The Challenge of Keeping Hazardous Consumer Products Off the Market

According to a recent report by Congress’s independent watchdog agency, the U.S. Government Accountability Office (GAO), American consumers may face unwarranted risks of death or injury from some of the products they buy. The Consumer Product Safety Commission (CPSC) – the independent agency charged with “protecting U.S. consumers against death or injury from unsafe products” – often struggles to meet its mandate, according to the GAO.

The report found that the CPSC has trouble responding quickly and effectively to new and emerging product risks. For example, the CPSC has long struggled to protect consumers from hazards associated with window coverings. In the early nineties, the Commission received reports of children becoming entangled in window blind cords and, ultimately, dying. In 1994, the CPSC began working with industry representatives, individual companies, and consumer groups on voluntary recalls and safety standards for window blinds. This October, after two decades of trying to reach a consensus, the CPSC voted to begin a process to set mandatory standards. During the intervening years, nearly 200 children died in window cord accidents.

This lag between risk identification and risk resolution is not uncommon, according to the GAO. While the CPSC has jurisdiction over a broad range of products, its regulatory power is constrained by several factors, including resource limitations, barriers to information sharing, and an approach to regulation and enforcement that relies heavily on industry’s voluntary cooperation.

The GAO’s current findings are consistent with a 2012 GAO report on the CPSC, which focused on the consequences of legal limits on the CPSC’s ability to inform the public about risky products. For example, the CPSC cannot disclose information that would identify a particular manufacturer without giving the manufacturer advance notice and the opportunity to challenge the accuracy of the information the CPSC plans to disclose. CPSC staff told the GAO that this can prolong the time it takes to get unsafe products out of homes.

The CPSC faces additional restrictions on sharing information with other government agencies involved in health, safety, or consumer protection activities. While the CPSC can disclose some information about potential hazards to foreign governments that agree to maintain confidentiality, the CPSC cannot guarantee to keep confidential data that other countries’ regulators share with the United States. This lack of reciprocity, the GAO suggests, can lead to delays between when a foreign government learns of a hazardous product and when that government shares this information with the CPSC.

The statutory authorities under which the CPSC operates also drive delays. Once the CPSC decides that a product is hazardous, the Commission can pursue a compliance action to force the manufacturer to issue a recall, which can be time-consuming and expensive. CPSC officials told the GAO that, because of this time and expense, they view compliance actions as a last resort, preferring instead to work with a manufacturer to conduct a voluntary recall. However, this too can be a lengthy process: even successful voluntary recalls can take a long time to start because of protracted negotiations.

The CPSC’s reliance on industry groups to establish voluntary standards can also prolong response time. The CPSC can designate staff to attend meetings and provide feedback to organizations crafting voluntary standards, as it did with the Window Covering Manufacturers Association‘s efforts to address window-cord strangulation. However, the CPSC has no decision-making power nor does it have legal authority to enforce any voluntary standards that industry groups adopt.

Still, voluntary standards and recalls are not the CPSC’s only tools. The Commission can also establish mandatory standards through rulemaking. In fact, the CPSC has used rulemaking on numerous occasions, including when it recently introduced a ban on high-powered magnets hazardous to children.

The CPSC’s cumbersome rulemaking process, however, can detract from the usefulness of this authority, according the GAO. Under the Consumer Product Safety Act, the CPSC can only promulgate a rule if the rule is reasonably necessary to deal with an unreasonable risk. The rule’s expected benefits must “bear a reasonable relationship to its costs,” and the CPSC must use the least burdensome means of reducing risk. Further, in cases where a voluntary standard exists, CPSC can only promulgate a rule if it shows that substantial compliance with the voluntary standard is either unlikely or would not adequately address the risk.

Even if these conditions are met, any final rule must include a cost-benefit analysis that evaluates the proposed rule, analyzes the alternatives to that proposal, and explains why those alternatives were rejected. CPSC officials told GAO auditors that these requirements can complicate and prolong rulemaking.

The GAO report does not make recommendations. It does, however, discuss several options for improving the CPSC’s responsiveness to risks. These options, based on discussions with various stakeholders, include:

• Giving the CPSC greater ability to prevent hazards from entering the market.
• Giving the CPSC expedited rulemaking authority to make it easier to adopt mandatory standards.
• Giving the CPSC more authority to stop international imports of unsafe products.
• Giving the CPSC the resources to improve its ability to analyze data.

Each of these options would require tradeoffs. For example, requiring manufacturers to demonstrate that products are safe to enter the marketplace would better protect customers; however, it would impose costs on manufacturers and strain the CPSC’s resources.

Shifting the burden of proof to manufacturers would represent a shift towards a “precautionary principle” approach that is more common in Europe. Although some of the stakeholders the GAO consulted were in favor of shifting the CPSC’s regulatory paradigm to give it greater pre-entry power, most – including some consumer representatives – felt that an across-the-board application of the precautionary principle would be impracticable and not necessarily effective.

Stakeholders were a bit more mixed in their views about allowing the CPSC to pursue expedited rulemaking, as the Commission was authorized to do under the Consumer Product Safety Improvement Act of 2008 (CPSIA). CPSIA required the CPSC to convert voluntary standards for certain consumer products into mandatory standards using the normal federal rulemaking process without conducting the cost-benefit analysis that the Consumer Product Safety Act requires. Stakeholders generally agreed that this expedited process could improve response time, but some CPSC officials cautioned that the cost-benefit analysis requirement should not be given short shrift.

Ultimately, the CPSC is under no obligation to respond to the GAO’s report. However, Congress’s repeated requests for GAO reports on the Commission over the last five years may indicate that inquiries into the CPSC’s effectiveness are likely to continue.