Consumer Protection




Wal-Mart Stores Closed Over Organic Pork Scandal, Management Culture
Asia Pacific

China Daily reports that the Chongqing Administration of Industry and Commerce (CAIC) has ordered the temporary closure of 13 Wal-Mart stores, and issued 2.69 million yuan (US$421,894.58) in fines relating to the improper labelling of ordinary pork as organic pork. CAIC official Zuo Yong reportedly said that the mislabelling “is not an isolated case, but a reflection of the company’s dysfunctional management mechanism”.

Reportedly, Wal-Mart was also fined in March 2011 after being found to be selling expired duck meat in a Chongqing store, adding to a list of 21 local government punishments for improper advertising and substandard food since 2006. The CAIC reportedly alleges that the problems are an indication that the company are prioritising its own profit interests ahead of consumer concerns.
China Daily: Loopholes suspected in Wal-Mart management (12 October 2011)
(Source: China Daily)


Citigroup Takes Backseat Over Compliance Investigation
Asia Pacific

The Japan Times reports that Citigroup Inc (Citigroup) is no longer soliciting clients for some of its products in Japan, while it awaits the outcome of a Financial Services Agency investigation into the bank’s alleged failure to fully disclose product risks to customers. Reportedly, Citigroup has directed its Japan retail unit, which oversees 32 branches across Japan, to refrain from marketing financial products including investment trusts and foreign currencies until further notice. According to The Japan Times, this will be the third time that Citigroup has been investigated by Japanese regulators since 2004.
The Japan Times: Citigroup halts soliciting for some retail products (12 October 2011)
(Source: The Japan Times)


Food Co Wins Weakened Advertising Guidelines
Americas

The US Federal Trade Commission (FTC) has announced that it has testified before a US House of Representatives hearing on the FTC’s efforts to help address childhood obesity. The FTC, together with the Centers for Disease Control and Prevention, the Food and Drug Administration and the US Department of Agriculture, formed the Interagency Working Group on Food Marketed to Children (IWGFMC) in 2009 to respond to childhood obesity. The IWGFMC released “proposed voluntary principles to guide industry self-regulation for public comment in April 2011″. The FTC’s testimony explains that in response to the comments received, the IWGFMC is “considering making significant revisions to its initial proposed principles … including revising the marketing principles to more narrowly focus them on those techniques that are used most extensively to market to children”.
FTC’s media release (12 October 2011)

Bloomberg reports that the FTC’s scaling back of its proposed guidelines to limit advertising junk foods to children is in response to industry pressure. Reportedly, large companies including Nestle and Kellog Co (Kellogs) resisted the FTC’s April 2011 recommendations which included limiting advertising for food with added sugars, salt and saturated fat through “child- or teen-oriented” advertisements. Kellogs reportedly argued that the recommendations would impose “severe financial harm” on the company because it would have to remove Tony the Tiger from its Frosted Flakes boxes. Nutritionists have reportedly criticised the FTC’s softening of the guidelines.
Bloomberg: Foodmakers Win Scaled Back Marketing U.S. Guidelines for Kids’ Snack Foods (13 October 2011)
(Source: FTC; Bloomberg)


Credit Card Companies Sued for Price Fixing
Americas

Bloomberg reports that Visa Inc. and MasterCard Inc. have been sued by a trade group representing operators of automated teller machines (ATM), who claim that the two companies fix prices and suppress competition among ATM networks. The plaintiffs are reportedly alleging “antitrust violations for restricting independent ATM operators from charging varying prices for customers using alternative networks such as STAR, Shazam Inc. or TransFund”.  Due to a uniform agreement, “operators can’t charge less for transactions over a network that competes with Visa and MasterCard, according to the complaint”, reports Bloomberg. 
Bloomberg: Visa, Mastercard Accused of Price Fixing by ATM Operators  (13 October 2011)
(Source: Bloomberg)


Samsung and LG Electronics Companies Investigated for Price Fixing
Asia Pacific

The Korea Herald reports that electronics companies Samsung Electronics and LG Electronics are under investigations by the Korean Fair Trade Commission (KFTC) for fixing the prices of televisions and laptop computers. Reportedly, both companies were charged by the KFTC in October 2010 for fixing the prices of air-conditioning units and televisions.
The Korea Herald: Samsung, LG Electronics under investigation for price-fixing (13 October 2011)
(Source: The Korea Herald)