Small Biz: Don’t Worry, Be Happy

CPSC staff has determined that the publicly available database of consumer complaints required by CPSIA will have little or no economic impact on small businesses.

This finding was included in a notice of proposed rulemaking (NPR) which was discussed by the Commission last week and on which we will be voting Thursday, April 21.  The discussion of this issue will be webcast (at 9 am EDT) on the CPSC website.  

The database is scheduled to be operational in March 2011, and will provide a readily searchable format for people to access reports of harm caused by consumer products submitted by consumers, plaintiffs’ attorneys, advocacy organizations and trade competitors, among others on a rather expansive list. We are planning a national education effort to encourage the public to report incidents of harm caused by consumer products. While we do not know how many reports we will get, it could be quite significant. 

Though the staff will review each submittal before posting, staff will not investigate each incident for accuracy.  Instead, manufacturers will be given 10 days to comment on the accuracy of reports identifying their products.  It is the responsibility of the manufacturer to provide proof of any inaccuracy.  I can see where inaccurate information may be posted and seen by consumers for an indefinite period of time before a correction is made, if a correction is ever made at all.  This would be a great disservice to consumers and could adversely affect the sales and use of a product.   

 Here is what the proposed rule says about how the data base will impact small businesses:

 because of their smaller sales volumes, small manufacturers are less likely to experience any impacts.  And, even if a small firm chooses to respond to an incident report, the amount of time to do so would not likely be more than a few hours . . .

Note that reputational harm due to an inaccurate report is not considered an adverse impact on business. 

I am not comfortable with the staff’s assertion that the new public database will not have an economic impact on small entities and discussed this point during our public briefing last Wednesday.  However, I’m not the expert; you are.

  •  Do you really think because your sales volumes are smaller, it is less likely that your products will find their way into this database? 
  • If someone files a complaint, it will only take a few hours to respond (and deal with the ensuing investigation by staff)? 

If you disagree with our staff that taking a few hours out of your business day to respond to inaccurate reports is of no consequence, then you need to let us know that.

When the Notice of Proposed Rule for the Publicly Available Consumer Product Safety Information Database is printed in the Federal Register it will be posted on CPSC’s website and you will have an opportunity to comment.  Let us know what you think!

2 Responses to “Small Biz: Don’t Worry, Be Happy”

  1. 1 ToyMan April 13, 2010 at 9:38 am

    “…staff will not investigate each incident for accuracy. Instead, manufacturers will be given 10 days to comment on the accuracy of reports identifying their products…”

    Really? The CPSC will turn the other cheek to libelous reports? The actions taken by this commission are bordering on truly unsettling.

  2. 2 Chuck Samuels April 12, 2010 at 5:15 pm

    You are absolutely right, of course. Smaller businesses could be profoundly affected by bad information on the data base. Although mathematically they may be less likely, ceteris paribus, to have a comment about their product posted, if they do they will be generally less prepared to respond to it and given their generally smaller product offering, posting of bad information could be disproportionately harmful. In many cases, it will take far more than a few hours to research and evaluate proposed listed information which may not have sufficient identifiers to track it down or may be intentionally deceptive. I hope small business advocates will take this proposal very seriously. It may be smalll businesses dont get a “break” in this scheme because safety is equally important regardless of the size of the manufacturer or importer but lets at least be clear about the fact and consequences of this policy judgement.

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