaps something they could have done sooner), has numerous advantages.

Act ethically and good things happen!  According to Fortune:

Sid Bass, a Texas investor worth an estimated $1.7 billion, has become an investor and

partner with Blue Bell, which has been closed since April and hasn’t set a date for when it

will begin selling ice cream once again.

“We are pleased Sid Bass has made a significant investment with our company. The

additional capital will ensure the successful return of our ice cream to the market and our

loyal customers,” said Paul Kruse, Blue Bell CEO and president, in a statement.

Every Choice has a Consequence!  Bravo Blue Bell and, well, Mr. Parnell perhaps we need to talk as I can help you prepare for federal prison.

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YOUR COMMENTS ARE WELCOME!

4/10/2021 5 Lessons Learned From Mattel's Lead Paint Crisis

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Learning from the faults of others can be a useful training tool. However, when it’s your company’s name being tossed around in discussions of what not to do, you need to do something…fast. In 2007, toy company Mattel embarked on four major product recalls. The recalls were the result of large quantities of lead found in the paint used in a number of their products. Mattel, like many other companies, uses contractors in China to manufacture products. This case raises supply chain concerns, bringing to light the importance of quality control and keeping an eye on the actions of your overseas operations and partners.

Mattel isn’t the only company to have been exposed to regulatory and reputational

risk. Learn about 13 other companies that learned lessons the hard way. Download

the free eBook The Unlucky 13: Lessons Learned from Companies Caught in the

Act.

Here are 5 key lessons learned from the crisis at Mattel:

1. Always Act Fast

Confront the issues, don’t hide from them. In Mattel’s case, the company was very public about the recalls and the CEO even issued a public apology. A quick reaction makes it easier for companies to cope with and take control of the situation. Reacting quickly helps companies score “bonus points” with the public, slightly reducing the negative impact that the recall has on the company’s reputation. When companies are slow to react or spend most of their time placing blame on others, the public reacts negatively, criticizing companies for their negligence and irresponsibility.  A quick reaction won’t solve all of your problems, but failing to do so, will open up a new can of worms to deal with.

2. Keep an Eye on Your Supply Chain To save on costs, Mattel has shipped manufacturing overseas to China. Having multiple offices and operation sites makes it difficult to keep an eye on day-to-day operations. According to the Financial Times Press article “Trouble in Toyland: New Challenges for Mattel–and ‘Made in China’,” one of the main issues in the lead paint crisis at Mattel was that the Chinese contractors had subcontracted the painting of the toys to another company that used inferior and unauthorized products. A lot of companies get caught in similar traps.

3. Take Responsibility Take the blame. Public finger pointing isn’t going to get you anywhere. In the Reuters article “Mattel Sued Over Toy Recall,” it was reported that Mattel’s CEO said that the company was increasing the aggressiveness of toy testing methods, which would likely result in additional recalls as a precautionary measure.

4. Tighter Regulations and Inspections

A quick reaction won't solve all of your problems, but failing to do so, will open up a new can of worms to deal with.

Crisis Learning from the faults of others can be a useful training tool. However, when it’s your company’s name being tossed around in discussions of what not to do, you need to do something…fast.

Posted by Joe Gerard on October 27th, 2010

27

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In the Wall Street Journal article, “Mattel Settles Suit Over Lead in China-Made Toys,” author John Kell writes:

“Toy makers were hurt by a number of product recalls in 2007, leading to millions of dollars in costs for testing, legal expenses, advertising and product returns. Mattel recalled millions of toys that year, including those produced under licenses for characters including Elmo, Big Bird, Barbie and Polly Pocket. The issue later led to mandatory federal toy-safety standards, which included testing and tough new regulations for lead and chemicals in products intended for children under 12.”

5. Take Action and Communicate During a crisis, such as the one experienced by Mattel, business leaders may say that changes are going to be made and policies will be followed more consistently, but do they actually follow up on their word once the storm has passed? Give weekly updates and use the power of social media to communicate to consumers about the progress your company makes as it works toward a solution. If 100 products have been tested, let the public know. Control the media and communicate your commitment to your consumers. It’s never more important than in a time of crisis to communicate and reassure the public.

Joe Gerard

CEO, i-Sight

Journal of Global Marketing, 23:288–305, 2010 Copyright c© Taylor & Francis Group, LLC ISSN: 0891-1762 print / 1528-6975 online DOI: 10.1080/08911762.2010.504519

An Empirical Examination of a Multinational Ethical Dilemma: The Issue of Child Labor

Shruti Gupta Julie Pirsch

Tulay Girard

ABSTRACT. Today’s global marketplace presents a variety of ethical dilemmas for multinational corporations. This ethical decision-making process becomes particularly challenging when the ethical standards in the company’s home country are higher than those in host markets. One global ethical is- sue that has received significant attention in international research is that of child labor, particularly the minimum age of employment. This article examines the issue of corporate ethical policies on the minimum age for child labor in emerging markets by using the universalist versus relativist ethical framework. Study results show that while both home and host consumers overwhelmingly prefer the universalist approach, the relativist option is acceptable only when the context of the host country is explained to both groups.

KEYWORDS. Child labor, corporate social responsibility, global ethics, multinational corporation

Recent news articles have reported on multi- national corporations (MNCs) from developed Western markets that were involved in child la- bor controversies in developing markets. In Oc- tober 2007, Gap, one of America’s biggest fash- ion retailers, was accused of using child labor to manufacture apparel for GapKids in Delhi, India (The Economist, 2007). The report, re- leased by the British newspaper The Observer, stated that an unauthorized subcontractor had used child workers, some as young as 10 years old, working 16 hours a day (Bahree, 2008), to make blouses. Such corporate actions by brand- based companies like Gap have been shown not

Shruti Gupta is Assistant Professor of Marketing, Department of Business Administration, Pennsylvania State University–Abington, Abington, Pennsylvania, USA. Julie Pirsch is Assistant Professor of Marketing, Department of Marketing, Villanova University, Villanova, Pennsylvania, USA. Tulay Girard is Assistant Professor of Marketing, Department of Marketing, Pennsylvania State University–Altoona, Altoona, Penn- sylvania, USA.

Address correspondence to Shruti Gupta, Department of Business Administration, Pennsylvania State University–Abington, 1600 Woodland Road, Abington, PA 19001, USA. E-mail: [email protected]

only to tarnish the value and attributes of the corporate brand but also to negatively impact brand loyalty in markets where switching costs and barriers are low (Werther & Chandler, 2005). The Gap example also highlights the challenge for international managers facing differences in home and host country ethical and social norms (Donaldson, 1996), particularly when host mar- ket ethical standards are significantly lower than home country standards (Prout, 2006).

Under such disparate conditions, managers must decide whether the organization should ad- here strictly to a global corporate code of con- duct (universalism) or follow the philosophy of

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“when in Rome, do as the Romans do,” mod- ifying global code of conduct practices to fit the local norms of the host market (relativism) when making decisions and shaping ethical busi- ness practices (Carroll, 2004). There is a need for empirical research to better understand and reconcile home-country and host-country ethi- cal standards, in hopes of moving ethical stan- dards toward an ethical norm (e.g., Carroll, 2004, p. 119).

This issue of whether to establish unified global ethical standards is particularly relevant when considering issues such as child labor. With the increase in manufacturing in host coun- tries like India, Bangladesh, and China, child labor, particularly the minimum age of employ- ment, has increasingly emerged as a prominent ethical issue for MNCs. The prevalence of these practices (particularly in certain industries such as clothing manufacturing) suggests that host consumers are more tolerant of child labor prac- tices and lower corporate child labor standards than are consumers in more developed countries. Global strategy argues that this is due in part to the fact that home consumers in Western mar- kets expect and demand higher ethical standards from companies; these consumers are consid- ered to be the driving force behind the socially responsible actions of MNCs (Manakkalathil & Rudolf, 1995).

Important global ethical issues faced by MNCs fall into eight categories, ranging from bribery to environmental issues (Carroll, 2004). This article investigates one of the eight ethical issues—the minimum age of employment and its relationship to child labor. This issue of child labor has been noted by researchers as a topic where host country and international (or home country) standards often diverge, with differing views on what constitutes child labor, the role of children in the society, and the standards that must be adopted for employment (Kolk & Van Tulder, 2002).

Results in this article analyzing 480 con- sumer responses from the United States and In- dia demonstrate that contrary to expectations, consumers in a less-developed country (India) with lower ethical business practice standards showed their disapproval of the relativist ethical strategy through both their negative evaluation

of the company and decreased purchase inten- tion of products made by the firm. And while an explanation of the local context of the minimum age of child labor to the respondents in both home and host countries produced a significant positive change in attitude toward the company for both home and host country consumers, it was the home country consumers who also in- dicated an increased level of purchase intent for the company’s products. This represents a sig- nificant departure from existing research in this area and offers the opportunity for additional in- sight into consumer views of the ethical business practices of MNCs.

CONCEPTUAL BACKGROUND

Ethical Conflict and Child Labor

With businesses today competing in an in- creasingly global marketplace, MNCs find them- selves operating in diverse social, cultural, and ethical environments. As a result, managing across borders presents significant ethical dilem- mas for MNCs (Buller & McEvoy, 1999; De George, 1993; Donaldson, 1989; Van Tulder & Kolk, 2001). Ethical conflict is particularly ap- parent when MNCs from developed countries find themselves operating in developing coun- tries that lack a set of articulated ethical stan- dards that safeguard the interests of all stake- holders (Carroll, 2004) or when a conflict exists between the national custom and culture in one country and the ethical standards and moral val- ues adopted by the firm (Smeltzer & Jennings, 1998). This can lead to conflicts for decision makers based on differences in perspectives and values (Buller, Kohls, & Anderson, 1997), dif- ferences in business practices and differences in the ethical principles that shape these practices (Donaldson, 1985, 1989).

An ethical conflict, defined here as “. . . a situation where it is not clear what choice morality requires” (Murphy et al., 2006, p. 2), can be examined and resolved using differing ethical approaches (Buller et al., 1997; De George, 1993; Desai & Rittenburg, 1997; Donaldson, 1989; Jackson, 1997). One of the more dominant frameworks as reviewed

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by Donaldson (1996) suggests that when a business faces ethical conflict, it can adopt either a universalist or a relativist approach. The universalist view argues that all cultures around the globe subscribe to the same overall value-set but develop specific ethical standards based on cultural context (Robertson & Fadil, 1999). Under this perspective, MNCs either develop their own global corporate codes of conduct or adopt global codes that have been developed by international bodies (e.g., UN Global Compact, Global Reporting Initiative, OECD Guidelines for Multinational Enterprises [Carroll, 2004]). Proponents of this view argue that increasing similarities among the needs of people around the globe has led to a convergence of values and beliefs giving rise to global ethical standards (Manakkalathil & Rudolf, 1995) that transcend national boundaries and cultural and social dif- ferences (Desai & Rittenburg, 1997). While this view is easier to manage and control from head- quarters, it does run the risk of being perceived in developing countries as ethically imperialistic and overbearing (Logsdon & Wood, 2005). This approach also requires frequent feedback and reinforcement in order to maintain global ethical standards, particularly in countries where such norms are not always practiced (Smeltzer & Jennings, 1998). A contrasting view to univer- salism that differs on its rationale though the outcome might appear similar is the concept of ethical imperialism or the moralist view, which states that global ethical business practices should be identical to the ethical codes followed at home. The theoretical rationale of this view stems from the concept of absolutism (Don- aldson, 1996), which suggests that a single list of truths expressed through one set of concepts demands the same code of behavior globally. In this case, and as suggested by Donaldson and Dunfee (1994), attempting to “photocopy” or export home-based ethical standards might be disrespectful to the local culture and may neglect the important role of moral space.

Under relativism or realism, the strategy is “when in Rome, do as the Romans do” (Don- aldson, 1996; Lane & Simpson, 1984). This view argues that in order to survive in the mar- ket environment of a foreign country, MNCs should adapt to the ethical business practices of

the host country. Proponents of this view argue that failure adapt to ethical business practices (that may be widely used by in-country com- petitors) will translate into lost business oppor- tunities and therefore lost jobs at home (Lane & Simpson, 1984). Subsequently, this view takes an endogenous approach at the subsidiary level by customizing corporate behavior through di- alog with local stakeholders, and acceptance of and conformity to local laws and standards (Chapple & Moon, 2005; Logsdon & Wood, 2005). The primary objection to relativism is that it may require companies to significantly com- promise their stated policies and practices, lead- ing to stakeholder backlash and potential legal ramifications at home (Donaldson, 1996). Dif- fering corporate actions across countries might also lead to internal tension and lack of con- sistency within the MNC (Muller, 2006). And, when the local context is a country with lower ethical standards than the home country, the relativist approach carries the risk of MNCs targeting those lower standards rather than the higher standards expected at home (Prout, 2006).

When considering ethical choices, MNCs face particular challenges in the area of child labor (Kolk & Van Tulder, 2002, 2004). Child la- bor continues to exist in the global workplace de- spite standards established by the International Labor Organization (ILO) prohibiting employ- ing children under age 14. One estimate by the ILO (cited in Jackson, 1997) suggests that more than 200 million children work in the global la- bor force, primarily in South Asia. India in par- ticular has become the world’s capital of child labor (The Economist, 2007), although estimates of the specific number of children under age 14 working in India vary significantly. A recent re- port from the ILO estimates that of the 218 mil- lion laborers worldwide under the age of 14, some 40 to 50 million are in India, accounting for about 20% of India’s GDP (The Economist, 2007). The 2001 census of the government of In- dia estimates this number at 12.6 million, while Global Research, a consulting firm based in Hy- derabad, India, estimates that in 2007, approx- imately 420,000 workers under the age of 18 (about half under 14) were employed in cotton- seed farms alone (Bahree, 2008).

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Based on these significant estimates, this topic has received much academic, social, and regu- latory attention. Research in business on the is- sue of child labor has centered primarily on the definition of the minimum age for employment (despite the myriad of other issues and impli- cations of employing children, which include the effect of child labor on both the child and society at large, harmful methods of recruiting children [kidnapping, purchasing children, etc.], the health effects of child labor, the limited ed- ucational opportunities for employed children, the often dire living and working conditions for child employees, and the displacement of adult workers by lower-paid child workers; Hindman & Smith, 1999). The debate on the minimum age of child labor is particularly relevant as MNCs relocate production to developing countries with lower social and environmental standards (Kolk & Van Tulder, 2002).

Some MNCs addressing the issue of mini- mum age for child labor in their ethics poli- cies elect to adhere to universal ethical norms, even when the local cultural and business envi- ronment utilizes child labor (Buller & McEvoy, 1999). The universalist strategy is often followed by MNCs based in developed nations, where child labor may in fact once have been common; these companies can be the strongest proponents of condemning child labor and applying univer- sal ethical standards (Hindman & Smith, 1999). Following a universalist policy on child labor can also be driven by Western consumers, who ex- pect MNCs to address the problem of child labor as a part of their social responsibility initiatives. As a result, “. . . many firms have adopted ethical codes of conduct that included prohibitions on child labor in overseas plants and contract op- erations” (Hindman & Smith, 1999, p. 29). For example, BP Amoco’s code of conduct stresses “. . . BP’s commitment to the elimination of all forms of forced or compulsory labour and the ef- fective abolition of child labour” (www.bp.com). Similarly, The Body Shop International also demonstrates a universalist position on child la- bor (www.thebodyshopinternational.com).

A second option for MNCs is to follow a strat- egy of local responsiveness under the relativist ethical strategy by taking the local customs and practices into consideration when establishing

child labor policies. Some argue that this rela- tivist ethical approach to child labor is critical, as child labor policies are by definition resistant to the application of universalist ethical standards (Buller & McEvoy, 1999; Kolk & Van Tulder, 2002) due to the strength of local customs and to competitor practices, among others. For exam- ple, one study (Kolk & Van Tulder, 2002) ana- lyzed the code of conduct on child labor for 50 multinational companies (60% from the United States and 35% from Europe, most from the ap- parel industry), specifically examining whether the MNC had adopted a universal minimum age of employment across all countries. Results showed that none of the 50 MNCs studied specif- ically referred to home country child labor laws (standards applicable in the company’s country of origin) in establishing their policies, although reference to the host country laws and/or inter- national standards were made. Sixty-six percent of the sample followed a country-specific mini- mum age child labor policy, 6% pursued a uni- versal minimum age policy, and the remaining 28% did not mention any minimum age child labor policy at all. The same study found that almost all MNCs in the sample referred to the host country law on minimum age requirement for employment, demonstrating a multidomes- tic strategy. Only a small minority in the sample adopted a universal approach to the above issue on child labor by implementing a minimum age requirement that applies to all country locations. Kolk and Van Tulder (2004) conclude that in countries where child labor is the norm, MNCs are inclined to adopt a multidomestic, relativistic approach instead of a universal one.

Corporate Code of Conduct and Consumer Response

MNCs typically address the minimum age of child labor and other socially relevant issues as part of their corporate social responsibility (CSR) policies. Conceptually, CSR is a measure of the firm’s responsiveness to its perceived so- cietal obligations (Brown & Dacin, 1997); these policies are meant to further social good beyond both the interests of the firm and beyond the laws governing the societies in which the firm operates (McWilliams & Siegel, 2001).

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While MNCs are motivated to behave ethi- cally and socially responsibly to meet the de- mands of all stakeholders with CSR policies, the interests of consumers and the general public are particularly relevant to the company’s per- ception in the marketplace (Logsdon & Wood, 2005). For MNCs including child labor policy decisions as part of their CSR policies, com- panies often face a significantly different set of expectations between home and host consumers. Operating in culturally distant markets (defined as markets with differences in cultural values; Sousa & Bradley, 2006) forces MNCs to recog- nize that “what is important to one culture at one time may not be important to another culture or even to the first culture at some time in the fu- ture” (Burton, Farh, & Hegarty, 2000, p. 153). This gap in expectations means MNC managers often have to face home country consumer pres- sure to comply with universalist ethical norms and issue complete bans on child labor as part of their CSR policies, even when manufactur- ing plants in host countries operate where child labor is common (Bahree, 2008).

This pressure toward universalism of child labor policies stems from evidence that home country consumers tend to benchmark ethical evaluations based on the more rigorous stan- dards of the home country that may reflect more universal ethical norms (Werther & Chandler, 2005). U.S. consumers (and their counterparts from other advanced nations) in particular have been shown to have higher ethical expectations of corporations, be more vocal about their so- cietal beliefs, and be more willing to alter their purchasing patterns to reflect these beliefs than those consumers in the developing world (Man- akkalathil & Rudolf, 1995). These consumers typically have the economic power through pur- chase to influence managerial decisions with re- spect to these choices as well; ignoring these demands can lead to decreased company atti- tudes, perceptions and purchase intent among these same consumers. This leads to the follow- ing research questions:

Research Question 1: Will home consumers prefer the universalist or relativist approach to the minimum age criterion for child la- bor?

Research Question 2: Will host consumers prefer the universalist or relativist approach to the minimum age criterion for child la- bor?

The Role of Context in Ethical Corporate Conduct

The role of cultural context has also been shown to influence the choice of ethical stan- dards for assessing the appropriateness of busi- ness decisions (Robin & Reidenbach, 1987). Differing cultural contexts can lead to different ethical expectations (Srnka, 2004); this in turn leads to different ethical norms that influence decision making (Ferrell & Gresham, 1985, p. 89; Srnka, 2004;). Given that firms are expected to assume responsibility for the social and eco- nomic consequences of their actions, organiza- tions such as Social Accountability and the Inter- faith Center for Corporate Responsibility along with The Caux Round Table and the Global Re- porting Initiative have developed universally ap- plicable standards for responsible business prac- tices. The objective of these standards is to pre- vent firms from taking advantage of regions with lax environmental or societal standards by mon- itoring corporate behavior.

Clearly, businesses cannot and do not always follow the universalist ethical strategy when es- tablishing their minimum age child labor policy. Companies must operate in diverse cultures and circumstances, where business practices can dif- fer greatly between developing and developed countries (Bird & Smucker, 2007). For exam- ple, the practice of exchanging gifts between business associates is considered inappropriate in countries such as the United States, but it might be perfectly acceptable or even expected in other countries such as India. Despite efforts to the contrary, MNCs must format their policies in this “moral free space” where context may in fact matter in the face of cultural traditions or developmental differences (Kolk & Van Tulder, 2004).

The question remains, however, as to whether consumers take the ethical context of the host country into consideration when assessing the company’s ethical business decisions. Informing home consumers outside of the cultural context

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about the system of values, ideas, and practices characteristic of the host culture may in fact im- prove the consumer’s negative response to the relativist approach adopted by the MNC. For ex- ample, if employing children under age 14 is inappropriate in the United States but accept- able in India, U.S. consumers might be willing to moderate their potentially negative percep- tions of a company following this practice if they are informed about the country’s customs. Subsequently, the following research questions are proposed:

Research Question 3: When companies choose the relativist approach, will home consumers exhibit a shift in their prefer- ences when the local context is explained?

Research Question 4: When companies choose the relativist approach, will host consumers exhibit a shift in their prefer- ences when the local context is explained?

RESEARCH METHOD

Sample

Two online samples (N = 480) were recruited from an Internet panel owned by a private mar- keting research company, one each from the United States (n = 266) and India (n = 214). The subjects represented the general population 18 and older, contributing to the external validity of the study results. No specific consumer crite- ria were used to recruit the sample. Subjects were invited to participate through an e-mail that pro- vided a link to the Web survey. Table 1 presents the number of invitations, visits, and completed surveys for each group of respondents, which shows a 5% to 10% response rate, similar to other forms of survey formats.

An online panel of consumers from India and the United States was selected to investigate the research questions presented in this article. The choice of India as a stimulus for the study was made for a number of reasons. A study compar- ing 11 nations across a number of dimensions for selecting or preferring global brands showed few differences between the United States and India. Both U.S. and Indian consumers made

TABLE 1. Invites, Visits and Completes for Survey Groups

Response Samples Invites Visits Completes rate

Universalist U.S. 2870 299 139 4.8 Relativist U.S. 2869 278 127 4.4 Universalist India 1250 228 100 8.0 Relativist India 1250 252 114 9.2

decisions primarily based on the “global success of a company as a significant signal of quality and innovation” (Holt, Quelch, and Taylor 2004, p. 73). Consumers in both countries also demon- strate a high level of awareness of social efforts by companies. Both U.S. and Indian consumers “are concerned about whether companies be- have responsibly on issues like consumer health, the environment, and worker rights” (Holt et al., 2004, p. 73). Both U.S. and Indian consumers with Internet access also demonstrated similar demographic details, allowing for comparable samples from both populations (demographic profiles are presented in Table 2). Further, India is an emerging market with changing social attitudes, levels of affluence and education. As such, India represents a significant opportunity for MNCs looking to expand their markets. Indian consumers have ample experience with multinational brands: seven of the top 20 brands in India come from established MNCs, with the remainder from Indian companies and “new” foreign brands to the Indian market (Gopal & Srinivasan, 2006). With 1.1 billion in popu- lation, India has the fourth largest purchasing power in the world, a $350 billion retail market, and is expected to grow at about 30% annually (Yun et al., 2008). In this changing market, Indian consumers are becoming more materi- alistic (similar to more Westernized countries); research shows that the Indian consumer’s de- sire to save for electronics and durables almost matches the desire to save for their children’s education (Gopal & Srinivasan, 2006). Last, the issue of the minimum age for child labor is par- ticularly relevant to the Indian consumer, due to the proliferation of working children in the labor market. And from a practical standpoint, while

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TABLE 2. Sample Characteristics

Demographic United States India Total characteristics (n = 266) (n = 214) (N = 480)

Gender Male 49.6 73.8 60.4 Female 50.4 26.2 39.6

Marital status Single 28.9 41.6 34.6 Married 46.6 50.0 82.7 Living w/ partner 10.5 4.2 7.7 Separated 1.1 0.5 0.8 Divorced 10.2 0.9 6.0 Widowed 2.3 1.9 2.1 Prefer not to answer 0.4 0.9 0.6

Occupation Full-time 46.6 50.9 48.5 Part-time 11.3 12.1 11.7 Self-employed 4.9 14.5 9.2 Student 9.8 12.1 10.8 Retired 13.2 4.7 9.4 Homemaker 10.5 4.2 2.1 Unemployed 2.6 1.4 0.6

Education level High school 30.8 3.3 18.6 Two-year college 29.3 10.3 20.9 Four-year college 30.8 49.3 39.0 Master’s 6.4 35.2 19.2 Doctorate 2.6 1.9 2.3

Age (yr) 18–25 26.7 34.6 30.2 26–45 39.8 42.0 40.8 46–65 25.2 22.9 24.4 65+ 8.3 0.5 4.6

Geography City 34.6 85.0 57.1 Suburb 38.0 11.7 26.3 Rural 27.4 3.3 16.7

Income (U.S. sample) <$24,999 22.2 $25,000–49,999 33.1 $50,000–74,999 22.9 $75,000–99,999 15.0 >$100,000 6.8

Income (India sample) <Rs 24,999 21.2

Rs 25,000–49,999 31.6 Rs 50,000–74,999 19.8 Rs 75,000–99,999 10.8 >Rs 100,000 5.7 Prefer not to answer/ don’t know

10.9

the practice of employing underage children is also common in other developing countries such as Cambodia, Mali, Burkina Faso, Bolivia, and Guatemala (Bahree, 2008), India provided

the most accessible research market for the study.

Table 2 presents a descriptive profile of the sample for both the United States and India; de- mographic data show that although both samples were comparable across most of their sociode- mographic attributes, disparities did exist in the gender and education categories. In order to as- sess the respondents’ comfort level with taking an online survey, each was asked to rate his or her technical proficiency with a computer (1 = Not very proficient, 7 = Very proficient) and to re- port the number of hours per week spent online, for either work or personal use. Results show a fairly sophisticated technical group in both sam- ples. The mean for the self-assessment of level of technical proficiency for the U.S. sample was 5.02, with an average of 20.6 hours per week spent online. For India, technical proficiency av- eraged 5.29, with an average of 24.9 hours per week spent online, indicating comparable famil- iarity with the survey medium chosen.

Stimulus Selection and Study Design

Respondents in both country samples were randomly assigned to read a fictitious scenario that presented the case of a U.S. MNC operat- ing in India. In the scenario, respondents were primed with either a universalist or a relativist ethical approach to the company’s minimum age policy on child labor. A fictitious company was chosen for the scenario (rather than a real com- pany) to enhance the internal validity of the re- sults; use of a fictitious company controls for the confounding effect of extraneous variables such as company preference and consumer familiarity and brand awareness.

The survey instrument was programmed in a way that did not allow the respondent to re- turn to the previous web page. Subjects were also required to respond to all questions in a section in order to progress to the next page of the survey. As highlighted by Belk et al. (2005), quantitative studies that examine sensitive issues such as ethics-based decision making tend to be susceptible to social desirability bias or the de- sire to respond in a way that is viewed as fa- vorable by others (Crowne & Marlowe, 1960). To test for this bias, the study also measured

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the respondents’ social desirability bias using Fisher’s 13-item modified Social Desirability scale (Crowne & Marlowe, 1960; Fisher, 1993).

Attitude toward the company and purchase in- tent were used to assess the consumer’s response to the universalist versus relativist approach to the issue of minimum age of child labor. Atti- tudes are defined as the summary evaluations of objects, issues, or people based on behavioral, cognitive, and affective information or experi- ences (Petty, Unnava, & Strathman, 1991; Petty, Wegener, & Fabrigar, 1997). Companies imple- menting CSR programs have been shown to lead to favorable customer attitudes towards the spon- soring firm (Brown & Dacin, 1997; Ross, Patter- son, & Stutts, 1992; Ross, Stutts, & Patterson, 1990-1991) as well as improved purchase of the company’s products (Brown & Dacin, 1997; Sen & Bhattacharya, 2001). Purchase intent is used as the manifestation of the consumer’s attitude toward the company.

Procedure

When taking the survey, subjects were asked to read a brief description of the meaning of CSR in general to ensure that all subjects shared a similar conceptualization for the study. The subjects’ social desirability level was measured next, followed by their CSR proneness (the consumer’s preference for purchasing products made by socially responsible companies, along with their rationale to do so). The treatment (see Appendix A) was then presented in newspaper format, as Indian consumers (the “host” coun- try group) have indicated a greater level of trust in company information reported through media or other external groups than in reports from the companies themselves (Arora & Puranik, 2004).

After reading the treatment, respondents answered questions to indicate their attitude towards the hypothetical company and their intention to purchase products from this com- pany. The universalist ethical scenario outlined a U.S. MNC’s home-based CSR policy on under- age employment, indicating that the company has chosen to extend and enforce this policy in India where it was currently operating and would therefore not hire children under 18 in its

factories in the host country. In the relativist eth- ical scenario, the respondent was informed that though the U.S. MNC had a CSR policy against hiring children under 18 at home, it decided to modify its CSR policy in the host country where it was currently operating, and had employed children under 18 to work in its factories there. Each scenario reflects a treatment presented to the subjects as part of the experimental design methodology used in this study.

Next, all four groups were presented with a “context” scenario in a newspaper article for- mat (see Appendix B), which informed subjects about the business climate in the host country. In this scenario, underage employment was re- ported as a common labor practice in the host country, stemming from the need to generate additional income for families and from lax en- forcement of child labor laws. Respondents were then asked to indicate whether the knowledge of context of the host country for child labor changed their attitude toward the company or their purchase intention. The survey ended with basic questions to assess the sociodemographic profile of the sample.

DATA ANALYSIS AND RESULTS

Discriminant and Convergent Validity

Latent dependent variables were analyzed by examining the convergent and discriminant va- lidity of the measurements. Appendices C and D detail results showing that Nunnaly’s (1978) convergent and discriminant validity thresholds were met between the precontext and postcon- text constructs. However, precontext attitude and precontext purchase intent items converged into one dimension, and postcontext attitudes and postcontext purchase intent items converge into another dimension. This result was expected, as consumer attitudes are typically highly and pos- itively correlated with purchase intent.

Research Questions 1 and 2

Testing research questions 1 and 2 involved one way ANCOVAs with both attitude toward the company and purchase intent as the de- pendent variables, country type (United States

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versus India) as the independent variable (treat- ment dummy variable) and social desirability bias as the covariate. Consumer responses to each treatment (universalist/relativist ethical op- tions) group were analyzed separately by group (U.S. and Indian samples).

Research question 1 examined whether home consumers prefer the universalist or the relativist approach to a minimum age on child labor. One- way ANCOVA results show that the mean atti- tude toward the company for home consumers under the universalist ethical condition (M = 5.24, n = 139) differed significantly from the mean under the relativist ethical condition (M = 2.95, n = 127; F(2,264) = 176.53, p = .000, so- cial desirability = [F(2,264) = 0.253, p = .616]). This indicates that home consumers have a more positive attitude toward the company when the company chooses the universalist versus the rel- ativist ethical approach to the minimum age of child labor. One-way ANCOVA results also show that the mean purchase intent for home consumers under the universalist ethical condi- tion (M = 4.90, n = 139) differed significantly from the mean under the relativist ethical con- dition (M = 2.83, n = 127; F(2,264) = 128.49, p = .000, social desirability = [F(2,264) = 0.406, p = .525]). This indicates that home consumers have higher positive purchase intent for the com- pany’s products when the company chooses the universalist versus the relativist ethical approach to the minimum age of child labor. Social de- sirability did not have a confounding effect on (U.S.) consumers’ attitude or purchase intent be- tween treatments (universalist versus relativist approach).

Research question 2 examined whether host consumers prefer the universalist or the relativist approach to a minimum age on child labor. One- way ANCOVA results show that the mean at- titude toward the company for host consumers under the universalist ethical condition (M = 5.35, n = 100) differed significantly from the mean under the relativist ethical condition (M = 2.73, n = 114; F(2,212) = 147.40, p = .000), holding social desirability constant (F(2,212) = 6.51, p = .011). This indicates that host con- sumers also have a more positive attitude toward the company when the company chooses the uni- versalist versus the relativist ethical approach to

the minimum age for child labor. Additionally, one-way ANCOVA results show that the mean purchase intent for host consumers under the universalist ethical condition (M = 4.99, n = 100) differed significantly from the mean under the relativist ethical condition (M = 2.87, n = 114; F(2,212) = 81.35, p = .000), holding so- cial desirability constant (F(2,212) = 10.56, p = .001). This indicates that host consumers have more positive purchase intent for the company’s products when the company chooses the uni- versalist versus the relativist ethical approach to the minimum age of child labor. Social desir- ability bias did have a confounding effect on host (India) consumers’ attitude and purchase intent between the treatment (universalist ver- sus relativist approach) groups. In other words, the level of importance India consumers’ place on an MNE’s socially responsible practices (i.e., legal, ethical, philanthropic) played a significant role in their attitude and purchase intent. This means that those who did not place much impor- tance on an MNE’s socially responsible prac- tices preferred the relativist approach. However, the mean differences of India consumers’ atti- tude (M = 5.35 versus 2.73) and purchase intent (M = 4.99 versus 2.87) between the two treat- ment groups were highly significant; therefore, social desirability bias does not make a counter- intuitive effect in the results.

Further, findings show that under the univer- salist condition, home country consumers’ over- all attitude toward the company (M = 5.24, n = 139) was not significantly different than that of host consumers (M = 5.34, n = 100; F(2,237) = 0.378, p > .05; social desirability = (F(2,237) = 2.3, p > .05)). Similarly, home country con- sumers’ purchase intent (M = 4.90) was not sig- nificantly different from that of host consumers (M = 4.99, n = 100; F(2,237) = 0.263, p > .05; social desirability = [F(2,237) = 2.7, p > .05]). Under the relativist condition, home coun- try consumers’ overall attitude toward the com- pany (M = 2.95, n = 127) was not significantly different than that of host consumers (M = 2.95, n = 114; F(2,239) = 0.378, p > .05), holding social desirability constant (F(2,239) = 8.8, p = .003), nor was the home country consumers’ pur- chase intent (M = 2.83, n = 127) significantly different from that of host consumers (M = 2.87,

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n = 114; F(2,239) = 0.55, p > .05), holding so- cial desirability constant (F(2,239) = 11.990, p = .001). The results show the parity in response across the U.S. and India samples towards the company practices of universalist and relativist approaches to the issue of minimum age for child labor.

Research Questions 3 and 4

Research question 3 examined whether home consumers would adjust their evaluation of the company under the relativist approach when the child labor context was explained (child labor is presented as a customary practice in the host country). A t -test was performed with the mean value set to 3, based on the study’s scale of 1 = My attitude is much less favorable than before, 3 = My attitude is about the same as before, and 5 = My attitude is much more fa- vorable than before. Under the relativist ethi- cal condition for minimum age for child labor, home consumer’s attitude toward the company changed (MPost−context = 3.866) making it sig- nificantly different (higher) than the midpoint (t = 8.297, df = 126, p = .000). This indi- cates that home country consumers’ attitudes improved when informed of the context of the relativist child labor choice for the company. Similarly, a t -test was performed with the mean value set to 3, based on the study’s scale of 1 = My purchase intent is much less favorable than before, 3 = My purchase intent is about the same as before, and 5 = My purchase intent is much more favorable than before to determine whether home consumer purchase intent was more positive when home consumers were in- formed of the social context of the minimum age for child labor than when consumers were not in- formed. Results show that home consumer’s pur- chase intentions toward the company’s products under the relativist ethical condition were signif- icantly more favorable when the consumer was informed of the context of the host country’s po- sition on child labor than their precontext evalu- ation (MPost−context = 3.709, t = 6.417, df = 126, p = .000).

Similar results were also the case for home consumers’ attitude and purchase intention un- der the universalist ethical condition for mini-

mum age for child labor. Under the universalist ethical approach, home consumers’ attitude to- ward the company also changed (MPost−context = 3.97), making it significantly different (higher) than the midpoint (t = 8.363, df = 138, p = .000). This indicates that home country con- sumers’ attitudes improved when exposed to the context of the universalist child labor choice for the company. Similarly, a t-test was performed with the mean value set to 3, based on the study’s scale of 1 = My purchase intent is much less fa- vorable than before, 3 = My purchase intent is about the same as before, and 5 = My purchase intent is much more favorable than before, to de- termine whether host consumer purchase intent was more positive when host consumers were in- formed of the social context of the minimum age for child labor than when consumers were not informed. Results show that home consumer’s purchase intentions toward the company’s prod- ucts under the universalist ethical condition were significantly more favorable than the precontext evaluation (MPost−context = 3.94, t = 7.740, df = 138, p = .000).

Research question 4 examined whether host consumers would exhibit a shift in their pref- erences under the relativist approach when the local context for the minimum age for child la- bor was explained. A t -test was performed with the mean value set to 3, based on the study’s scale of 1 = My attitude is much less favorable than before, 3 = My attitude is about the same as before, and 5 = My attitude is much more favorable than before. Under the relativist ethi- cal condition for minimum age for child labor, host consumers’ attitude toward the company changed (MPost−context = 3.443) making it sig- nificantly different (higher) than the midpoint (t = 3.449, df = 113, p = .001). This indicates that host country consumers attitudes improved when exposed to the context of the relativist child labor choice for the company. Similarly, a t -test was performed with the mean value set to 3, based on the study’s scale of 1 = My purchase intent is much less favorable than before, 3 = My purchase intent is about the same as before, and 5 = My purchase intent is much more favorable than before, to determine whether host consumer purchase intent was more positive when host consumers were informed of the social context

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of the minimum age for child labor than when consumers were not informed. Results show that host consumers’ purchase intentions toward the company’s products under the relativist ethical condition were not significantly more favorable than their precontext evaluation (MPost−context = 3.168, t = 1.256, df = 113, p > .05).

Under the universalist ethical condition for minimum age for child labor, host con- sumers’ attitude toward the company changed (MPost−context = 4.093) making it significantly different (higher) than the midpoint (t = 7.070, df = 99, p = .000). This indicates that host country consumers’ attitudes improved when ex- posed to the context of the universalist child labor choice for the company. Similarly, a t - test was performed with the mean value set to 3, based on the study’s scale of 1 = My pur- chase intention is much less favorable than be- fore, 3 = My purchase intention is about the same as before, and 5 = My purchase inten- tion is much more favorable than before, to de- termine whether host consumer purchase intent was more positive when host consumers were informed of the social context of the minimum age for child labor than when consumers were not informed. Results show that host consumers’ purchase intentions toward the company’s prod- ucts under the universalist ethical condition were significantly more favorable than the precontext evaluation (MPost−context = 4.046, t = 6.347, df = 99, p = .000).

DISCUSSION

Results from this study present MNCs with compelling evidence against the temptation to alter universal ethical standards regarding min- imum age for child labor to accommodate host country norms and practices. Findings show that despite the lower ethical standards of the host country, both home and host country con- sumers expect high ethical standards for child la- bor practices from MNCs entering host markets. Consumers in both populations show their dis- approval of the relativist ethical strategy through both their negative evaluation of the company and decreased purchase intention of products made by the firm. These results contrast with the argument made in global ethics literature

that it is generally the home consumers in devel- oped countries who expect and demand higher ethical standards from companies, and are con- sidered to be the driving force behind CSR actions of MNCs (Manakkalathil & Rudolf, 1995).

This preference for the universalist rather than the relativist approach to child labor is not sur- prising if child labor is viewed in the context of a hypernorm. Hypernorms are universally appli- cable norms of ethical behavior that emerge from “principles so fundamental to human existence that . . . we would expect them to be reflected in a convergence of religious, philosophical, and cultural beliefs” (Donaldson & Dunfee, 1994, p. 265). Hypernorms are standards all societies ad- here to irrespective of local context; examples of such societal hypernorms are rules against mur- der, torture, and oppression, and in business, the rule to inform employees of any potential health hazard at the workplace. It is possible that re- spondents in both groups regarded the stimulus used for this study as an inviolable hypernorm, despite the fact that child labor is common in India.

This issue of hypernorms also raises interest- ing questions about the universality of ethical and business standards commonly addressed by CSR programs in general. It is possible that the major categories of CSR initiatives (e.g., em- ployee fairness, community involvement, corpo- rate philanthropy, human rights, corporate gov- ernance) all or at least in part may also belong to a hypernorm category. If this is the case, regardless of where a company operates, these major CSR initiatives should either adhere to the highest standards of all the countries in which the com- pany operates, or should adapt to the standards of those countries judged to have the highest eth- ical standards by the international community. Following this strategy would not only allow MNCs to present a powerful and well-respected CSR message to international audiences, but also could protect these companies from negative publicity, decreased consumer percep- tions, decreased sales, and litigation.

A second explanation for the overwhelming support for the universalist approach to the min- imum age for child labor among both consumer stakeholder groups might lie in the nature of the

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samples used in this study. This research used an online sample in each country, with each sample group exhibiting comparable levels of technical proficiency and comfort in an online environment. Research suggests that access to information disseminated over the Internet may contribute to the increasing importance of CSR among stakeholders by drawing worldwide at- tention to corporate acts (Werther & Chandler, 2005). As a result, the consumers in the response groups may be both more aware of the ramifica- tions of child labor in general, leading to pref- erence for the universalist approach as well as being more aware of the “necessity” or child la- bor in some less developed countries, leading to the improved attitude and purchase intent scores post exposure to the country context.

Further, both the U.S. and India samples were comparable across sociodemographic attributes. While this choice of samples enhanced the ex- ternal validity of the study results, the choice could also have contributed to the parity among responses between the two groups. This suggests that MNCs entering emerging markets primarily target middle class consumers who are socially and economically comparable to their counter- parts in the Western markets (rather than target- ing the majority of the population at the bottom of the pyramid) (Prahalad, 2006).

Third, it is possible that MNCs from devel- oped countries may underestimate the social re- sponsiveness of developing nations (or at least of Indian consumers in particular). In a study to measure CSR activity reported on the web in seven Asian countries, Chapple and Moon (2005) found that India scored the highest on self-reported CSR activity, indicating a particu- larly high level of awareness of CSR activities, with community involvement, environmental re- sponsibility and employee welfare as issues that received the greatest attention. Further, “. . . the finding for India is precisely opposite to the as- sumption that CSR is a function of development” (Chapple & Moon, 2005, p. 437); despite hav- ing the lowest level of GNP per capita in the sample, India had the highest level of reported CSR of the respondents from the sample coun- tries. This unexpectedly high level of social con- sciousness may be grounded in India’s “long-

standing, religiously derived, philanthropic tra- ditions” (Chapple & Moon 2005, p. 437) and may also be associated with its long history of “internationalization of business, colonization and imperialism” (Chapple & Moon, 2005, p. 437) where successful business practices were built around social and religious reforms (Chap- ple & Moon, 2005). This suggests that rather than assuming that all consumers in a culture operate at the lowest common ethical denomi- nator, MNCs should recognize the similarities within demographic segments across cultures. Failure to do so is not only short sighted from a business standpoint, as these results show, but also suggests an imperialist Western view of the emerging markets of the world on the part of the MNC, which the savvy consumer cannot fail to recognize.

Results for the role of context also allow for some interesting insights. Test results show that when home and host country consumers are in- formed of the context of the host country market in terms of minimum age for child labor, they will amend their assessments of and behavior to- ward the company adopting the relativist ethical approach. Context findings support previous re- search on the role of national context in ethical decision making (Donaldson & Dunfee, 1999; Spicer, Dunfee, & Bailey, 2004; Robertson & Ross, 1995) arguing that individuals will use lo- cal norms as a benchmark to evaluate the ethical behavior of others. Both home and host coun- try consumers registered a significant positive change in their attitude toward the company after learning of the context of the host country. Home country consumers also indicated an increased level of purchase intent for the company’s prod- ucts when learning of the host country’s child labor policies and context. Host consumers, on the other hand, indicated no significant change in their intent to purchase the company’s products.

These results could be attributable to the fact that consumers are able to recognize the dif- ferences between cultures, and the subsequent impact of these cultures on business practices. Somewhat surprisingly, in terms of purchase in- tent home country consumers seemed more un- derstanding of the company’s relativist position

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than Indian consumers. This contrasts with the argument made that Western consumers in more developed countries hold MNCs to higher ethical standards. In fact, in this study host consumers were less likely than home country consumers to translate this modification into increased pur- chase.

The following sample responses from the home consumer stakeholder group post context reveal the reasons that support the adjustment in response towards the multinational:

. . . If it is expected and normal behavior and all children in that country work to help support the family then it doesn’t seem as bad. I think that this company is supplying need[ed] income for these families. It may not be the best situation but it is what it is. . . . this confirms that they are acting within the culture of that country. If this is a common practice, there is very little I can do. If they do it in U.S., why not in India? I have visited foreign countries and real- ize that the opportunities available to poor citizens of other countries necessitate the conditions depicted. Other countries have their own laws and rules governing child labor, we shouldn’t interfere as long as the children are safe. If the families need the money to survive then maybe company X is doing them a favor by letting the children work.

And from the host consumers:

It is a practice and company X is not the only firm that does this. The journalistic re- ports may be often inflated and I think they indirectly help the poor. They hire chil- dren not forcefully and the parents are to be blamed for this. . . . because they [the children] are also hu- man beings, they also have to eat to survive so giving them employment is o.k. . . . in the Indian context it is important that for poor families . . . to increase per capita income, other issues carry lesser priority.

. . . Because being a citizen of India, I know about the India’s business climate. We can’t solely blame these companies. It’s responsibility of everyone.

THEORETICAL AND MANAGERIAL CONTRIBUTIONS

The conceptual framework introduced in this article contributes to the area of global ethics literature in a number of ways. First, it draws at- tention to the universalist versus relativist ethical dilemma faced by MNC managers considering minimum age for child labor policies when en- tering emerging host markets with lower ethical and/or business practice standards. Second, it investigates both the home and host consumers’ preferences of both options in terms of their atti- tude towards the MNC and intention to purchase products made by the company. Third, results reveal that both home and host consumer groups are equally empowered in shaping the ethical strategy for child labor, despite the often signif- icant economic dominance of the Western con- sumer. Most important, this study answers the call (Carroll, 2004) for empirical evidence ad- dressing the differences in global and host coun- try ethical standards and presents data that jux- taposes the views of home and host consumers on the same issue.

From a managerial perspective, these re- sults suggest that MNC managers should not be tempted to adapt to lower ethical standards of the host market (Prout, 2006) as a way to save money or to fit in with local norms, as host consumers are equally demanding of high ethical standards from a foreign multinational as their home country counterparts. Exporting CSR initiatives to host markets is both practi- cal and smart for MNCs, and supports the idea that socially responsible behavior helps sustain product quality, implement universal produc- tion processes and reduce future liability costs that might result from irresponsible behavior (Prout, 2006). MNC managers must carefully identify the target consumer for their CSR pro- grams in order to maximize the impact of these programs. Results suggest that CSR programs in host countries target demographically and

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technologically comparable consumers within those markets, as they have been shown to re- spond in a similar way to their Western coun- terparts. Specific, demographically targeted pro- motional campaigns highlighting the MNC’s CSR effectiveness will be successful in achiev- ing positive results from the targeted host country consumer. Finally, managers must be aware of the cross-cultural hypernorms that govern the various aspects of corporate CSR behavior and policy. Making the assumption that a lower level of development within a country means the opportunity to compromise CSR policies could significantly damage the MNC’s perceptions and sales in the host country. Understanding which social issues resonate most significantly with both the home and host con- sumers (Auger, Devinney, & Louviere, 2007), establishing a universal code of conduct that incorporates the vested interests of both pop- ulations (Manakkalathil & Rudolf, 1995), and knowledge of basic global ethical standards in addition to local norms (Galbreath, 2006) will help to shape the most effective and relevant ethical policies on the minimum age for child labor.

LIMITATIONS AND FUTURE RESEARCH

One limitation of this study, which the au- thors believe to be a limitation of all CSR-type studies, is the structure of the questions them- selves that may result in demand artifacts. In order to investigate the influence that universal- ist and relativist ethical strategies in terms of child labor have on consumers, it is of course necessary to ask specific questions about the fic- titious company’s policies. The concern is that such questions force the consumer to focus un- due attention on these programs, and therefore may give an unrealistic picture of the degree to which consumers notice and are affected by the presence of CSR initiatives such as setting a min- imum age for child labor. A second limitation of this study is the use of child labor as a stimulus. This issue could be so emotional for consumers in both markets that it forces their responses to the extreme. This decreases the generalizability

of these findings to other components of a com- pany’s CSR policy. Third, the choice of an online panel for the study sample might not be repre- sentative of the entire population in each coun- try and therefore, a future research project might choose to investigate the generalizability of find- ings by engaging a different method of sample selection. Fourth, the U.S. and India samples were dissimilar in the areas of gender (mostly males in India) and education (over 80% of the India sample had undergraduate and/or graduate education).

Findings from this article present several op- portunities for future research. It would be inter- esting to see whether these results could be dupli- cated for foreign MNCs based in countries with lower ethical standards that open subsidiaries in countries with higher ethical standards. For ex- ample, would U.S. consumers expect a higher or lower ethical standard from an Indian-based MNC operating in the United States? A re- lated research question could examine if the host consumers evaluated the child labor policies of wholly owned subsidiaries of MNCs differently than joint ventures with domestic organizations. With the recent rush by Western retailers (e.g., Wal-Mart and Metro) to penetrate the retail land- scape in India, are host consumers less demand- ing when the face of the venture is that of a domestic firm than when the venture is identi- fied by a Western brand name? Yet another re- search initiative could examine the response of home and host consumers towards different op- erationalizations of the relativist condition. Al- though this study used the minimum age of child labor as the stimulus, future research could ex- amine other issues such as treating employees fairly, wage issues, or corporate philanthropy to argue for the generalizability of this study. From the perspective of the consumer, it would be in- teresting to see whether consumers at the bottom of the economic pyramid in India have similar requirements for Western companies’ child labor policies as those consumers at the top of the pyra- mid. Finally, in order to help managers under- stand the level of social responsiveness exhibited by both the Indian and U.S. consumers to issues such as the minimum age for child labor, future research could examine the predicative ability of cultural orientation in an individual’s social

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orientation. Such a study would help MNC man- agers identify key characteristics of the target consumer group to subsequently maximize CSR effectiveness.

CONCLUSION

In summary, MNCs must decide whether to pursue a universalist or relativist approach for many aspects of their business policies and prac- tices overseas. This decision is particularly im- portant as organizations increasingly shift their focus to international markets; knowledge of cul- tural views of ethical norms will significantly affect the existence and performance of multi- national enterprises (Robertson and Fadil 1999). This study found that both home and host con- sumers prefer the universalist ethical approach to the minimum age of child labor when MNCs enter host markets with lower ethical standards. However, if MNCs opt to pursue the relativist ethical approach to the minimum age of child labor and adapt to the local market, explain- ing the adaptation to the consumer using the context of the host country’s business or so- cial environment improves consumer attitude for home and host consumers, and purchase in- tent for home consumers. For managers, this means that consumers of similar socio-economic background prefer that MNCs meet high stan- dards with their child labor programs and that compromise of these standards must be clearly communicated to the home and host consumer within the context of the local market. Fail- ure to do so can result in significant decrease in attitude toward the MNC, as well as de- creased purchase intent for both home and host consumers.

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APPENDIX A. Universalist and Relativist Treat- ments

Universalist Ethical Approach: LEADING U.S.-BASED SOFT DRINK MANUFACTURER’S EMPLOYMENT POLICY IN INDIA

In a recent press release in New Delhi, In- dia, Company X, a leading U.S.-based soft drink manufacturer, stated that it only hires employees who are 18 years of age or older in its offices and manufacturing plants in India. This practice is identical to U.S. employment policy, which clearly states Company X will only hire workers over 18 years of age.

The rationale for this hiring policy stems from Company X’s commitment to be a socially re- sponsible corporate citizen. Company X believes that children younger than 18 years of age need to focus on their education and co-curricular en- richment and should not be working full time. Since it began manufacturing and selling soft drinks in India over 10 years ago, Company X has enforced its U.S.-based employment policy and only hires employees who are 18 years old or older to work in its organization.

Relativist Ethical Approach: LEADING U.S.-BASED SOFT DRINK MANUFACTURER HIRES CHILDREN AT INDIAN MANUFACTURING PLANT

A report released by an independent nonprofit organization in India shows that Company X, a leading U.S.-based soft drink company, hired

children between the ages of 10 and 14 to work in its manufacturing factory outside of Calcutta, India. This agency’s report claims that most of the children work about 8 hours a day, 6 days a week.

The same report also included information on Company X’s employment policy at home in the United States, which clearly states that the com- pany will only hire employees who are 18 years of age or older. The rationale the U.S. hiring policy stems from Company X’s commitment to be a socially responsible corporate citizen. The company believes that children younger than 18 years of age need to focus on their education and co-curricular enrichment and not have to work full time. The nonprofit organization would like the public to know that hiring children clearly violates Company X’s home-based employment policy.

APPENDIX B. Context Treatment for Universal- ist and Relativist Approach

The journalist who reported the news story that you just read on Company X in India would like you to know that other U.S. and Indian soft drink manufacturers hire children as young as 12 from low-income families to work in their fac- tories. With families needing the supplemental incomes generated by children to pay for food, housing and health care, few laws governing child labor, and a general lack of enforcement of these laws, companies operating in India often hire children, making this a common business practice.

Gupta, Pirsch, and Girard 305

APPENDIX C. Psychometric Properties of the Measurement Model

Loading CA CR AVE

Precontext Attitude Scale 1: Based on what you have read, how negative or positive is your attitude

toward Company X? 0.888 .95 0.93 0.813

2: Would you be likely to purchase other products made by Company X? 0.902 3: Based on what you have read, do you think Company X is a good or bad

company? 0.915

Precontext Purchase Intent Scale 1: I would purchase Company X’s products. 0.929 .95 0.95 0.825 2: I would buy Company X’s products if I happened to see them in the store. 0.926 3: I would seek out Company X’s soft drinks in a store in order to purchase

them. 0.869

4: If the price, quality and taste of Company X’s soft drinks were comparable to my favorite brand of soft drink, I would purchase Company X’s soft drinks.

0.907

Postcontext Consumer Attitude 1: Based on what you have read, has your attitude toward Company X

changed? 0.842 .901 0.91 0.767

2: Based on what you have just read, would your intent to purchase other products made by Company X change?

0.885

3: Based on what you have just read, does this change your overall opinion of Company X?

0.899

Postcontext Consumer Purchase Intent 1: Based on what you know now, are you more or less likely to purchase

Company X’s products? 0.912 .954 0.94 0.805

2: Based on what you know now, how much more or less likely are you to buy Company X’s products if you happened to see them in the store?

0.909

3: Based on what you just read, how much more or less likely are you to seek out Company X’s soft drinks in a store in order to purchase them?

0.874

4: Based on what you just read, if the price, quality and taste of Company X’s soft drinks were comparable to your favorite brand of soft drink, how much more or less likely are you to purchase Company X’s soft drinks?

0.893

CA, Cronbach’s alpha; CR, construct reliability, AVE, average variance extracted.

APPENDIX D. Discriminant Validity of Constructs

Precontext Precontext Postcontext Postcontext attitude purchase intentions attitude purchase intentions

Precontext attitude 0.90 Precontext purchase intentions 0.90∗ 0.91 Postcontext attitude 0.29∗ 0.26∗ 0.88 Postcontext purchase intentions 0.36∗ 0.38∗ 0.89∗ 0.90

Note. Diagonal values are the square root of average variance extracted, which should be larger than interconstruct correlations (off- diagonal values) for discriminant validity. ∗Correlation is significant at the .01 level (two-tailed).

Copyright of Journal of Global Marketing is the property of Taylor & Francis Ltd and its content may not be

copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written

permission. However, users may print, download, or email articles for individual use.

4/10/2021 Monster drinks: Are the energy drinks marketed to children? - Los Angeles Times

https://www.latimes.com/food/dailydish/la-dd-monster-drinks-marketing-children-20140115-story.html 1/3

Monster drinks: Are the energy drinks marketed to children?

Monster Beverage Corp., the company that makes Monster energy drinks, is under investigation for allegedly marketing its products to children.  (David Paul Morris / Bloomberg)

By JENN HARRIS

JAN. 15, 2014 10:25 AM PT

Monster Beverage Corp., maker of the caffeinated energy drinks with the signature “M” on the cans, is under

investigation by the San Francisco city attorney and New York state attorney general to determine if it is

marketing its drinks to children.

Investigations into the Corona-based company began in 2012 and San Francisco City Atty. Dennis Herrera

filed suit against Monster last year, claiming the company misrepresents its harmful beverages and targets

minors with its marketing.

4/10/2021 Monster drinks: Are the energy drinks marketed to children? - Los Angeles Times

https://www.latimes.com/food/dailydish/la-dd-monster-drinks-marketing-children-20140115-story.html 2/3

Monster filed its own preemptive suit, asking a federal judge in California to stop the investigation, but that

suit was thrown out in December.

“Despite the known dangers highly-caffeinated products pose to young people’s health and safety, Monster

deliberately targets children with its marketing,” Herrera said in a statement. “The U.S. Senate Commerce

Committee has expressed grave concerns about aggressive marketing of these products to young people,

and the NCAA even prohibits member colleges from giving energy drinks to athletes because of the serious

safety risks.”

There are 160 miligrams of caffeine in a 16-ounce can of a Monster energy drink. There are 330 milligrams of

caffeine in a 16-ounce cup of Starbucks coffee, acccording to the Center for Science in the Public Interest.

Some of the marketing Herrara claims is geared toward children includes a “Monster Army” social network

featuring young children and the company’s promotion of the energy drinks at school events. In a

promotion called “Monster Energy Drink Player of the Game,” high school athletes are photographed with

two four-packs of 16-ounce cans of the energy drinks.

We reached out to Monster Beverage Corp. for comment, but have yet to hear back. Tammy Taylor, a

spokeswoman for the company, told the Associated Press the drinks were not marketed to children and did

not contain high amounts of caffeine.

A warning label on the Monster cans asks consumers to drink responsibly, to not consume more than three

cans per day and warns the beverage is not recommended for children, pregnant women or people sensitive

to caffeine.

ADVERTISING

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4/10/2021 Monster drinks: Are the energy drinks marketed to children? - Los Angeles Times

https://www.latimes.com/food/dailydish/la-dd-monster-drinks-marketing-children-20140115-story.html 3/3

If the two prosecutors’ offices are successful, Monster could be forced to stop the marketing campaigns in

question and pay civil penalties and restitution as a result of unfair business practices.

Get Paid to Take Surveys Online. Start Now! By Survey Junkie

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4/10/2021 Update: Hyundai Apologizes For Car Ad Depicting Attempted Suicide

https://www.forbes.com/sites/matthewherper/2013/04/25/a-hyundai-car-ad-depicts-suicide-it-is-so-wrong-i-cant-embed-it-in-this-post/?sh=7d03af87554d 1/3

Healthcare I cover science and medicine, and believe this is biology's century.

Update: Hyundai Apologizes For Car Ad

Depicting Attempted Suicide Matthew Herper Former Staff

This article is more than 7 years old.

Hyundai Europe released an advertisement depicting a man attempting to kill himself via

carbon monoxide poisoning with one of its cars, but failing because the vehicle's emissions

are so clean. I asked Hyundai North America if the ad, titled "Pipe Job," was for real and if

so if they could please explain it. The spokesman emailed back that the video was created

in Europe by a European agency, Innocean Europe. (Update: It's an in-house ad

agency). The spokesman said that Hyundai Motor North America was not involved in any

way in its production or original posting. Then he passed on the following statement from

Hyundai Europe:

Normally, when writing about an advert, I would embed the thing in this post. But I'm not

going to. Those who feel the need to see this ad can go here. The link is now dead. I'm

writing about it because I'm hoping this tarnishes Hyundai's brand.

What's wrong with the ad? There are years of data showing that careless depictions of

suicide can cause more suicides to happen. From a public health perspective, selling

product is simply not the place to start a conversation on this topic. Cue the popular British

doctor blogger Ben Goldacre:

We understand that some people may have found the iX35 video offensive. We are very sorry if we have offended anyone. We have taken the video down and have no intention of using it in any of our advertising or marketing.

It has been shown repeatedly that suicide increases in the month after a front page suicide story. There is also evidence that the effect is bigger for

4/10/2021 Update: Hyundai Apologizes For Car Ad Depicting Attempted Suicide

https://www.forbes.com/sites/matthewherper/2013/04/25/a-hyundai-car-ad-depicts-suicide-it-is-so-wrong-i-cant-embed-it-in-this-post/?sh=7d03af87554d 2/3

Goldacre provides a link to the Samaritan Foundation's guidelines for reporting on suicide.

The advertisement fails to give watchers any idea that there is help out there, and succeeds

in delivering a pretty clear message about how to conduct a suicide. It also does a pretty

good job of not conveying any of the harm this suicide would do to others, or the ways in

which this anonymous man could have sought other solutions, including medicines and

therapy, for getting on with his life.

Those consequences are made crystal clear, though, by a beautiful piece written by Holly

Brockwell, a digital copywriter in London who runs an advertising blog called Copybot. Her

father died when she was a small child in a similar manner to that depicted in the Hyundai

ad. She shares his suicide note, and her feelings upon seeing Hyundai's ad.

I really recommend reading that piece in full. And I recommend making sure you have

enough time to give yourself a few minutes after you read it -- because you may need them.

Update: Hyundai North America issued the following statement:

famous people and gruesome attempts. You may want to remember that fact for later.

Details matter, as ever. Overdoses increased by 17% in the week after a prominent overdose on Casualty (watched by 22% of the population at the time), and paracetamol overdoses went up by more than others. In 1998 the Hong Kong media reported heavily on a case of carbon monoxide poisoning by a very specific method, using a charcoal burner. In the 10 months preceeding the reports, there had been no such suicides. In November there were 3; then in December there were 10; and over the next year there were 40. You may want to remember that story for later.

I understand better than most people the need to do something newsworthy, something talkable, even something outrageous to get those all-important viewing figures. What I don’t understand is why a group of strangers have just brought me to tears in order to sell me a car. Why I had to be reminded of the awful moment I knew I’d never see my dad again, and the moments since that he hasn’t been there. That birthday party. Results day. Graduation.

4/10/2021 Update: Hyundai Apologizes For Car Ad Depicting Attempted Suicide

https://www.forbes.com/sites/matthewherper/2013/04/25/a-hyundai-car-ad-depicts-suicide-it-is-so-wrong-i-cant-embed-it-in-this-post/?sh=7d03af87554d 3/3

I also got this statement from the American Foundation for Suicide Prevention:

Update 2: Hyundai sent along this expanded statement.

Matthew Herper

I believe this is biology's century. I've covered science and medicine for Forbes from the Human Genome Project

through Vioxx to the blossoming DNA technology changing… Read More

We at Hyundai Motor America are shocked and saddened by the depiction of a suicide attempt in an inappropriate UK video featuring a Hyundai. Suicide merits thoughtful discussion, not this type of treatment.

"We know from research that graphic depictions of suicide in the media can inadvertently lead to further suicides, a phenomenon known as contagion," said Robert Gebbia, executive director for the American Foundation for Suicide Prevention. "This advertisement was particularly graphic and potentially dangerous. We are pleased that Hyundai has decided to pull this campaign. That said, we hope that advertisers and companies realize that suicide is a worldwide health problem that claims more than 1 million lives each year, taking an enormous toll on family, friends, co-workers and entire communities and it should not be used to sell products."

Hyundai Motor deeply and sincerely apologizes for the offensive viral ad.

The ad was created by an affiliate advertising agency, Innocean Europe, without Hyundai's request or approval. It runs counter to our values as a company and as members of the community. We are very sorry for any offense or distress the video caused.

More to the point, Hyundai apologizes to those who have been personally impacted by tragedy.

March 31, 2015

MATTEL: PLAYING WITH ETHICS

We are all familiar with the iconic Barbie dolls and Hot Wheels cars of Mattel, Inc. As the world’s largest toy company, Mattel has a responsibility to its stakeholders to ensure the safety of its products. Although it was previously known for its strong ethical framework, Mattel had a major setback in 2007. Recalls of millions of toys sparked questions regarding Mattel’s supplier relations and overall integrity as a firm.

Mattel was incorporated in 1948 in with headquarters in Los Angeles, California. Ruth Handler, Elliot Handler, and Matt Matson originally founded the company. It quickly grew from a startup toy company run out of a garage, to being the largest toy company in the world. The introduction of the Barbie doll in 1959 helped put Mattel on the map. It was a three dimensional figure named after Ruth and Elliot’s daughter, Barbara. Only a year later, Mattel became a publicly owned company and was named a Fortune 500 company by 1965. Continuing to dominate the toy market, Mattel introduced Hot Wheels cars in 1968. These toy cars expanded Mattel’s reach in the market and created a distinguished image. Mattel grew impressively throughout the following decades, as it released one quintessential product line after another. But, because of the ever-increasing demand for its toys, Mattel looked to Asian manufacturing plants for support. The cost of labor overseas was much cheaper and more ideal for a rapidly growing company such as Mattel. However, in 1997, it established the Global Manufacturing Principles. It was the first consumer products company to enforce an ongoing commitment of responsible manufacturing practices. The Global Manufacturing Principles provided a framework to ensure that manufacturing standards were consistently being met. Mattel also formed the Mattel Independent Monitoring Council whose purpose was to audit the Chinese manufacturing plants. With programs like these in place, Mattel established a reputation of moral integrity and commitment. It took pride in its corporate social responsibility. Upholding this reputation, Mattel made great strides by exercising philanthropic contributions and activities, and even phasing out harmful chemicals called phthalates from its toys. In 2003 Mattel received a Corporate Responsibility award from the US fund for Unicef.

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Because of its sustained reputation and ethical framework, it was a major shock to everyone when Mattel recalled nearly one million of its toys in the August of 2007. The toys were contaminated with excessive amounts of lead based paint, making them hazardous to children. The toys were made by one of the Chinese manufacturing plants, Lee Der Industrial. Mattel had been a partner with Lee Der for over 15 years. Mattel’s independent safety checks on Chinese manufacturers did not prevent the recall. European retailers first discovered the lead painted products in July of 2007. When Mattel was notified of the hazard, it stopped operations and initiated an investigation. It decided to recall the products with high-level concentrations of lead paint. When the co-owner and manager of Lee Der, Zhang Shuhong, learned that Mattel had ended the business relationship, he committed suicide. Mattel originally viewed Lee Der as a reliable supplier, so it delegated the responsibility to control the quality of the paint to the Chinese manufacturer. “Chinese manufacturers still continue to use colors containing lead because it is cheaper, easier to handle, and readily available” (Roloff, Aβländer). Lee Der had the available equipment to test the amount of lead in the paint, “it seems that Zhang either had confidence in the fake quality inspection certificates…or ignored contradictory results on purpose” (Roloff, Aβländer). Unfortunately, things continued to get worse with Mattel’s Chinese suppliers. Once again, excessive amounts of led was found in the paint of toys made by another Chinese supplier, and more recalls followed. Mattel recalled 19 million toys in total. A lot of the recalled toys were actually due to a flawed design, which included dangerous magnets that posed a serious choking hazard. This had nothing to do with the foreign suppliers; it was Mattel’s fault this time. “Before the recall was announced, Mattel began an advertising campaign…aimed at reassuring consumers of its commitment to product safety” (Story, Barboza). The summer of 2007 was a rough one for Mattel. The multiple recalls caused Mattel’s shares to drop, and with it the faith of the integrity of the company. Retailers began to implement third party safety checks on Mattel as well as its manufacturers. The company’s reputation was severely damaged.

REPORT THIS AD To further analyze the ethical framework of Mattel, I will refer to Kantian ethics. As a Deontologist, Immanuel Kant emphasizes moral duties as opposed to consequences. He believes that one “is only truly moral if he or she is honest because being honest is right

(one’s duty)” (Bowie). Kant focuses on the categorical imperative, which is split up into three formulations. The first formulation of Kant’s categorical imperative is “act only on maxims which you can will to be universal laws of nature” (Bowie). This is essentially a test to see if the action is moral. If the action was universal, would it be logically coherent and able to exist? In the case of Mattel, the action of producing products that are dangerous to children is immoral. It is Mattel’s moral duty to provide consumers with toys that are safe. By not following through and enforcing better safety checks, Mattel allowed its unsafe products to enter the consumer market, endangering millions of children. It is the act of selling unsafe products to children that Kant would view as immoral, not because of the consequences of the action. Lee Der and the other Chinese manufacturers acted immoral in this way also by using paint with excessive amount of lead.

Kant believes in treating stakeholders as persons. His “respect for persons” principle suggests that the humanity in a person should be treated “as an ends, and never as a means merely” (Bowie). In this second formulation of the categorical imperative, Kantian ethics proposes that stakeholders should not be coerced or deceived. By selling toys with unsafe magnetic parts even after it guaranteed the safety of its products, Mattel deceived its stakeholders. Once again, Kant would view this as a violation of the categorical imperative. This formulation could also apply to the business relationship between Mattel and its Chinese suppliers. If the suppliers did, in fact, knowingly substitute the appropriate paint with the lead based paint, they deceived their stakeholder, Mattel. Another important part of this formulation is autonomy. It is evident that in this case Mattel’s business relationship with its suppliers is dysfunctional. “Mattel’s strategy to outsource a part of its production made the company vulnerable to abuse, because now it had to control a long supply chain” (Roloff, Aβländer). In this way, Mattel’s executive autonomy was threatened by external factors such as Lee Der’s non-compliance. “In sharing the control with suppliers, Mattel became Corporate Autonomy and Buyer–Supplier Relationships dependent on their integrity and corporate culture. In the case discussed, this resulted in the loss of Mattel’s autonomy” (Roloff, Aβländer).

According to Kant’s ideals, the third formulation of the categorical imperative says, “so act as if you were a member of an ideal kingdom of ends in which you were both the subject and sovereign at the same time” (Bowie). This essentially means to treat the business firm as a moral community. Most importantly, this formulation encourages the firm to “consider the interests of all the affected stakeholders in any decision it makes” (Bowie). It is apparent that neither Mattel nor its foreign suppliers considered all stakeholders in their decisions to produce hazardous products.

REPORT THIS AD There are several issues here. First, Mattel did not implement enough controls over its suppliers. This lack of control created opportunity for the Asian manufacturing plants to deviate from safety standards without Mattel catching on. The second issue is that the suppliers themselves, especially Lee Der, used dangerous levels of lead based paint to manufacture Mattel’s toys. Mattel’s response to the Lee Der manufacturing incident was somewhat ethical in a Kantian perspective. Although Mattel ceased all business relations

with Lee Der, it still continued to do business with its other foreign suppliers without implementing better controls. This resulted in more product recalls due to the use of excessive lead based paint. Mattel itself also designed unsafe products, by including small magnetic pieces in the toys that were hazardous to small children.

Fortunately, Mattel was finally able to reconsider its ethical framework, and bounce back from these issues. In fact, it was named one of the most ethical companies in the world. Today, Mattel’s code of conduct states, “In business, we may not always be able to choose the challenges we face, the problems we must solve, the obstacles we must overcome and the opportunities we may embrace, but we do have a choice in how we make these decisions. Every Mattel employee is responsible for acting with integrity, treating others with dignity and respect, being honest and fair in all transactions, and consistently striving to do the right thing.” This reinforces their moral duty as a toy company.

Works Cited:

 Bowie, Norman. “A Kantian Approach to Business Ethics.” Print.  “Code of Conduct.” Mattel. Web. <http://corporate.mattel.com/about-

us/ethics.aspx&gt;.  “Mattel History.” Mattel. Web. <http://corporate.mattel.com/about-

us/history/mattel_history.pdf&gt;.  “Mattel, Inc: The Lead Paint Recall.” Center For Digital Strategies. Web.

<http://digitalstrategies.tuck.dartmouth.edu/cds-uploads/case- studies/pdf/MattelRecall6-0033_1.pdf&gt;.

 Roloff, Julia, and Michael Aßländer. “Corporate Autonomy and Buyer-Supplier Relationships: The Case of Unsafe Mattel Toys.” Journal of Business Ethics (2010). Web. <http://download.springer.com/static/pdf/516/art%3A10.1007%2Fs10551-010- 0522- 1.pdf?auth66=1427676236_fff41298d9f3c71a911adb8b288389aa&ext=.pdf&gt;.

 Story, Louise, and David Barboza. “Mattel Recalls 19 Million Toys Sent From China.” The New York Times 15 Aug. 2007. Web. <http://sicca-ca.org/PDFs/MattelRecall19.pdf&gt;.

 Story, Louise. “Lead Paint Prompts Mattel to Recall 967,000 Toys.” The New York Times 2 Aug. 2007. Web. <http://www.nytimes.com/2007/08/02/business/02toy.html?adxnnl=1&adxnnlx= 1427717112- PchoPfoAS3mhzyiQrWwHg>.

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A Seemingly Bloodstained Kent State Sweatshirt

The Most Offensive Urban Outfitters Products to Ever Exist BrigitteNajarian Updated March 5, 2020  331.1k views

Urban Outfitters is no stranger to controversy. The brand has made several missteps over the years, from seemingly tasteless clothing to

designs that appear to appropriate cultures. These are some of the most questionable items they've ever offered for sale.

Photo: Urban Outfitters

...more

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This vintage sweatshirt seemed to make a crude reference to the 1970 Kent State shooting, though the brand said that was "never their intention."

A Yellow Star Of David Shirt

Photo: Urban Outfitters

Photo: Urban Outfitters

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When Urban Outfitters began selling a yellow tee seemingly marked with the Star of David, the Anti-Defamation League released a statement: "We find this use of symbolism to be extremely distasteful and offensive, and we are outraged that your company would make this product available to your customers."

A T-Shirt With An 'Obama/Black' Option

Photo: Urban Outfitters

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One T-shirt came in two color combinations: "White/Charcoal" and "Obama/Black." 

Pill Bottle-Shaped Alcohol Paraphernalia

UO's line of shot glasses, pint glasses, and flasks resembling prescription pill bottles were pulled after Kentucky Governor Steve Beshear complained.

Photo: Urban Outfitters

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A 'Ghettopoly' Game

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This riff on Monopoly included racist imagery, including bonus cards that said, "You got yo whole neighborhood addicted to crack. Collect $50." 

St. Patrick's Day Apparel Featuring Irish Stereotypes

Photo: Urban Outfitters

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The Congressional Ad Hoc Committee on Irish Affairs sent a letter to Urban Outfitters complaining about clothing depicting unflattering stereotypes of the Irish. 

A T-Shirt Showing A Palestinian Youth And Reading 'Victimized'

Photo: Urban Outfitters / Urban Outfitters

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An Urban Outfitters T-shirt showing a Palestinian youth carrying an AK-47 assault rifle over the word "Victimized" upset consumers in 2008.

A T-Shirt Reading 'Eat Less'

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This tee was pulled from UO's online shop but not their stores.

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A Transphobic Greeting Card

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The LGBTQ+ community expressed their disgust after Urban Outfitters began selling this greeting card.

'Navajo' Fashion

UO ilegally printed the name of the Navajo Nation on a variety of items. The company settled with the tribe in 2016.

Photo: Urban Outfitters

Photo: Urban Outfitters

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A 'New Mexico: Cleaner Than Regular Mexico' T-Shirt

This tee stirred up controversy in 2005.

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Ganesh Socks

The socks feature a design with the image of Hindu deity, Ganesh. The Hindu community was not pleased. In response, UO apologized and pulled the socks.

Photo: Urban Outfitters

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Allegedly Stolen Jewelry Designs

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Urban Outfitters began selling a line of jewelry nearly identical to the work of Chicago-based jewelry designer Stevie Koerner. After she spoke up, UO denied they had taken her work.

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Research Article Choking Hazards: Are Current Product Testing Methods for Small Parts Adequate?

Athena Neofotistos,1,2 Nancy Cowles,2 and Ragini Sharma2

1Roosevelt University, Chicago, IL, USA 2Kids In Danger, Chicago, IL, USA

Correspondence should be addressed to Athena Neofotistos; [email protected]

Received 30 July 2016; Revised 21 December 2016; Accepted 21 February 2017; Published 28 May 2017

Academic Editor: Samuel Menahem

Copyright © 2017 Athena Neofotistos et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Choking on small parts remains one of the leading causes of death and injury in infants and toddlers. The current method of testing for small parts, created by the Consumer Product Safety Commission (CPSC), has become outdated and has yet to be changed despite the many deaths and injuries of children. The method uses a device called the small parts test fixture (SPTF) that is supposed to mimic the size of a fully expanded throat of a toddler. If a product does not fit inside the cavity of the SPTF, then it is deemed safe to play with because it “will not fit” in the esophagus of a child. The present study obtains a dataset of products recalled by the CPSC within the last twelve years due to choking hazards/incidents and discovers that a noteworthy amount of the children’s products have parts that are larger than the fixture size and are still capable of causing choking. This study indicates that a larger SPTF size must be implemented by the CPSC in order to prevent future choking incidents on small parts.

1. Introduction

Choking on small parts is one of the leading, yet preventable causes of injury and death in infants and small children [1]. Children’s products contain small parts or release small parts through detachment or breakage during normal play, which pose choking hazards and may be undetectable to parents and caregivers. Small parts have caused choking-related deaths in over 90 children between 2001 and 2012, as cited in the 28th Annual Survey of Toy Safety [2]. Limiting the prevalence of choking and related occurrences is an important public health goal. The current federal rule requiring the testing of small parts protects children under three years of age, which is the age group most likely to mouth objects [3]. The risk of choking can potentially be decreased by requiring that products for children under the age of three meet a new standard for size and breakability.

The small parts test regulation is required by the Fed- eral Hazardous Substances Act under the Code of Federal Regulation (CFR), premised to prevent death and injuries to children under the age of three from choking on, inhaling,

or swallowing small objects they may put in their mouths [4]. The current testing method to prevent choking hazards employs an apparatus dubbed the small parts test fixture (SPTF), created by the US Consumer Product Safety Com- mission (CPSC). The SPTF measures whether a toy is too large to enter a child’s esophagus and, thus, can be played with safely.

If the object fits inside the cavity of the SPTF, it is too small and can potentially be lodged inside the throat of the child and cause choking. The SPTF measures 1 inch to 2.25 inches in height, slanted on a diagonal plane, and 1.25 inches in diameter at its current size. According to the American Academy of Pediatrics, this range would make choking on a small part highly improbable as it approximates the size of a fully expanded pharynx of an infant [5]. However, current evidence and statistics confirm that some products larger than the size of the SPTF have caused choking.

One of the first studies evaluating the current size of the SPTF and the injuries and deaths of children due to the exposure of small parts was released more than two decades ago. Meyers and Bond (1989) evaluated a compilation

Hindawi International Journal of Pediatrics Volume 2017, Article ID 4705618, 4 pages https://doi.org/10.1155/2017/4705618

2 International Journal of Pediatrics

of 195 choking incidents reported by the CPSC between July 1973 and May 1983, roughly a ten-year span, and found that 57% of the children’s products whose size was available had diameters larger than the 1.25-inch standard [6]. Even with the statistics provided by Meyers and Bond, no changes have been proposed to the testing method since that time. It has been documented in subsequent studies that objects larger than the current size of the SPTF have caused choking following this article as manifested by the numerous recalls and injuries listed on the CPSC website, individual parent reports/complaints, and other related children’s safety research projects [7, 8]. Other case examples of the hidden dangers posed by children’s products have been reviewed in Children and Injuries by Frost, Ed.D. [9].

The objective of the present study is to provide the most up-to-date information on choking statistics and examples of children’s products that are larger than the current fixture size that yielded a choking or related hazard. By providing these relevant statistics, it epitomizes that a larger test fixture could be the crucial next step in the prevention of choking occurrences.

In 2006, Playskool, Inc., voluntarily recalled their Team Talkin’ Tool Bench after receiving reports of two boys under two years old who suffocated on the toy set’s oversized nails, measuring 0.75 inches longer than the current SPTF size [10]. In 2007, an eight-year-old boy died after choking on a toy dart that measured 2.5 inches long and 0.75 inches wide, again, longer than the current SPTF size [11]. An 11-month- old boy also choked on a toy nail, part of the Little Tikes’ Toy Tool Set, after it became forcefully lodged in his throat and prompted the original recall in 2009 [12]. Two additional choking incidents were reported even after the original recall of this product [13]. These are just a few examples of choking occurrences that resulted in injury and even death from children’s products that measured larger in size than the current SPTF.

The current small part size may also not be adequately preventing children from choking due to the fact that, over the last five decades, children have grown taller and bigger in size. For example, according to Professor Mitch Blair, the average child’s height has increased by 1 cm to 3 cm throughout every decade over the last 50 years. Thus, children on average have grown between 5 cm and 15 cm taller over the last five decades [14]. This means that one can assume that the child’s organs, such as their esophagus, have grown exponentially with the height as well. Since the recommendation of the Academy of Pediatrics was made in 1987 regarding the size of an infant/toddler’s esophagus to create the current SPTF size, there has been evidence that children have been growing taller since that time (roughly 30 years since the article was published) (see [6]). The current small part size has not adapted to the increase in size of children; thus a new and improved size (a larger one) may be suitable in preventing further choking incidents.

The present study, assessed by Kids In Danger (KID), sought to gather up-to-date information about the sizes of the products involved in the choking-related recalls in the past twelve years and whether the small parts test fixture is adequate in preventing choking and other related hazards.

2. Method

KID reviewed 303 recalled products publically listed by the CPSC that presented choking hazards to infants and young children due to small parts between January 1, 2003, and December 31, 2014 (This study is a thorough review of official recalls reported by the CPSC between January 1st, 2003, to December 31st, 2014. Individual incidents and complaints by parents are not included in this study.). Manufacturers tested these products and concluded that they were large enough and durable enough (i.e., would not break) for safe play prior to placement on the market. The products were eventually recalled due to breakage or even the original, intact product causing choking and related incidents. KID obtained the total number of recalled products and examined them by product categories and the kind of choking hazard caused by each product. Most importantly, KID focused on the sizes of the product or piece of the product that posed hazards and/or caused choking in proportion to the current size of the SPTF. Lastly, KID also reviewed the total number of incidents caused by the recalled products. Choking “incidents” include any interaction with the mouth, including mouthing, gagging, choking, ingestion, aspiration, or coughing of the product by the child. KID noted the various types of incidents that were caused by the products involved within the dataset, which are listed below. The authors of this article organized the data stated above in a spreadsheet (i.e., type of product and what kind of choking hazard the specific product caused), thus allowing ease of access to product details.

3. Results

Analyses show that 48.8% of the products within the dataset fall under the toys category (This study did not include outdoor toys such as bikes, battery-powered life-size electric vehicles, and trampolines.), 27.7% of the products fall under the clothing category (This study did not include glasses frames or sunglasses.), 18.9% of the products fall under the nursery category (This study did not include strollers, baby bouncers, exersaucers, furniture (cribs, sofas, and bean bag chairs), blankets, or high chairs.), and the final 4.6% of the products fall under the books and art supplies category. This categorizes the kinds of products that were listed on the CPSC website as having the potential to cause choking or have caused choking and related incidents.

With the current size of the SPTF, a notable quantity of the products within the dataset did not fit inside the cavity of the tube. Research shows that 17.1% of the products in the dataset were larger than the current fixture size and still posed a choking threat or caused choking and related occurrences in some instances. The additional 82.8% of the products in the dataset were smaller than the SPTF.

As described in Section 2, the next matter that KID analyzed was the number of incidents that occurred due to the reported products causing choking and related incidents. Analyses show that a total of 211 incidents were caused by these recalled products that occurred between January 1st, 2003, through December 31st, 2014. These incidents were

International Journal of Pediatrics 3

Table 1: Type and occurrence of choking incidents.

Percent (%) Choking 46.91 Mouthing 27.96 Gagging 21.33 Ingestion 2.37 Coughing 0.94 Aspiration 0.50

caused by 63 of the 303 products, or 21% of the total products. Fifty-six of these 63 products were marketed for children under the age of three. Table 1 categorizes the incidents by type.

Four of the choking incidents above resulted in death; three of the four deaths were caused by an object that was larger than the dimensions of the SPTF. Two of the deaths resulted in two children who choked on toy nails, as part of Playskool, Inc.’s Team Talkin’ Toy Tool Bench, which measured 3 inches long. These toy nails were 0.75 inches longer than the current SPTF length.

4. Discussion

Statistics from the present study indicate that despite meeting the testing requirements via third-party testing prior to distribution, certain children’s products still posed chok- ing hazards and caused choking and even death in some instances. More research on the SPTF is necessary in order to determine whether the fixture should be enlarged. For instance, data from health care providers in the field and even complaints from parents/caregivers might indicate an even larger proportion of choking incidents than reported by the CPSC alone. With the data shown above, however, the current size of the SPTF may be one cause of not adequately preventing children from choking on children’s products. Although there may be other factors involved, the SPTF was created with the sole purpose of preventing choking in children. Some products within the dataset that were larger than the SPTF have posed choking hazards and even caused choking and related injuries including death between 2003 and 2014, showing that its current size may not effectively prevent choking.

Overall, the current SPTF size has thus far not completely ruled out all choking and related hazards within children’s products as exemplified through the numerous hazards, injuries, and deaths presented in this study. A larger test fixture would be the first step in generating the capacity to reduce the number of choking incidents in infants and toddlers. This is because it would abolish manufacturers from including parts even larger than the current size of a “small part” within their products. By doing so, it takes into account that small children can still potentially choke on small parts, but, by increasing the size of the SPTF, it can reduce the risk of choking and related hazards. A number of products within the dataset contained parts that were larger than the SPTF and still posed a choking threat. Therefore, a larger SPTF could

theoretically rule out more potential risks and possibilities of choking.

Additional Points

Statement of Knowledge. The SPTF has been implemented by the CPSC to measure for small parts and identify their presence on product labeling for the prevention of choking. Meyers and Bond (1989) discussed the inability of the SPTF to accurately prevent choking because objects larger than the SPTF have caused choking in children. No changes have been made by the CPSC to the small parts test fixture since the 1989 publication. Statement of Addition to the Public. This study provides up to date statistics showing that the current SPTF size does not adequately prevent choking. Three of the four deaths in this study were caused by an object that was larger than the current SPTF size. This study shows that enlarging the SPTF can help prevent choking in the future by eliminating slightly larger parts from children’s products.

Conflicts of Interest

The authors declare that they have no conflicts of interest.

References

[1] American Academy of Pediatrics, “American academy of pedi- atrics releases new policy statement on choking,” Pediatrics, vol. 125, no. 3, pp. 601–607, 2010.

[2] U.S. PIRG, Trouble in Toyland, Jenny Levin, Washington, DC, USA, 28th edition, 2013.

[3] V. A. Whyte, P. V. Mcdonald, R. Baillargeon, and K. M. Newell, “Mouthing and grasping of objects by young infants,” Ecological Psychology, vol. 6, no. 3, pp. 205–218, 1994.

[4] Cornell University Law School, “16 CFR (Code of Federal Regulations) 1500 and 1500.50-53: Regulations for Hazardous Substances and Articles: Adminstration and Enforcement Reg- ulations”.

[5] American Academy of Pediatrics and the Committee on Accident and Poison Prevention, “Aspirated objects. Injury Control for Children and Youth,” 1987, http://archpedi.jaman- etwork.com/article.aspx?articleid=514781.

[6] A. F. Meyers and M. Bond, “Choking on a ’large’ object: applications for regulation and practice,” American Journal of Diseases of Children, vol. 143, no. 10, pp. 1132-1133, 1989.

[7] M. Corrigan, “Children’s Products: An Analysis of Small Parts Regulation and Choking Hazards, Stinson Leonard Street,” 2016, https://www.stinson.com/Resources/Insights/2016_In- sights/Children_s_Products__An_Analysis_of_Small_Parts_ Regulation_and_Choking_Hazards.aspx.

[8] G. Rider and C. L. Wilson, “Small parts aspiration, ingestion, and choking in small children: findings of the small parts research project,” Risk Analysis, vol. 16, no. 3, pp. 321–330, 1996.

[9] J. L. Frost, Children and Injuries, Lawyers & Judges Publishing Company, Tucson, Ariz, USA, 2001.

[10] CPSC, “Playskool voluntarily recalls toy tool benches after the death of two toddlers,” 2006, http://www.cpsc.gov/en/Recalls/ /2006/Playskool-Voluntarily-Recalls-Toy-Tool-Benches-after- the-Death-of-Two-Toddlers/.

4 International Journal of Pediatrics

[11] CPSC, “Child’s asphyxiation deaths prompts recall of toy dart gun play set by OKK trading,” 2009, http://www.cpsc.gov/en/ Recalls/2010/Childs-Asphyxiation-Death-Prompts-Recall-of- Toy-Dart-Gun-Play-Set-by-OKK-Trading/.

[12] CPSC, “Little tikes recalls children’s toy workshop sets and trucks due to choking hazard,” 2014, http://www.cpsc.gov/en/ Recalls/2009/Little-Tikes-Recalls-Childrens-Toy-Workshop- Sets-and-Trucks-Due-to-Choking-Hazard/.

[13] CPSC, “Little Tikes Expands Recall of Toy Workshop and Tool Sets Due to Choking Hazard,” 2011, http://www.cpsc.gov/en/ Recalls/2011/Little-Tikes-Expands-Recall-of-Toy-Workshop- and-Tool-Sets-Due-to-Choking-Hazard/.

[14] A. Hodgekiss, “They’re taller, better fed and have fewer fillings; so why are today’s children less healthy than 50 years ago. daily mail,” 2016, http://www.dailymail.co.uk/health/article- 1395040/Theyre-taller-better-fed-fewer-fillings–todays-chil- dren-LESS-healthy-50-years-ago.html.

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4/10/2021 The Never-Ending War on Fake Reviews | The New Yorker

https://www.newyorker.com/tech/annals-of-technology/the-never-ending-war-on-fake-reviews 1/2

“T

Annals of Technology

The Never-Ending War on Fake Reviews

By Simon Parkin May 31, 2018

edious and helpless prose” is how, in 1881, a writer for The Atlantic described “Leaves of Grass,” Walt Whitman’s �rst

volume of poetry. It was a view shared by other contemporary critics. One called the book “intensely vulgar, nay,

absolutely beastly,” before bluntly refusing to tell readers where it might be bought. Whitman did not idly nurse his wounds.

Instead, he anonymously wrote numerous �attering appraisals of his work, to even the balance. A three-thousand-word example,

published in the September, 1855, edition of the United States Review, opens with the breathless declaration, “An American bard

at last!” Whitman goes on to extravagantly applaud his dress sense (“manly and free”), his posture (“strong and erect”), his voice

(“bringing hope and prophecy to the generous races of young and old”), and his compassion (“the largest lover and sympathizer

that has appeared in literature.”)

For online retailers, the �ght against the practice known as “review brushing” is now a major part of the business. Illustration by Tim Lahan

4/10/2021 The Never-Ending War on Fake Reviews | The New Yorker

https://www.newyorker.com/tech/annals-of-technology/the-never-ending-war-on-fake-reviews 2/2

The temptation to pose as an impartial reviewer of one’s own work will be familiar to many authors across history. But the Internet

has, as with all vices, smoothed the transition from temptation to action. When presented with the user-review box on Amazon,

it’s a simple matter for an author to tap on the �ve-star icon and offer an “Exquisite” or a “Triumph!” For those caught in the act,

the humiliation can be severe. In 2012, the crime writer R. J. Ellory was accused on Twitter by one of his rivals, Jeremy Duns, of

writing “long, purple tributes to his own work on Amazon.” Under the pseudonym Nicodemus Jones, Duns said, Ellory had

described his book “A Quiet Belief in Angels” as “magni�cent” and “poetic,” even going so far as to warn potential buyers to

“ignore all dissenters and naysayers.” Ellory, Duns claimed, had not stopped at self-praise; he had also posted negative reviews of

other authors’ work. In a statement issued to the Guardian, Ellory admitted guilt. “The recent reviews—both positive and negative

—that have been posted on my Amazon accounts are my responsibility and my responsibility alone,” he wrote. “I wholeheartedly

regret the lapse of judgment.”

Simon Parkin is a contributing writer to The New Yorker and the author of “Death by Video Game: Danger, Pleasure, and Obsession on the Virtual Frontline.”

More: Reviews Internet Amazon

4/10/2021 Sorry About That: Wells Fargo to End Ads Suggesting Science Over Arts - The New York Times

https://www.nytimes.com/2016/09/06/theater/sorry-about-that-wells-fargo-to-end-ads-suggesting-science-over-arts.html 1/2

By Michael Paulson

Sept. 5, 2016

Wells Fargo, the financial services giant immortalized in lyrics to “The Music Man,” has apologized for advertisements that seemed to suggest that teenagers should set aside their artistic dreams and choose careers in science.

The print ads, promoting a “teen financial education day” program, featured an image of a smiling young woman with the headline: “A ballerina yesterday. An engineer today.” And a young man was shown with the headline: “An actor yesterday. A botanist today.” Each picture featured the tagline, “Let’s get them ready for tomorrow.”

A number of prominent artists took to social media over the holiday weekend to voice their objections to the implicit career guidance, including the songwriter Robert Lopez(“Frozen”), the singer Josh Groban, and the actors Laura Benanti (“She Loves Me”), Alex Brightman (“School of Rock”), Michael Cerveris (“Fun Home”), Donna Lynn Champlin(“Crazy Ex-Girlfriend”), Cynthia Erivo (“The Color Purple”), Heather Headley (“Aida”), Zachary Levi (“She Loves Me”), Andy Mientus (“Smash”), Anthony Rapp (“Rent”), Alexandra Silber (“Fiddler on the Roof”), Wesley Taylor (“Smash”) and Jenna Ushkowitz(“Glee”).

Sorry About That: Wells Fargo to End Ads Suggesting Science Over Arts

Josh Groban was among those using social media to voice their objections to the implicit career guidance. Evan Agostini/Invision, via Associated Press

4/10/2021 Sorry About That: Wells Fargo to End Ads Suggesting Science Over Arts - The New York Times

https://www.nytimes.com/2016/09/06/theater/sorry-about-that-wells-fargo-to-end-ads-suggesting-science-over-arts.html 2/2

Wells Fargo, also on Twitter, then issued an apology, saying the company “is deeply committed to the arts” and that the ads “were intended to celebrate all the aspirations of young people and fell short of that goal.” The company said it would change the advertising campaign.

A version of this article appears in print on , Section C, Page 3 of the New York edition with the headline: Wells Fargo to End Ads for

Science Over Arts

4/12/2021 2.5 million pounds of taquitos recalled for salmonella, listeria concerns

https://www.wtxl.com/news/million-pounds-of-taquitos-recalled-for-salmonella-listeria-concerns/article_0ce2f7ea-d62c-11e8-b47a-c3af1fe651bf.html 1/5

By: By Matt Quillen Posted at 2:55 PM, Oct 22, 2018 and last updated 11:04 AM, Oct 22, 2018

(RNN) - Ruiz Food Products announced it was recalling ready-to-eat meat and

poultry “Go-Go Taquitos” that may be

2.5 million pounds of taquitos recalled for salmonella, listeria concerns

Photo by: Bell, Autumn

A chicken-and-Monterey-jack taquito from 7-Eleven. (Source: Wikimedia Commons / Ser Amantio di Nicolao)

4/12/2021 2.5 million pounds of taquitos recalled for salmonella, listeria concerns

https://www.wtxl.com/news/million-pounds-of-taquitos-recalled-for-salmonella-listeria-concerns/article_0ce2f7ea-d62c-11e8-b47a-c3af1fe651bf.html 2/5

contaminated with salmonella and listeria,

the U.S. Department of Agriculture said.

The recall affected approximately

2,490,593 pounds of the products and was

classified as a high health risk. The items

were shipped to distributors nationwide,

including 7-Eleven stores.

Recent Stories from wtxl.com

The taquitos under recall were produced

between July 1 and Oct. 10. Ruiz Food said

it received notification Oct. 16 that the

diced onions used in the production of

their beef and cheese taquitos were being

recalled by their supplier for possible

contamination.

The products subject to recall:

WATCH MORE

Top Vid…

Volunteers, donations needed for Big Bend pantry SKIP AD

4/12/2021 2.5 million pounds of taquitos recalled for salmonella, listeria concerns

https://www.wtxl.com/news/million-pounds-of-taquitos-recalled-for-salmonella-listeria-concerns/article_0ce2f7ea-d62c-11e8-b47a-c3af1fe651bf.html 3/5

4.5-pound cardboard cases containing

24-count Go-Go Taquitos “Beef Taco

& Cheese Taquitos” with a case code

86183 printed on the label.

4.5-pound cardboard cases containing

24-count Go-Go Taquitos “Buffalo

Style Cooked Glazed Chicken

Taquitos” with a case code 86006

printed on the label.

4.5-pound cardboard cases containing

24-count Go-Go Taquitos “Chipotle

Chicken Wrapped in A Battered Flour

Tortilla” with a case code 86019

printed on the label.

They have establishment numbers "17523A

or P-17523A" and "45694 or P-45694" in

the USDA mark of inspection.

The USDA stated there have been no

confirmed reports of adverse reactions due

to consumption of these products, but

people are urged not to eat them. The

items should be thrown away or returned

to the place of purchase.

Anyone concerned about an injury or

illness should contact a healthcare

provider.

Consumption of food contaminated with

salmonella can cause salmonellosis, one of

the most common bacterial foodborne

illnesses. The most common symptoms are

4/12/2021 2.5 million pounds of taquitos recalled for salmonella, listeria concerns

https://www.wtxl.com/news/million-pounds-of-taquitos-recalled-for-salmonella-listeria-concerns/article_0ce2f7ea-d62c-11e8-b47a-c3af1fe651bf.html 4/5

diarrhea, abdominal cramps and fever

within 12 to 72 hours after eating the

contaminated product.

Most people recover without treatment. In

some persons, however, the diarrhea may

be so severe that the patient needs to be

hospitalized.

Consumption of food contaminated with

listeria can cause listeriosis, a serious

infection that primarily affects older

adults, persons with weakened immune

systems and pregnant women and their

newborns. Less commonly, persons

outside these risk groups are affected.

Listeriosis can cause fever, muscle aches,

headache, stiff neck, confusion, loss of

balance and convulsions sometimes

preceded by diarrhea or other

gastrointestinal symptoms. An invasive

infection spreads beyond the

gastrointestinal tract.

In pregnant women, the infection can

cause miscarriages, stillbirths, premature

delivery or life-threatening infection of the

newborn. In addition, serious and

sometimes fatal infections in older adults

and persons with weakened immune

systems.

4/12/2021 2.5 million pounds of taquitos recalled for salmonella, listeria concerns

https://www.wtxl.com/news/million-pounds-of-taquitos-recalled-for-salmonella-listeria-concerns/article_0ce2f7ea-d62c-11e8-b47a-c3af1fe651bf.html 5/5

Persons in the higher-risk categories who

experience flu-like symptoms within two

months after eating contaminated food

should seek medical care and tell the

health care provider what they ate.

Consumers may contact the Ruiz Food

Products, Inc. Consumer Hotline at 1-800-

772-6474.

Consumers with food safety questions can

“Ask Karen,” the Food Safety and

Inspection Service virtual representative

available 24 hours a day, at AskKaren.gov.

Copyright 2018 Raycom News Network. All rights reserved.

4/10/2021 Ikea apologises over removal of women from Saudi Arabia catalogue | Gender | The Guardian

https://www.theguardian.com/world/2012/oct/02/ikea-apologises-removing-women-saudi-arabia-catalogue 1/3

Ikea apologises over removal of women from Saudi Arabia catalogue

Ben Quinn and agencies @BenQuinn75

Mon 1 Oct 2012 20.36 EDT

Ikea, the global furniture company, has apologised for deleting images of women from the version of its catalogue circulating in Saudi Arabia.

The issue was highlighted on Monday by the free newspaper, Metro, which compared the Swedish and Saudi versions of the catalogue and showed that women had been airbrushed out of otherwise identical pictures showcasing the company's products.

Ikea's Saudi catalogue, which is also available online, looks the same as other editions of the publication, except for the absence of women.

One picture shows a family apparently getting ready for bed, with a young boy brushing his teeth in the bathroom. However, a pyjama-clad woman standing next to the boy is missing from the Saudi version. Another picture of five women dining has been removed in the Saudi edition.

Ikea released a statement expressing regret over the issue, saying: "We should have reacted and realised that excluding women from the Saudi Arabian version of the catalogue is in conflict with

4/10/2021 Ikea apologises over removal of women from Saudi Arabia catalogue | Gender | The Guardian

https://www.theguardian.com/world/2012/oct/02/ikea-apologises-removing-women-saudi-arabia-catalogue 2/3

... we have a small favour to ask. Across the US and around the world, millions rely on the Guardian for independent journalism that stands for truth and integrity. The Guardian has no shareholders or billionaire owner to please, and we invest every penny we earn back into our journalism. Readers chose to support us financially more than 1.5 million times in 2020, joining existing supporters in 180 countries.

With your help, we will continue to provide high-impact reporting that can counter misinformation and offer an authoritative, trustworthy source of news for everyone. With no shareholders or billionaire owner, we set our own agenda and provide truth-seeking journalism that’s free from commercial and political influence. When it’s never mattered more, we can investigate and challenge without fear or favour.

Unlike many others, we have maintained our choice: to keep Guardian journalism open for all readers, regardless of where they live or what they can afford to pay. We do this because we believe in information equality, where everyone deserves to read accurate news and thoughtful analysis. Greater numbers of people are staying well-informed on world events, and being inspired to take meaningful action.

We aim to offer readers a comprehensive, international perspective on critical events shaping our world – from the Black Lives Matter movement, to the new American administration, Brexit, and the world's slow emergence from a global pandemic. We are committed to

the Ikea Group values."

Women appear only infrequently in Saudi advertising, mostly on Saudi-owned television channels that show women in long dresses, with scarves covering their hair and long sleeves. In imported magazines, censors black out many parts of a woman's body including arms, legs and chest.

When Starbucks opened its coffee shops in Saudi Arabia, it removed the long-haired woman from its logo, keeping only her crown.

Sweden's equality minister, Nyamko Sabuni, said Ikea was a private company that made its own decisions, but added that it also projected an image of Sweden around the world.

"For Ikea to remove an important part of Sweden's image and an important part of its values in a country that more than any other needs to know about Ikea's principles and values, that's completely wrong," Sabuni told the Associated Press.

Ikea Group, one of the many branches in the company's complicated corporate structure, said it had produced the catalogue for a Saudi franchisee outside the group.

"We are now reviewing our routines to safeguard a correct content presentation from a values point-of-view in the different versions of the Ikea catalogue worldwide," it said.

4/10/2021 Ikea apologises over removal of women from Saudi Arabia catalogue | Gender | The Guardian

https://www.theguardian.com/world/2012/oct/02/ikea-apologises-removing-women-saudi-arabia-catalogue 3/3

upholding our reputation for urgent, powerful reporting on the climate emergency, and made the decision to reject advertising from fossil fuel companies, divest from the oil and gas industries, and set a course to achieve net zero emissions by 2030.

If there were ever a time to join us, it is now. Every contribution, however big or small, powers our journalism and helps sustain our future. Suppor

4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 1/11

At sentencing, cantaloupe growers apologize for deadly listeria outbreak Ray Sanchez, CNN Updated 5:23 PM EST, Tue February 4, 2014

STORY HIGHLIGHTS

PHOTO: Polka Dot Images

The worst food-borne illness outbreaks — The number of salmonella infections linked to cucumbers continues to soar. Four people have died in this year's ongoing outbreak, according to the Centers for Disease Control, which has reported more than 800 cases.

1 of 20

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4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 2/11

(CNN) —  A pair of Colorado farmers were sentenced Tuesday to five years’ probation, including six months of in-home detention, for their role in a 2011 listeriosis outbreak that killed roughly three dozen Americans who consumed infected cantaloupe, according to the U.S. Attorney’s O�ce.

Brothers Eric and Ryan Jensen, who grew up cultivating cantaloupes on Jensen Farms, a fixture in the dry plains of southeastern Colorado since the early 1900s, also were sentenced to 100 hours of community service and ordered to pay $150,000 in restitution in connection with the deadliest food outbreak in the United States in nearly 100 years.

Each apologized in court to the victims’ families.

“My most sincere apologies and deepest regrets. I hope the victims’ meeting helped,” Ryan Jensen said, according to CNN a�liate KMGH. “I do know that much has been gained in food safety understanding both here and outside the country because of this.”

Ryan Jensen also agreed to attend a substance abuse program as part of the sentence.

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Listeria victim's wife: It's 'pure hell'

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Cause of listeria in cantaloupe discovered

Experts: The outbreak was preventable

“This has been a huge tragedy. We are very, very sorry. We hope it leads to better understanding of food safety,” Eric Jensen said.

Both brothers pleaded guilty last year to misdemeanor counts of introducing adulterated food into interstate commerce.

STORY HIGHLIGHTS

Eric and Ryan Jensen pleaded guilty to misdemeanor counts of introducing adulterated food

A 2011 listeriosis outbreak killed roughly three dozen people

The brothers apologize in court to the victims' families

VIDEO

VIDEO

4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 3/11

The prosecution recommended probation because of the cooperation of the brothers, including their willingness to meet with congressional investigators and relatives of their victims, Colorado U.S. Attorney John Walsh said in a statement.

“No sentence of incarceration, restitution or financial penalty can undo the tragic damage done as a result of the contamination at Jensen Farms,” Walsh said. “Today’s sentence serves as a powerful reminder of farmers’ legal and moral responsibility for ensuring their product is safe. Because of the Jensen Farms case and this prosecution, changes have been made regarding how fruit is processed and transported across the country.”

Relatives of the victims expressed mixed feelings.

“Our family actually asked that they only get probation and no jail time because we never thought they proved that they were harming the food with intent to do any harm,” Jeni Exley, whose father, Herb Stevens, died of listeria-related complications. “I think they’re good people but I think they made some bad choices in their farming practices and I think, in the big scheme of things, this is going to put light on the food safety issues we have here in the United States.”

Seven surviving family members testified about what the outbreak did to their loved ones, according to KMGH.

“I do want jail time. I’m very bitter,” said Penny Hauser, who lost her husband of 45 years, Michael Hauser.

“I think if they had gotten some jail time that would have made a big di�erence. You can say, ‘Oh, it wasn’t your fault, it could have happened to anybody,’ but I bought it, I cut it up and I fed it to him and now I have to live with those consequences. And I don’t think Ryan and Eric Jensen understood the magnitude.”

Michael Hauser died on February 21, 2012, on his 69th birthday.

Thirty-three Americans died as a result of the 2011 outbreak after consuming the infected fruit, authorities said. More than 110 other Americans across 28 states were sickened, many hospitalized, from eating the cantaloupe.

The 2011 listeriosis outbreak was the deadliest food outbreak in the United States in nearly 100 years, and the third-deadliest outbreak in U.S. history, according to health o�cials. It could have been prevented, according to numerous food safety experts and federal health o�cials.

Investigators and health experts eventually descended on Jensen Farms, near the town of Holly, and determined that the outbreak occurred because the brothers who had inherited the fourth-generation farm had changed their packing procedures, substituted in some new equipment and removed an anti-microbial wash.

4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 4/11

The investigators said they found, among other things, a dripping, potentially contaminated condensation line allowing water to get onto the floor; water was pooling on the floor; sections of the floor had cut holes and jagged sides that were di�cult to clean.

Samples taken from the pooled water were positive for the listeria that sickened people. On the rolling line where the melons moved, investigators found dirty equipment used to wash and dry the melons, and it could not be easily cleaned.

The FDA report stated that “several areas on both the washing and drying equipment appeared to be uncleanable, and dirt and product buildup was visible on some areas of the equipment, even after it had been disassembled, cleaned, and sanitized.”

What’s more, inspectors found that an older, secondhand washing machine designed for cleaning potatoes had been substituted to clean the melons.

Food poisoning: What you need to know

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4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 5/11

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4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 6/11

4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 7/11

4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 8/11

4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 9/11

4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 10/11

4/12/2021 Brothers apologize for deadly Listeria outbreak - CNN

https://www.cnn.com/2014/01/28/justice/cantaloupe-listeria-deaths-sentencing/index.html 11/11

4/10/2021 Study eyes candy-flavored e-cigarette ads targeted to kids - CBS News

https://www.cbsnews.com/news/candy-flavored-e-cigarette-ads-appeal-to-kids/ 1/3

Study eyes candy-flavored e-cigarette ads targeted to kids

B Y D E N N I S T H O M P S O N

J A N U A R Y 1 8 , 2 0 1 6 / 4 : 5 9 P M   / H E A LT H D A Y

Ads featuring e-cigarettes with flavors like chocolate or bubble gum appear to increase kids' interest in

buying and trying an e-cigarette, a new British study has found.

However, the ads don't increase the overall appeal to kids of either smoking traditional tobacco cigarettes or

using e-cigarettes regularly, the researchers reported.

E-cigarettes, or electronic cigarettes, are battery-powered devices that heat nicotine and flavorings to create

a vapor that is inhaled by the user. E-cigarettes are marketed in thousands of different flavors, including

some that seem to appeal directly to children, the researchers said in background notes.

Flavors other than menthol have been banned in tobacco cigarettes in the United States. But, e-cigarettes

currently remain unregulated and companies are free to add flavors, said Erika Sward, assistant vice

president of national advocacy for the American Lung Association.

"We know that flavors appeal to kids, and that is what the e-cigarette industry is banking on," Sward said.

"Kids like sweet flavors. That is why there are sugar-sweetened cereals. These flavors have always appealed

to a kid's palate."

"Vaping" flavors for e-cigarettes include products marketed as tasting like Sweet Tarts, Hawaiian Punch,

Kool-Aid, Gummi Bears and Froot Loops, said Cliff Douglas, director of the American Cancer Society

Tobacco Control Center.

4/10/2021 Study eyes candy-flavored e-cigarette ads targeted to kids - CBS News

https://www.cbsnews.com/news/candy-flavored-e-cigarette-ads-appeal-to-kids/ 2/3

"It doesn't get much more blatant," Douglas said. "It's quite clearly targeted at kids."

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A recent U.S. Centers for Disease Control and Prevention study found that nearly seven in 10 middle school

and high school students have been exposed to e-cigarette advertising. And experts are concerned that

kids might be further enticed to try e-cigs if companies play up flavorings in the ads, Sward said.

To examine this possibility, the University of Cambridge researchers recruited about 600 kids, aged 11 to 16,

and randomly assigned them to one of three groups. One group looked at ads for candy-flavored e-

cigarettes, another saw ads for non-flavored e-cigarettes, and the third group saw no advertisements at all.

"Answering this question is important because e-cigarette use amongst children in the last year has tripled in

the USA [from 4.5 percent to 13 percent] and almost doubled in England [from 5 percent to 8 percent]," said

lead author Milica Vasiljevic, a research associate at the Cambridge Behavior and Health Research Unit in

England.

The school children were then asked questions to gauge the appeal of using e-cigarettes or smoking

tobacco, the perceived harm of smoking, how much they liked the ads, and how interested they might be in

buying and trying e-cigarettes.

The children shown the ads for candy-flavored e-cigarettes liked the ads more, and expressed a greater

interest in buying and trying e-cigarettes than their peers.

However, showing the ads made no significant difference in the overall appeal of tobacco smoking or of

using e-cigarettes -- in other words, how attractive, fun or cool those activities seemed to kids, the study

found.

The study findings were published in the Jan. 17 online edition of the journal BMJ Tobacco Control.

4/10/2021 Study eyes candy-flavored e-cigarette ads targeted to kids - CBS News

https://www.cbsnews.com/news/candy-flavored-e-cigarette-ads-appeal-to-kids/ 3/3

First published on January 18, 2016 / 4:59 PM

"The primary question they [the researchers] set out to ask in this study was whether e-cig advertisements

serve as a 're-normalization' to smoking," said Cynthia Cabrera. She is president of the Smoke-Free

Alternatives Trade Association, an e-cigarette industry advocacy group.

"In this study, the answer was 'no.' This experimental evidence suggests that what e-cigarette advertising

influences is attitudes towards vaping, not smoking, in line with basic marketing and advertising theory,"

Cabrera said.

But, Douglas said, while the ads didn't make tobacco seem more attractive, experts are concerned that kids

who try e-cigarettes will become addicted to the nicotine contained in the products and ultimately wind up

smoking tobacco.

"This research highlights the likely impact of the use of flavors in interesting kids in using these addictive

drug-delivery products, and also highlights the concern that this process may lead brand new users of

nicotine eventually into conventional cigarette smoking, which is demonstrably more harmful," Douglas said.

The U.S. Food and Drug Administration has announced its intention to regulate e-cigarettes, and is expected

to issue rules giving it that power in the very near future, Sward said.

But that's just the first step, Douglas said. The FDA then would have to issue specific regulations regarding

e-cigarettes, and those could take months or even years to finalize.

"The FDA does need to step in, without question, and as soon as possible," Douglas said.

4/12/2021 Conflict Minerals and Firms’ Ignorance Over Their Supply Chains | Business Ethics

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4/12/2021 Conflict Minerals and Firms’ Ignorance Over Their Supply Chains | Business Ethics

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Fighting in the DRC has killed over 5 million people since 1998, according to the International Rescue Committee. It is the world’s bloodiest conflict since

World War II.

The issue: Your smartphone or desktop computer is not built from scratch by Apple or Dell. It includes parts made by subcontractors. But one sole subcontractor does not make every chip inside; that task is handled by yet another subcontractor, who may buy the needed tantalum from still another supplier who may have purchased the tantalum ore from a militia leader who forces children to work in dangerous mines in the Democratic Republic of Congo (DRC).

As globalized supply chains erode borders, the ideals of social responsibility are expanding globally, with corporations now expected to certify their suppliers’ labor practices. Since the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, American law has required publicly traded

companies to detail their sources of so-called “conflict minerals” — tungsten, tantalum, tin and gold (known as 3TG), which are found in most modern electronics and in jewelry, cars, airplanes and more. The federal law requires companies to file annual due diligence reports to the U.S. Securities and Exchanges Commission (SEC), but does not mandate that companies stop sourcing these minerals from conflicts.

Under Dodd-Frank, companies are obliged to assess if they could be directly or indirectly financing armed groups in

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4/12/2021 Conflict Minerals and Firms’ Ignorance Over Their Supply Chains | Business Ethics

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the DRC and nine neighboring countries — Angola, Burundi, Central African Republic, Republic of the Congo, Rwanda, Sudan, Tanzania, Uganda and Zambia.

An academic study worth reading: “Challenges for Global Supply Chain Sustainability: Evidence from Conflict Minerals Reports,” published in the Academy of Management Journal, July 2016.

Study summary: Researchers from the University of Michigan analyzed all the due diligence reports the SEC received in 2014 and 2015 — about 1,300 reports per year. They also looked at other SEC data and business metrics to “analyze the organizational factors associated with supply chain visibility.” They assessed companies’ organizational complexity, leverage over its suppliers, the intricacy of the supply chain and its public profile. The authors searched for patterns that distinguish firms that can and those that cannot certify their supply chain free of conflict minerals.

Findings:

Almost 80 percent of firms were unable to determine

the sources of the minerals in their products (79 percent

in 2015; 77 percent in 2014).

One percent could certify their products free of conflict

minerals “with great certainty.”

“There is a gap between the intentions of public policy

and what corporations are willing and able to deliver.”

4/12/2021 Conflict Minerals and Firms’ Ignorance Over Their Supply Chains | Business Ethics

https://business-ethics.com/2016/09/20/1237-conflict-minerals-and-firms-ignorance-over-their-supply-chains/ 4/8

Most firms cited “the complexity and size of our supply

chain” as the main reason they could not identify the

source of their minerals. Many noted that they could not

because their own suppliers were not required to

provide such a level of certification.

Companies with more suppliers found it harder to

declare their products conflict free.

“Larger and older companies tend to find investigating

their entire supplier bases more challenging.”

The authors found foreign-based companies “about 22

percent less likely to admit they were unable to verify

the origins of their products.” (A company can be non-

U.S. based and be listed in the U.S. and thus subject to

SEC rules.)

Internationally diversified firms found it harder to verify

sourcing: “Companies that had foreign subsidiaries

across many countries were 29 percent less likely to

have reason to believe their products to be conflict-free”

than companies with smaller global footprints.

Neither a company’s visibility nor its reputation had a

significant impact on a company’s ability to verify its

supply chain. But when the number of suppliers is

accounted for, reputation becomes a factor in a

company’s motivation to fully check its supply chain.

4/12/2021 Conflict Minerals and Firms’ Ignorance Over Their Supply Chains | Business Ethics

https://business-ethics.com/2016/09/20/1237-conflict-minerals-and-firms-ignorance-over-their-supply-chains/ 5/8

Reputation “forces highly reputed companies to actively

look into their supply chains.”

A company’s commitment to environmental or social

issues is not a factor in how able it is to certify its

products free of conflict minerals.

Throwing money at due diligence does not statistically

improve the chances of verifying the supply chain as

conflict-free.

“Businesses are not dissembling about their inability to

determine the source of their minerals. They simply

cannot obtain a reasonable degree of certainty about

processes from which they are three or more steps

removed.”

Tips for reporters looking for SEC filings:

To see what a company has filed, use the Securities and Exchange Commission’s EDGAR (electronic, data gathering, analysis and retrieval) database.

If a company is publicly traded — meaning, its shares are bought and sold on a stock market — it must file extensive documentation with the SEC, the U.S. government body tasked with overseeing capital markets, ensuring transparency and protecting investors against fraud. The SEC provides registration information, financial statements and other documents through EDGAR. After finding the company, search the list of documents. Look

4/12/2021 Conflict Minerals and Firms’ Ignorance Over Their Supply Chains | Business Ethics

https://business-ethics.com/2016/09/20/1237-conflict-minerals-and-firms-ignorance-over-their-supply-chains/ 6/8

for a filing called “SD” (which stands for “specialized disclosure”).

Let’s look at Intel Corporation.

In 2015, the company — one of the world’s largest semiconductor manufacturers — received praise from As You Sow, a non-profit advocacy group, for its “strong, conflict-free policy.” As You Sow said Intel was the only company out of the 155 it surveyed with a “conflict-free product line.” Indeed, in an online PR campaign, Intel says it is “committed to using only conflict-free mineral resources.”

But in its 2016 SD, Intel acknowledges that, after extensive due diligence, it cannot certify its entire product line, including some microprocessors, Wi-Fi products and solid- state hard drives: “We cannot describe these products as DRC conflict free under the federal securities laws.”

Other NGOs work on the sourcing of raw materials, including African diamonds and Uzbekistan’s cotton crop, which is harvested by school children and their teachers, who are forced out of the classroom each fall, according to Human Rights Watch.

Other research:

A 2015 study published in the Journal of Business Ethics looks at how companies are implementing supply chain due diligence.

A 2015 fact sheet from the U.S. Geological Survey describes the gold supply chain in the DRC.

4/12/2021 Conflict Minerals and Firms’ Ignorance Over Their Supply Chains | Business Ethics

https://business-ethics.com/2016/09/20/1237-conflict-minerals-and-firms-ignorance-over-their-supply-chains/ 7/8

Amazon Says It Puts Customers First. But Its Pricing Algorithm Doesn’t.

Drug Industry Lobbyists and Campaign Cash Stymie Bid to

Restrain Medicare Prescription Costs

A 2015 paper in the Journal of Human Rights places Dodd- Frank in the context of other efforts to shrink international black markets.

Photo by Day Donaldson via Flickr.

David Trilling is Research Reporter at Journalist’s Resource, a project of Harvard University’s Shorenstein Center and the Carnegie-Knight Initiative. This article is republished with permission under terms of a Creative Commons license.

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4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 1/17

4 False Advertising Scandals That Cost Brands Millions

Karlee Weinmann and Kim Bhasin  Sep 16, 2011, 5:33 PM

It doesn't pay to deceive the public.

ExtenZe infomercial via YouTube

In advertising, there's a big difference between pushing the truth and making false claims. Is a product really

"scientifically proven," and are "results guaranteed"?

For companies that cross the line, it can cost millions. Major brands have had to pay up, facing scrutiny from

competitors and the FDA.

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 2/17

Most of us have been victims of false advertising. The question is, will companies change their marketing policies, or

continue to prioritize profits over the consumer's right to know?

We found 14 major brands that have faced false advertising scandals -- some are still ongoing, and not all companies

have had to pay up, but each has dealt with a fair amount of negative publicity.

Activia yogurt

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 3/17

Flickr

Dannon's popular Activia brand yogurt lured consumers into paying more for its purported nutritional benefits --

when it was actually pretty much the same as every other kind of yogurt.

Falsely touting the "clinically" and "scientifically" proven nutritional benefits of the product, Dannon even got a

famous spokesperson, Jamie Lee Curtis, for the supposed digestion-regulator. But after a while, some customers didn't

buy it.

A class action settlement last year forced Dannon to pay up to $45 million in damages to the consumers that filed the

lawsuit and others who said they'd been bamboozled. The company also had to limit its health claims on its products

strictly to factual ones.

Source: ABC News

Taco Bell's seasoned beef

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 4/17

http://www.flickr.com/photos/stevendepolo/3427412201/

When consumers raised questions about what was actually seasoning Taco Bell's seasoned beef, the company didn't

know how to respond.

It was simply using oat filler -- which means the meat isn't seasoned beef at all, according to USDA standards. The

franchise had been tricking its consumers into thinking its products were of a higher grade than they actually were.

Taco Bell took the opportunity to poke fun at itself, hoping to mitigate the PR disaster. The company even took out a

full-page newspaper ad thanking complainants for suing. So far, so good. Taco Bell's proactivity and willingness to

address the controversy have restored some faith in the fast food giant.

The woman who started all the hullabaloo ultimately dismissed her lawsuit.

Source: Ad Age

Definity eye cream

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 5/17

Olay

In 2009, an Olay ad for its Definity eye cream showed former model Twiggy looking wrinkle-free -- and a whole lot

younger than her years (she turns 62 next week). Turns out the ads were retouched.

British lawmakers yanked digitally altered spots, citing not only a gross misrepresentation of products, but the ad's

potentially negative impact on people's body images.

Source: Yahoo! Shine

Hyundai and KIA vehicles' horsepower

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 6/17

Screengrab from AmsterdamAdBlog on YouTube

Hundreds of car owners were extremely disappointed to find out that Hyundai and Kia overstated the horsepower in

some of their vehicles.

In 2001, the Korean Ministry of Construction and Transportation uncovered the misrepresentation, which for some

models was as much as 9.6 percent more horsepower than the cars actually had.

A class action lawsuit in southern California claimed the companies were able to sell more cars and charge more per

vehicle because of the false claims. In the end, the auto powerhouses had to pay customers -- the settlement was

estimated to be between $75 million and $125 million.

Source: GirardGibbs.com

Groupon's tourism ads

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 7/17

Groupon

Groupon was sued by a San Francisco-based tour company earlier this year for allegedly running misleading ads on

Google. Groupon's accused of using keywords related to certain tourist attractions to trigger ads, while not actually

offering coupons related to any of those attractions.

The class-action suit is currently ongoing -- it was approved by a judge in August after Groupon tried to get it

dismissed.

Sources: MediaPost, AdWeek

Rice Krispies & Frosted Mini-Wheats

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 8/17

Ben+Sam on Flickr

Kellogg's popular Rice Krispies cereal had a crisis in 2010 when it was accused of misleading consumers about its

immunity boosting properties. The Federal Trade Commission ordered Kellogg to halt all advertising that claimed that

the cereal improved a child's immunity with "25 percent Daily Value of Antioxidants and Nutrients -- Vitamins A, B, C

and E," stating the the claims were "dubious."

Just a year prior, the company settled with the FTC over charges that its Frosted Mini-Wheats cereal didn't live up to

its ads. The campaign claimed that the cereal improved kids' attentiveness by nearly 20%, and was shot down when

the FTC found out that the clinical studies showed that only 1-in-9 kids had that kind of improvement -- and half the

kids weren't affected at all.

Source: CNN

Airborne

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 9/17

By welivefast on Flickr

Herbal supplement Airborne was a national hit throughout the 1990s. Marketing of the product claimed that it helped

ward off harmful bacteria and germs, preventing everyday ailments like the flu and . But did Airborne

actually have these benefits?

Apparently not, which sparked a huge false advertising scandal. There were no studies to support Airborne's

effectiveness that met scientific standards -- so the Center for Science in the Public Interest (CSPI) got involved.

The high-profile scandal ended with a huge settlement, with Airborne having to pay $23.3 million in the class-action

lawsuit, and an additional $7 million settlement later. The exact benefits to users of Airborne remain unestablished.

Source: NPR

common cold

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 10/17

Extenze

ExtenZe infomercial via YouTube

Extenze has claimed to be "scientifically proven to increase the size of a certain part of the male body."

But in 2010, the company had to pay a $6 million settlement to disappointed, less-endowed men everywhere.

Source: BNET

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 11/17

Splenda

By GoodNCrazy on Flickr

The Sugar Association says Splenda's "Made from Sugar" slogan is misleading, and that the sweetner is nothing more

than "highly processed chemical compound made in a factory," reports CBS.

In 2008, the association first filed a suit against Johnson & Johnson subsidiary McNeil Nutritionals, which then

countersued the association engaging in a "malicious smear campaign." The two parties reached a confidential

settlement before going to trial.

Equal also took its rival to court in 2007, accusing "the makers of Splenda of confusing consumers into thinking its

product was healthier and more natural than other artificial sweeteners." The two parties also reached a confidential

settlement.

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 12/17

Pennzoil

By eflon on Flickr

Pennzoil was ordered to pull ads that showed their oil performing better than their competitors after a New Jersey judge called them "false and misleading" and "repugnant." Houston-based Pennzoil was claiming superiority over four different brands, including New Jersey-based Castrol. Pennzoil is no longer allowed to claim that their oil is better at protecting car engines than Castrol.

Brett Favre is shown in the television and internet ads, using Pennzoil as face paint before the big game.

Source: Houston Chronicle

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 13/17

New Balance

By sling@flickr on Flickr

A New Balance sneaker that reportedly helped users burn calories were called out when studies did not find any boosted health benefitsfrom wearing the shoe.

The toning sneaker, claimed to use hidden board technology, were advertised as calorie burners that activated the glutes, quads, hamstrings and calves. Plaintiffs discovered that the shoe was instead an injury hazard, without any secret technology, and are seeking $5 million in compensation. The sneakers cost about $100.

Source: Reuters

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 14/17

Kashi

By alexstaubo on Flickr

Despite claims to the contrary, Kashi Company's "All Natural" products were chock full of "almost entirely synthetic

and unnaturally processed ingredients," according to to the class action lawsuit filed against them. In fact, ingredients

that are considered prescription drugs and federally-classified hazardous substances were found to be the primary

ingredients in the so called "natural" foods.

The lawsuit, on behalf a proposed class of all U.S. consumers, says that Kashi put the all-natural labels on their foods

even though they knew the claim to be false. For example, Kashi GoLean shakes are composed almost entirely of

unnatural processed ingredients.

Source: Top Class Actions

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 15/17

Eclipse gum

the impuslivebuy via flickr

Eclipse gum claimed that its new ingredient, magnolia bark extract, had germ-killing properties. Businessweek

reports:

Consumers sued Wrigley [in 2009] in federal court arguing the subsidiary of privately held Mars Inc. made

misleading advertising claims about the germ-killing properties of Eclipse.

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 16/17

As part of the settlement, Wrigley will change how it markets and labels its gum. It agreed to pay $6 million to $7

million to a fund that will reimburse consumers up to $10 each for the product and cover other costs of the

settlement, according to the law firms Blood Hurst & O'Reardon and Robbins Geller Rudman & Dowd.

Classmates.com

By Small Town OK on Flickr

Millions of people lit up when Classmates.com sent them an email saying old friends were trying to contact them,

promising to rekindle old friendships and flames if subscribers upgraded to a "Gold" membership.

But even with an upgrade, the expected reunions never came. Turns out the social networking site used the ploy to get

users to pony up extra dollars. In 2008, one miffed user filed suit alleging the "deceptive" emails were false

advertising.

He eventually bested the website, which agreed to pay out a $9.5 million settlement -- $3 for every subscriber who fell

for the dirty trick -- to resolve the case.

4/10/2021 14 False Advertising Scandals That Cost Brands Millions

https://www.businessinsider.com/false-advertising-scandals-2011-9#companies-spend-tons-of-money-to-market-their-products-15 17/17

Source: Mashable

Companies spend tons of money to market their products

Screengrab from BleedingRose2727 YouTube

Check out the 12 companies that spend the most on advertising >

4/10/2021 “Anti-aging” is out in skin care but “glow” is in - Vox

https://www.vox.com/the-goods/2018/9/11/17840984/skin-care-anti-aging-drunk-elephant 1/8

“We’re not anti-aging.”

This might seem like a revolutionary claim from Neutrogena, which put the tagline on its website alongside pictures of 41-year-old Kerry Washington, 46-year-old Jennifer Garner, and 51-year-old Nicole Kidman. After all, Neutrogena is a big and important brand in an industry that has been promising women it can reverse the signs of aging for decades.

But then you read the rest of the message: “We’re anti-wrinkles.” And you look more closely at the women smiling next to these words — flawless celebrities with not a wrinkle in sight.

Suddenly it doesn’t seem so revolutionary anymore.

The tension in the Neutrogena ad can be found everywhere in skin care right now. The industry claims to be moving away from anti-aging language, and yet it’s selling the same products and ingredients.

The fall of “anti-aging” skin care Brands are still selling the idea of trying to look younger — they’ve just changed the vocabulary.

By Cheryl Wischhover@CherylAnneNY  Sep 11, 2018, 7:00am EDT

4/10/2021 “Anti-aging” is out in skin care but “glow” is in - Vox

https://www.vox.com/the-goods/2018/9/11/17840984/skin-care-anti-aging-drunk-elephant 2/8

Kerry Washington, Nicole Kidman, and Jennifer Garner on Neutrogena’s website. 

L’Oréal has an “Age Perfect Cell Renewal Rosy Tone Moisturizer” that contains a mild acid and common moisturizing ingredients. Clinique’s Repairwear Laser Focus serum “helps plump skin so expression lines are visibly reduced,” mostly via its moisturizing agents.

Take a look at any drugstore aisle or Sephora shelf and you’ll see terms like “regeneration” and “renewal” and “radiance” all over skin care bottles. Positive words. Hopeful words.

For decades, beauty companies have sold youthfulness under various guises to a primarily female consumer group, brilliantly exploiting their concerns — or concocting new ones — while twisting legitimate science about how ingredients work. We’re now in a moment where women’s fears about the aesthetic effects of aging continue to be stoked, but buying something explicitly marketed as “anti-aging” has fallen out of favor. The industry that invented the term is going through contortions to mute that messaging, though they’re of course still suggesting that you need these products.

The ideas of self-care generally and skin care specifically are ascendant. But the shift away from anti-aging language is a window into how the modern beauty industry and marketing work. It fits into a larger trend of brands moving away from old-fashioned, negative concepts because of a consumer push; the phasing out of the so- called “ethnic” hair care aisle and an embrace of body positivity are two examples. Aging, and the fight against it, seems to be next.

But is this progress or just more of the same?

Neutrogena

4/10/2021 “Anti-aging” is out in skin care but “glow” is in - Vox

https://www.vox.com/the-goods/2018/9/11/17840984/skin-care-anti-aging-drunk-elephant 3/8

A wholesale marketing shift from “anti-aging” to “glow” and “radiance”

The modern anti-aging industry started in the early 20th century, when two female beauty pioneers competed to get their potions onto women’s faces: Helena Rubinstein and Elizabeth Arden. In his 2011 book Branded Beauty: How Marketing Changed the Way We Look, journalist Mark Tungate writes of this competitive duo: “On the one hand, their products pleased, pampered and, yes, beautified millions of women. On the other, their advertising copy contrived to persuade their customers that ageing was not only undesirable, but somehow shameful.”

This set the tone for how skin care was sold for much of the next century. Elizabeth Arden, which is now owned by Revlon, has enjoyed success with its Prevage line. It launched in the early 2000s as a partnership with Allergan, the manufacturer of Botox, and claimed to reduce fine lines and wrinkles. Anti-aging is part of Arden’s DNA.

Olay brought anti-aging creams, previously a department store purchase, to the drugstore. The brand’s Total Effects line launched in 1999 and promised to fight signs of aging seven different ways. The words “anti-aging” are still emblazoned on that line’s bottles.

In 2010, an analyst told the Wall Street Journal, “There’s a large niche of women out there who want to buy anything with ‘anti-aging’ on it.” But that’s right about when things started to change. There wasn’t dramatic pushback to the idea of anti-aging, per se. Instead, there was an explosion of indie beauty brands like Saturday Skin and Herbivore, which marketed their products to a younger cohort of women who weren’t interested in anti-aging language. Since none of the brands were tethered to huge marketing teams and decades of history, they could use messaging that seemed fresh and authentic, often speaking to customers via social media and getting traction on forums like Reddit.

These new brands, in contrast to traditional, slower-moving corporations like L’Oréal and the Johnson & Johnson-owned Neutrogena, became favorites of skin care consumers partly because of the way they talk about skin. They use more holistic and positive language like “glow” and “radiance” and “luminosity”, rather than positioning skin as something that requires a fight to maintain. They’re not clinical words but are vague enough to hint at the kind of skin you might achieve — well-hydrated, free of blemishes.

Glossier, founded in 2014, has risen to the top to become the ur-millennial beauty brand. Emily Weiss, founder of the popular beauty blog Into the Gloss, seemed to know instinctively how her generation wanted to use skin care. Glossier’s serums and exfoliators never even hint at wrinkles and aging, instead talking about “tired” skin and “even” skin tone. (The brand is sometimes criticized for being marketed to people who already have “perfect” skin.) This caught on, resulting in an increased focus on brightening and glowinstead of aging.

4/10/2021 “Anti-aging” is out in skin care but “glow” is in - Vox

https://www.vox.com/the-goods/2018/9/11/17840984/skin-care-anti-aging-drunk-elephant 4/8

In early 2016, the beauty industry did a bit of hand-wringing after recent data suggested that millennials were not buying traditional anti-wrinkle/anti-aging products, according to the trade publication WWD. Growth for that category was slow. Two years later, skin care in general is in an explosive growth phase. Sales of masks and facial exfoliators, products meant to provide quick, glowy results, were up a combined 44 percent in 2017, according to the NPD Group.

It’s also worth noting that millennials are not teens anymore. They’re in their 20s and 30s and are likely starting to see the first more permanent signs of aging showing up on their skin. But they’ve been trained to think about all that in a different way than previous generations, due in part to how the industry has positioned the products.

Allure banned “anti-aging” in its pages

How you define the term anti-aging is a matter of semantics. Michelle Lee, the editor- in-chief of the beauty-focused Allure magazine, sees the term as one that has negative connotations and is not inclusive. She compares “anti-aging” to a phrase like “throws like a girl.” Taken on the surface, the words are merely descriptive. But “throws like a girl” is often used in a derogatory way that implies a girl can’t actually throw. It’s deeply rooted in sexism. Lee sees the term “anti-aging” similarly, albeit for ageism.

“The world has really moved into this space of acceptance and not shaming people,” she says. “We see so many things like hashtags about acne acceptance and size acceptanceand gender and hair texture and everything else. But for some reason, the conversation around aging still hadn’t necessarily been there ... I equate ‘anti- aging’ to the word ‘diet.’”

"“I EQUATE ‘ANTI-AGING’ TO THE WORD ‘DIET’”"

In a skin care context, she views “anti-aging” as a marketing construct. “When you’re talking to your friends, you say, ‘What vitamin C serum are you using?’ or, ‘What eye cream are you using?’ You don’t ever say to somebody, ‘What is the anti-aging product that you’re using?’”

There are still many brands that use anti-aging language or hedge their bets like Neutrogena. But last August, Lee made the decision to ban the use of the term from Allure. She wrote in an editor’s letter, “Changing the way we think about aging starts with changing the way we talk about aging.”

But how big a change is this, actually?

Let’s compare two similar products: One, Skinceuticals CE Ferulic, was launched in 2005 and is considered the beauty industry’s gold-standard vitamin C product. It’s packaged in a clinical-looking dropper bottle. The copy on the Skinceuticals website uses the words “aging” or “anti-aging” 15 times. “Visible anti-aging benefits, such as

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the improvement of the appearance of lines and wrinkles, loss of firmness, and brightens skin’s complexion,” reads one bullet point.

Then there’s Drunk Elephant’s version, C-Firma, which is commonly recommended as a cheaper “dupe” for the CE Ferulic since it contains similar active ingredients. Launched in 2013, Drunk Elephant is one of the buzziest skin care brands around. Its products are among Sephora’s best sellers, and its rabid fan base constantly posts Instagrams of the brand’s peppy, brightly colored bottles. Nowhere on Sephora’s site is aging or anti-aging mentioned in the product description. (On Drunk Elephant’s site, there is one mere mention of “photoaging,” which means sun damage.) “The result is a noticeably diminished appearance of photo damage, replaced by incredible radiance and luminosity,” the copy on Sephora’s site gushes. In other words, you’ll glow.

Tiffany Masterson, Drunk Elephant’s founder, does not consider it an anti-aging brand, partially because of the ingredients she chooses not to use in its formulation. “I consider Drunk Elephant to be a pro-skin brand,” she said in an email to Vox. Like Lee, she doesn’t think much of the term “anti-aging.”

“There is no such thing as ‘anti-aging,’” she said. “Aging is inevitable. There is such a thing as making healthy choices across the board and aging gracefully. There are so many marketing terms floating around that don’t actually mean a whole lot, really.”

A bottle of Skinceuticals CE Ferulic and Drunk Elephant C-Firma, two similar products. Skinceuticals/Drunk Elephant

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Tungate, the author of Branded Beauty, said in an interview with Vox that beauty is one of the few industries that still rely heavily on using a lot of words to sell product. “What’s funny about beauty advertising is that nearly every other kind of advertising has now dispensed with copy as a way of communication. One of the things that I find entertaining about the marketing aspect of beauty is that there is a kind of poetry about it, where there’s a vocabulary that they use to try and convince consumers. It’s quite creative, actually, what they do,” Tungate says. “They stop short of lying, but they are certainly economical with the truth.”

Well, sometimes they lie, or at least, mislead. The Federal Trade Commission keeps tabs on beauty companies to make sure they aren’t making claims their products can’t support. This is why you’ll see creative wording such as a product that can “show a reduction in the appearance of wrinkles,” as CE Ferulic supposedly does, rather than saying outright that it will actually reduce wrinkles. It’s a fine distinction.

In 2014, the FTC slapped L’Oréal with charges that it had used “deceptive advertising” and “unsubstantiated claims” when it said in ads that its Lancôme Génifique and L’Oréal Paris Youth Code products could “boost genes’ activities.” “It would be nice if cosmetics could alter our genes and turn back time,” an FTC employee wrote cheekily in a press releaseabout a settlement it reached with the company.

Regardless of what they’re called, do the products do anything?

To understand anti-aging products, you have to understand how the signs of aging manifest on your skin. Collagen, the protein that forms a matrix in between the skin’s layers and helps it look taut and plump, starts to break down. Years of sun exposure can lead to dark spots that no longer disappear like those cute summer freckles used to. (Hyperpigmentation, darker spots on the skin, can also occur after an acne breakout.)

“In studies, the first signs of aging — meaning what others notice — is loss of uniformity of color. When I look at people’s faces, I look at pigment, redness, skin laxity, skin texture, and loss of volume, all of which become more pronounced as we age,” says Dr. Heather Rogers, a dermatologist in Seattle.

Because there are so many different and distinct signs of aging, “there is not a single treatment that can improve everything.”

Many ingredients that brands use in products that promise glow and radiance are the same ones that have been used in products that are explicitly billed as anti-aging. To address the (drunk) elephant in the room, do anti-aging or radiance or self-care products or whatever we’re calling them now even do anything?

Studies tell us that the best thing you can do to minimize the signs of aging is make healthy lifestyle choices. Don’t smoke. Try to exercise. Eat a healthy diet. And the cardinal rule espoused by every single dermatologist: Protect your skin from the sun.

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"“THERE IS NOT A SINGLE TREATMENT THAT CAN IMPROVE

EVERYTHING”"

Sure, prevention is good, but we humans like to think we are in control of our bodies and can fix past mistakes. We believe we can improve our lot — or skin texture — in life.

This is where the science comes in. Retinoids are vitamin A derivatives that promote cell turnover and increase collagen production to mildly correct fine lines, fade dark spots, and unclog pores. They’re one of the most studied ingredients out there because tretinoin, best known by its brand name Retin-A, is a prescription retinoid used for decades as an acne and fine line fighter. Since it’s classified as a drug, it has been subjected to the Food and Drug Administration’s rigorous drug approval rules. Many dermatologists prescribe it as a first-line anti-ager. (From an FDA regulatory standpoint, cosmetic ingredients don’t have to go through the same testing that prescription drugs do to ensure they’re efficacious.)

Then there’s retinol, tretinoin’s over-the-counter cousin. It’s less effective than tretinoin and less well-studied, though there is evidence that it improves the skin’s appearance. This is complicated by a lack of agreement about what concentration is best, and the fact that different companies use different formulations of retinol in products.

Cosmetic chemists and dermatologists interviewed for this story also all pointed to vitamin C, niacinamide, and acids as ingredients that have both some hard science and clinical evidence of effectiveness behind them. Vitamin C (the star ingredient in CE Ferulic, Drunk Elephant’s C-Firma, and countless other products) and niacinamide, a B vitamin, are both popular as antioxidants to prevent damage caused by free radicals. They also provide that nebulous result of brightening the skin.

Acids, like glycolic acid and salicylic acid, exfoliate the skin to help slough off dead skin for, yes, an immediate glow. Dermatologists have long used acids in in-office procedures (and this is where a lot of the scientific evidence comes from), but they show up in lower concentrations in over-the-counter skin care. Acids, because of their degunking effects and subsequent ability to produce a temporary glow after one use, are one of the most popular categories in skin care right now.

"“THESE PRODUCTS WILL GENERALLY WORK. ALL PRODUCTS

WILL — AS MOISTURIZERS.”"

None of the above ingredients will dramatically change your face, and some, like retinol, take weeks or months to produce changes. Still, you can sometimes see results right away for another reason.

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“These products will generally work. All products will — as moisturizers. They’ll make your skin, at least temporarily, look better,” says cosmetic chemist Perry Romanowski. “When you talk about stuff like getting rid of wrinkles and skin lightening and rejuvenating your skin, that’s where all the bullshit comes in.”

Moisturizing ingredients “work” to make us look a bit younger. “Dry skin is unhealthy and can age faster, so well-moisturized skin is healthier-appearing because the skin’s barrier is working better — and it appears less wrinkly, for sure,” says Dr. Amy Wechsler, a dermatologist in New York City who is also board-certified in psychiatry and advises Chanel on its skin care line.

The ubiquity of glycerin in products supports Romanowski’s point. Glycerin, which draws water to itself and thus to your skin when applied to it, is one of the cheapest and most common moisturizing ingredients used in skin care products. It’s often listed high up on ingredient labels. (The FDA requires manufacturers to list ingredients “in descending order of predominance,” meaning that the first ingredients on a label are present in the product in the highest concentration.) Start flipping over labels and you’ll often see glycerin listed within the first five ingredients, in everything from those anti- wrinkle-not-anti-aging Neutrogena products to CE Ferulic and Drunk Elephant’s C- Firma.

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