Archive for the ‘Commercialism’ Category

The Federal Trade Commission (FTC) is hosting a workshop today on “native advertising” – the practice of blending ads with news and other content in such a way to make it difficult to distinguish paid and unpaid content. The agency will tackle issues concerning the popular marketing tool’s blurred lines between advertising and editorial content. Public Citizen’s President Robert Weissman, alongside industry representatives from Buzzfeed, The Wall Street Journal and others, will speak on the panel addressing best practices in transparency and disclosure.

The use of native advertising and sponsored content – content created by or on behalf of the advertiser that “runs within the editorial stream [and] integrates into the design of the publisher’s site” – has become increasingly pervasive, as companies seek online marketing tools that are not obvious attempts to sell goods and services. A marketing research firm predicted that spending on sponsored content would rise by 22 percent between 2012 and 2013, up to $1.88 billion.

Because marketers pay for, and often create, sponsored content, and the end goal is commercial, it should be clearly labeled as advertising, pursuant to FTC disclosure rules. (Marketing industry leaders claim that sponsored content is not always advertising, so it should not be labeled as such.)

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I love being the bearer of good news. Eliminating infant formula marketing in hospitals is decidedly a best practice employed by the vast majority of U.S. News and World Report’s top-ranked hospitals.  Public Citizen’s new report, Top Hospitals’ Formula for Success: No Marketing of Infant Formula, co-released by the Ban the Bags campaign shows how the vast majority of the nation’s most reputable hospitals are acting ethically and thwarting pressure from formula companies to aggressively market their harmful products.

Numerous studies show that mothers breastfeed with less frequency and for shorter durations when they receive formula company-sponsored bags with formula samples in hospitals at discharge. The bags often lead moms to believe hospitals endorse formula feeding and give up more easily on breastfeeding. Healthcare professionals overwhelming recommend that women breastfeed exclusively for the six months after birth, given its numerous health and economic benefits.

The report makes the following findings:

- Sixty-seven percent of top hospitals in gynecology (30 out of 45) reported not distributing formula company sponsored discharge bags, formula samples or other formula company promotional materials to mothers in their maternity units. Another 11 percent (5 of 45) reported limiting formula company-sponsored discharge bag and sample distribution to mothers who request them, or based on other criteria.

- Eighty-two percent (14 of 17) of U.S. News’ Honor Roll, of overall best hospitals, reported having a policy or practice against distributing formula company-sponsored discharge bags or other promotional materials.

- Eleven percent of hospitals in gynecology (5 of 45) still distribute formula company-sponsored materials, and a handful of hospitals did not respond to the survey.

The report re-affirms other data showing that hospitals have been steadily trending toward ending formula promotion over the past decade. According to the Centers for Disease Control and Prevention (CDC) Maternity Practices in Infant Nutrition and Care (mPINC) survey, 27.4 percent of hospitals had discontinued the formula discharge bags in 2007 and by 2011, 45.5 percent had ended the practice. The number of Baby Friendly designated hospitals, prohibiting formula marketing, is increasing. Further, all hospitals in Massachusetts and Rhode Island have voluntarily banned discharge bags, while others including Maryland, North Carolina, Oklahoma and New York are progressively moving in that direction.

The formula companies should be the first to comply with the World Health Organization’s International Code of Marketing of Breast-milk Substitutes and stop co-opting hospitals into advertising their products. But with profits at stake, they’re ignoring the Code. More than 16,500 people have signed Public Citizen’s petition calling on the three major formula companies – Abbott, Mead Johnson and Nestle—to stop marketing in healthcare facilities. Sign the petition and forward to friends before we deliver it to the companies next month. Visit our http://www.citizen.org/infant-formula to learn more about Public Citizen’s campaign to end formula marketing and what you can do to make change in your community.

Eva Seidelman is a Researcher for Public Citizen’s Commercial Alert.

August has been designated National Breastfeeding Month to highlight the significant health and economic benefits of breastfeeding to mothers and babies. However, three mega-corporations – Nestle, Abbott and Mead Johnson – continue to spend millions inappropriately marketing infant formula including inside the hospitals we trust. Reputable authorities including the U.S. Surgeon General formally promote breastfeeding over formula feeding because studies confirm that breastfeeding, whenever possible, is the healthiest option for mothers and babies. These companies know that if they can get free formula samples into the hands of new mothers while they’re still in the hospital, moms are more likely to rely on formula, interfering with their initial intentions to breastfeed. While those samples appear to be “free,” mothers, babies and U.S. taxpayers pay large sums for the formula itself, and the associated healthcare costs, in the long-run.

I recently joined Public Citizen’s Commercial Alert and will be coordinating our campaign to keep formula marketing out of health care facilities so that mothers can make objective, informed choices about how to feed their babies. When they hand out discharge bags with free samples, hospitals are essentially signaling to mothers that they recommend or endorse formula. According to studies published by the American Academy of Pediatrics and the U.S. Government Accountability Office formula marketing discourages breastfeeding for this very reason. Formula marketing in hospitals is not only manipulative, it is a violation of the World Health Organization’s International Code of Marketing of Breastmilk Substitutes.

We’re on the Right Track

The good news is we’re making significant progress, hopefully as a result of our and others’ campaign efforts. In 2012, the U.S. Centers for Disease Control and Prevention’s mPINC study found that 45.5 percent of hospitals nationwide had stopped distributing formula samples. This is a notable improvement from 2009, when 34.2 percent of hospitals had ended the practice, which itself was an improvement over 2007. Certain states have made extraordinary progress. Over the past few years, nearly all hospitals in Maryland committed to stop distributing formula samples to new mothers, among other changes. In July of 2012, Massachusetts became the second state after Rhode Island to ban discharge bags in all of its hospitals thanks to the Ban the Bags campaign. Many more hospitals, including in New York City and California, have followed. These efforts likely led to the significant increase in breastfeeding initiation nationwide, which may have contributed to declines in obesity among preschoolers from 2008-2011.

But the fight is far from over. The majority of the nation’s hospitals still provide discharge bags with free samples. The majority do not exclusively breastfeed during the six months when it matters most. Over the next few months, we will be pressuring the nation’s highest-ranked hospitals to ban formula marketing. Some have, but all of these industry leaders need to set an example.

There are many challenges to exclusive breastfeeding, and new moms need much more support at home and work, and in the broader society. But one thing is clear: Corporate formula marketing in hospitals provides no support and sends the wrong message. What can you do to end it? Sign this petition to Nestle, Mead Johnson and Abbott and demand that they end formula marketing in health care facilities. Then visit our campaign page for other action ideas.

Eva Seidelman is a Researcher for Public Citizen’s Commercial Alert.

 

Washington, D.C., hit near-record high temperatures on Wednesday. But that didn’t discourage more than a hundred dedicated activists from making the two-mile walk from Dupont Circle to the headquarters of Crossroads GPS, one of those outside groups spending millions of dollars to sway the elections. These brave souls were marching to demand that Crossroads co-founder and GOP strategist Karl Rove be held accountable for selling out our democracy to the highest bidder.

As we journeyed together through the streets of our nation’s capital, I heard people talking about lots of different issues—from jobs and retirement to health care and elections. Ultimately, however, most of their grievances boiled down to a single word: fairness. These folks were out in the scorching heat because they believe that American democracy is about every citizen having a voice in government. Not about how many dollars a person (real or corporate) can spend on TV and radio ads.

At our destination, all one had to do was look around to see what real democracy looks like. It’s not the small group of people who were upstairs in an air conditioned room, figuring out how to manipulate voters into favoring the candidates that corporations want in office.  Democracy is those who cared about their country enough to brave the heat for a chance to shout in the streets that people, not corporations, should have the power in our system.

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To JPMorgan shareholders who have witnessed a $25 billion drop in market value since the “London Whale” gambled away $2-plus billion: Look on the bright side. Think of this as a public service investment in sound financial policy education. As Congress continues with hearings on JPMorgan and CEO Jamie Dimon himself takes the stand tomorrow, many reforms now enjoy an urgent new argument. This expensive episode means we should act now on a number of reforms.

Implement a strong Volcker Rule
Banks shouldn’t gamble with a taxpayer backstop. This is why a strong Volcker Rule is needed. JPMorgan’s gambling partners allowed the bank to risk so much because they knew the U.S. taxpayer would make good on extraordinary losses. Within the details of the rule, JPMorgan’s ability to continue such betting in the future boils down to the interpretation of two words in the Wall Street reform law statute: “aggregate position.” The Senate authors explain that this means the bank can hedge a specific position, such as a single bond, which the bank purchased at various times, at various prices.  JPMorgan believes this means an entire portfolio, such as its ownership of 130 separate bonds. The Volcker Rule must be tightened, implemented and enforced.

Break up big banks
Failure of a bank JPMorgan’s size could cripple the economy. At some point, banks become too large to manage. Detail-focused CEO Jamie Dimon failed to catch what he subsequently called a “badly conceived” gamble.  Federal Reserve Bank presidents in Dallas and St Louis have called for a break-up.  Sen. Sherrod Brown (D-Ohio) introduced legislation recently to reduce bank size. The bill could even garner bipartisan support, as Sen. Richard Shelby (R-Ala.) voted for the same legislation two years ago, along with 32 other senators. In the House, Reps. Brad Miller (D-N.C.) and Keith Ellison (D-Minn.) introduced a parallel bill.

Increase bank capital
Even industry apologists who oppose reducing bank size and limiting risky activities agree that bank capital—what shareholders invest and lose when loans or gambles go bad—must be high. Fortunately, JPMorgan exceeded minimum capital standards, though many think mandatory levels should be doubled. Sen. Pat Toomey (R-Pa.) supports higher bank capital, a view he voiced at the both the May 22 and June 6 congressional hearings on the JPMorgan fiasco.

Reform banker compensation
The now-terminated chief investment officer earned 94 percent of her pay from “incentive compensation.” No wonder she swung for the fences, as Gary Gensler put it at the May 22 hearing. Gensler chairs the Commodity Futures Trading Commission, the primary financial gambling regulator. The Wall Street reform law specifically bars pay that promotes “inappropriate” risk-taking, but regulators are now more than a year late finalizing it.

Stop derivative deregulation
Wall Street shills, as Rep. John Tierney (D-Mass) labels some of his fellow members in the House, are moving nine bills. Of varying danger, one of them leaves offshore derivatives trading, such as JPMorgan’s London trades, free of basic regulation. Rep. Frank Lucas (R-Okla.), chairman of a key committee, cancelled a vote on two problem bills.

Bank officers should not oversee themselves
CEO Jamie Dimon sits on the New York Federal Reserve Bank, which supervises his bank. U.S. Sens. Barbara Boxer (D-Calif.) and Bernie Sanders (I-Vt.) introduced a bill May 22 that prevents active bankers from serving on the federal supervisory agencies. Massachusetts senatorial candidate Elizabeth Warren and former New York governor Eliot Spitzer think Dimon should step down from the New York Fed.

Good financial laws, unfortunately, require a disaster, such as the failed JPMorgan bet, or the 2008 crash, which has been an enormous cost to Main Street. That’s because of massive spending by Wall Street, which collectively spends $1.5 million a day lobbying. Let’s hope that the unintended investment by JPMorgan in reform advocacy secures substantial reform.

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