Small Business Encyclopedia:
Consumer Product Safety Commission (CPSC)
The Consumer Product Safety Commission (CPSC) was established in 1972 with the passage of the Consumer Product Safety Act. The primary responsibility of the CPSC is to protect the public from unreasonable risks of injury that could occur during the use of consumer products. The CPSC also promotes the evaluation of consumer products for potential hazards, establishes uniform safety standards for consumer products, eases conflicting state and local regulations concerned with consumer safety, works to recall hazardous products from the marketplace, and selectively conducts research on potentially hazardous products. The CPSC promotes the development of voluntary safety standards and under certain circumstances has the authority to issue and enforce standards and ban unsafe products. In all its activities the CPSC strives to work closely with private consumer groups, industry, the media, and agencies of various state and local governments.
Although the CPSC is an independent federal regulatory agency it does not have jurisdiction over all consumer products. Safety standards for trucks, automobiles, and motorcycles are set by the U.S. Department of Transportation; drugs and cosmetics are handled by the U.S. Food and Drug Administration; (FDA) and alcohol, tobacco, and firearms fall under the authority of the U.S. Department of the Treasury. Nevertheless, approximately 15,000 types of consumer products are regulated by the CPSC.
Early federal consumer safety legislation dealt primarily with foods, drugs, and cosmetics. The Federal Food and Drugs Act of 1906 (also known as the Wiley Pure Food and Drug Act) forbade the adulteration and fraudulent misbranding of foods and drugs sold through interstate commerce. Other early consumer legislation included the Meat Inspection Act of 1907 (amended in 1967 by the Wholesome Meat Act). In 1933 legislation was introduced to strengthen the Federal Food and Drugs Act of 1906. This legislation mandated the standardized labeling of food products, required that manufacturers prove drugs are safe for the purpose for which they are sold, and established a pre-market clearance procedure for new drug products. Many drug companies opposed this bill; they were joined by much of the nation's print media, which feared the loss of corporate advertising revenue. After a five-year battle in Congress, however, the bill was passed in 1938 as the Food, Drug, and Cosmetic Act. Amendments to the bill in 1962 established biennial factory inspections, disclosure through labeling of dangerous side effects, FDA approval of all new drugs, FDA power to remove dangerous drugs from the market, and the requirement that a manufacturer prove that its drugs are not only safe but also effective for its stated purpose.
The scope of federal consumer safety legislation broadened throughout the 1950s and 1960s. The Flammable Fabrics Act of 1953 established safety standards for fabrics used in clothing. The Refrigerator Safety Act of 1956 required that refrigerator doors have inside release mechanisms. The 1962 National Traffic and Motor Vehicle Safety Act established federal jurisdiction over motor vehicle safety, while the 1965 Federal Cigarette Labeling and Advertising Act required the famous "Caution: Cigarette Smoking May Be Hazardous to Your Health" label. Other pre-1972 consumer product safety legislation included the Radiation Control for Health and Safety Act of 1968, which dealt with radiation emission levels of electronic products, and the Poison Prevention Packaging Act of 1970, which established packaging standards to protect children from potentially hazardous substances.
In 1967 the National Commission on Product Safety was established. It was believed at that time that federal consumer safety legislation was ineffective because it took a piecemeal approach, targeting only specific products for regulation. Supporters of the commission contended that the government needed to establish legislative authority over broad categories of potentially hazardous goods and products. The National Commission on Product Safety was charged with identifying these broad categories of potentially hazardous goods and evaluating existing legal and voluntary methods for securing consumer product safety. The commission subsequently found that "the exposure of consumers to unreasonable product hazards is excessive by any standards of measurement." The commission also asserted that even though consumers must take some responsibility for their own safety, industry must also assume responsibility for the design and manufacturing of safe consumer products.
On the basis of their inquiry the commission recommended the creation of an independent federal regulatory agency and a presidential appointee to the commission to serve as a consumer advocate before the new agency. The commission also recommended that the new agency have the authority to issue safety regulations and standards. Thus, the Consumer Product Safety Commission was created in 1972.
Limited by budgetary realities, the CPSC was not a significant factor for much of the 1980s. In recent years, however, the CPSC has emerged as a more visible and vigorous protector of public safety. In 1999, for example, the agency (armed with a budget of $45 million) issued more than 300 product recalls, including recalls of more than 30 million toys that were deemed to be a potential health hazard to children. That same year it levied approximately ten times the amount of fines on companies that it had assessed a decade earlier. And Manufacturing News reported that the CPSC has dramatically cut its customer complaint response time in recent years. In 1999, for example, its average response time was less than 48 hours. In the late 1980s, by contrast, the agency's typical response time was nearly 50 days. Finally, the CPSC has launched new initiatives designed to address the explosion in e-commerce. The most visible of these efforts is Operation SOS—Safe Online Shopping, in which agency representatives investigate unsafe and/or illegal consumer goods that are made available over the Internet.
The CPSC consists of five commissioners, each appointed by the president of the United States with the advice and consent of Congress. One of the commissioners is appointed chairman. The CPSC is headquartered in Bethesda, Maryland, with regional offices in Chicago, New York, and San Francisco and field offices in various cities across the country. The CPSC also maintains a toll-free Consumer Product Safety Hotline.
Further Reading:
"Consumer Product Safety Commission is Back On Track." Manufacturing News. January 12, 2000.
Gooden, Randall. "Reduce the Potential Impact of Product Liability on Your Organization." Quality Progress. January 1995.
Postrel, Virginia. "When You're In the Danger Business." Forbes. January 25, 1999.
Siomkos, George, and Paul Shrivastava. "Responding to Product Liability Crises." Long Range Planning. October 1993.
