The Database That Ate American Business

Posted: Apr 08, 2010 9:12 PM

Very few people outside of the commissioners and employees of the Consumer Products Safety Commission, a few business lawyers and the legion of left-wing so-called "consumer activists" know much about the countdown to the new "database," but by this time next year American business will be reeling from the launch of what will become a government sponsored virtual bulletin board for the serial slandering of American manufacturing.

Reputations will be ruined and brands deeply damaged once the Congressionally-mandated internet bulletin board becomes operational. Here's the benign summary of what the law requires, as interpreted by the CPSC in a report to Congress :

To meet the requirement for a public database, CPSC is planning to build (working name only – final still to be determined), which will be a single central location where consumers can go to report product safety incidents, and to search for prior incidents and recalls on products they own, or may be thinking about buying. In conjunction with the web site launch, CPSC will also conduct a public awareness campaign to raise awareness of Sounds wonderful, right? But how will it operate in reality?

Understand that every "report" received by the CPSC will have to appear on the database, and not just reports of actual injury but also of threat of injury.

And anyone who cares to make the report --activists, plaintiffs' lawyers, busybodies, disgruntled employees etc-- can do so with their anonymity guaranteed. Manufacturers whose products are slandered on this site will be allowed to respond, but the agency has a total of just over 500 employees, and they must oversee the entire process. Anyone care to guess how quickly the agency's resources will be overmatched by a flood of trolls and mud-slingers?

Congress obviously loved the idea of providing "internet tools" to consumers who are upset with any particular product, but the staffers who wrote this piece of legislation must be unfamiliar with how open forums on the internet actually operate. For a taste of the absurdity of comments received in such a place, sample the comments below for the usual trolls who show up to spew and stomp their virtual feet. Amusing stuff for an opinion columnist, but deeply damaging for a business trying to sell product.

A few lawyers specializing in CPSC law have begun to warn their clients of the perils ahead, especially when the plaintiffs' bar begins to both hunt for clients among the postings and to use the "reports" found there in courtrooms far and wide as evidence of a pattern or practice of corporate indifference to injury. My colleague Gary Wolensky gave a presentation to the Sporting Goods Manufactures Association this week on the need for every manufacturer in America to design now a response strategy to roll out when the database goes live next spring. Rob Neppell of opined on my show last week that any manufacturer in the country that isn't already methodically scanning the web for mentions of its products is far behind the information curve, a late start that will become lethal if the companies aren't prepared to monitor and effectively respond to the "reports" to the database.

But even with the best lawyering and real-time monitoring it is hard to imagine American manufacturing being able to keep up with a flood of anonymous "reports" about the dangers posed by their products. The old Mark Twain rule about a lie being half-way around the world before truth has its boots on is even more obviously true in an era of instant connectivity to the global information superhighway.

Congress has ordered the CPSC to arrange for open-season on American manufacturing. If the Congress is returned to saner hands this November perhaps this train wreck can be averted, but don't count on it. American business is about to take another one on the chin.

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