The Emerging Role of Consumer Research At the Federal Trade Commission: Views of the Players

Michael L. Rothschild, University of Wisconsin
[ to cite ]:
Michael L. Rothschild (1980) ,"The Emerging Role of Consumer Research At the Federal Trade Commission: Views of the Players", in NA - Advances in Consumer Research Volume 07, eds. Jerry C. Olson, Ann Abor, MI : Association for Consumer Research, Pages: 101-103.

Advances in Consumer Research Volume 7, 1980     Pages 101-103

THE EMERGING ROLE OF CONSUMER RESEARCH AT THE FEDERAL TRADE COMMISSION: VIEWS OF THE PLAYERS

Michael L. Rothschild, University of Wisconsin

[The views reflected in this summary statement are those of the individuals present at the session and do not represent the official views or policies of the Federal Trade Commission or any related or adversarial parties.]

PURPOSE

The purpose of this session was to allow for discussion of three sets of issues:

1.  An historical perspective of the role of consumer research at the Federal Trade Commission. This perspective was presented by three consumer researchers who have been at the FTC during the past decade and have observed the changing role of consumer research in hearings. Speakers were William L. Wilkie, H. Keith Hunt and Dennis McNeill.

2.  A statement of needs by several of the legal players or observers of the legal players. In this portion of the discussion the speakers discussed their needs in terms of the consumer research product which they used, what made research "good" and "useful". Speakers in this session were Thomas Donegan, Kenneth Bernhardt and Gary Ford of the Federal Trade Commission and Herbert Dym of Covington and Burling.

3.  A statement of how consumer researcher players are currently meeting these needs. Speakers discussed some of the difficulties and pressures of meeting the needs of the legal players. Foci here were on doing and defending contract research; on supplying expert testimony and on being a consumer research consultant over an extended period. Speaking on these foci were, respectively, Michael L. Rothschild, Michael L. Ray and Joel B. Cohen.

In sum, the goal of the session was to apply the marketing concept with regards to consumer research at the FTC. On the one hand the users of the research discussed their needs; on the other the producers of research discussed the difficulties of meeting needs. It had been felt, a priori, that such a dialogue would lead to more useful future consumer research input and that as the amount of research done in the future increased, all parties would have a more clear cut set of guidelines. The future will show if this goal was met. The major portion of this summary deals with the guidelines suggested by the various speakers.

AN HISTORICAL PERSPECTIVE

To set the stage for the guidelines which were to be presented, an historical overview of the role of consumer research at FTC was first presented. Consumer research and consumer researchers have been linked with the FTC for approximately the past eight years. During that time the role of consumer research and that of FTC have changed dramatically.

In the late 1960's the FTC played a fairly passive role in the regulation of consumption related activities. This perspective changed in the early 1970's when the FTC was given a mandate to become more active. During this time the Commission began to search for the boundaries to that mandate on a case by case basis. There was very little funded consumer research and the role of consumer researchers was more implicit than explicit.

One block to efficient use of research was the "hearsay rule" which implied that any subject or respondent who participated in research needed to be available for cross examination so that the hearsay nature of the research report could be validated. By the mid-1970's the "hearsay rule" was overturned opening the doors for the use of more research studies in hearings.

A second major change in FTC proceedings came about when the Commission began to seek rulemaking powers or industry wide directives as opposed to earlier case by case judgments against single firms. This change opened the doors for still more consumer research.

As more research was used and its overall impact increased, the impact of any one researcher or piece of research diminished and the notions of convergent validity across several studies began to be used. Research could by this point be classified into three categories:

1.  data collected as factual underpinning for rule-making;

2.  data collected to examine tactical alternatives available as a result of rulemaking; and

3.  data collected to evaluate rules on a posthoc basis.

During the past decade questions concerning the admissibility of research data have changed from those concerning the "hearsay rule" to those concerning the validity and reliability of a study. The users and uses of research have become increasingly sophisticated during this time period.

Currently the focus of research at FTC hearings concerns impact evaluation. Empirical evidence has become a key part of hearings and three types of impact evaluation studies are being used.

1. Prospective Impact Evaluation. This research attempts to predict the future impact of a ruling.

2. Retrospective Impact Evaluation. This research attempts to assess the impact of a program after it has been in the field for some period of time. To make such an assessment prior baseline studies must also be done.

3. Complaint Monitoring. This research attempts to assess whether firms under the jurisdiction of a rule are indeed complying with the rule.

A SET OF GUIDELINES FOR CONSUMER RESEARCHERS

The following guidelines are a composite of those presented during the session. There was remarkable concurrence across the several speakers as to what key issues should be stressed (given that many of the discussants rarely concurred on any points in their roles as adversaries in FTC hearings).

1. Be objective. It is the lawyer's duty to be an advocate in a hearing and to represent his client as well as is legally possible; it is the researcher's duty to maintain objectivity and independence. Try not to get caught up in the advocacy nature of the proceeding. This will be difficult to do as you will be defending your position or your research.

Although you will become an advocate of your ego and your work (due to human nature) try not to become an advocate concerning the issues. Objectivity is important in doing research and in presenting testimony. When objectivity is lost then the researcher no longer performs a valuable function and, in many cases, s/he is left open to attack. This is especially true for original research where biases can be easily seen by other researchers. If one cannot maintain professional and ethical standards of objectivity, then one should not become involved in hearings as a researcher.

In addition one should not become a researcher because of political motivation; it is necessary to separate one's own views and/or beliefs from the data and/or theory which one is presenting. Alternatively one should have an interest in contributing to policy making and should not become involved as a means to obtain funding.

2. Know the issues of the case. Hearings are very focused events. If one has not dealt with the issues of the case, then one cannot make a contribution. Be aware of the concerns of all interested parties and attempt to deal with them. Read the proposed rule before beginning to work. Exact specifications can be found in the Federal Register. Refer to the issues often as work progresses to insure that no deviation from the issues has occurred and that the work is in the perspective of the focus of the hearing.

3. Be faithful to basic issues of research epistemology. Consider and apply all the tenets of good research that were taught in your doctoral seminar. All work is challenged on the basis of lack of internal validity, external validity, reliability, proper sampling design among other central issues. Make sure these will withstand the scrutiny of expert analysis. Show also that the research was conducted by skilled professionals, that interviewers were properly trained, that adequate controls and supervision were used and that validity checks were properly employed.

4. Expect to be opposed by an expert. Every concerned party will have two types of experts. If one's findings and/or testimony are not consistent with the goals of a concerned party, one can expect to encounter both types of experts. A direct encounter will take place with a lawyer who in most cases is quite knowledgeable in research issues but is not a research expert. This shortcoming is more than compensated for by an expertise in logic which allow him/her to quickly uncover logical flaws. It is foolhardy to underestimate the value of this skill. An indirect encounter will take place with a consumer researcher employed by the opposing party. This person should be expected to be at least one's equal in all phases of research and should be expected to note all flaws in a study or expert statement.

One can avoid some problems by anticipating these persons and planning accordingly. Often one can anticipate which colleagues will be analyzing one's work and design the work to deal with any disparate points of view which might exist.

5. Don't oversell the study. All work has limitations. Admit them. Be a credible witness. A good lawyer will gain this admission after twenty minutes of cross examination without one's cooperation but during this time one's credibility as an objective witness has suffered. Do not generalize beyond the scope of the data.

6. Know your role and courtroom procedures, and work closely with your attorneys and staff. These points are vital from design through hearing. Design your work so it can play the proper role in the overall legal strategy. Work closely with the attorneys in the design so there will be no surprises later. Apprise the layers of all options at all stages of the research and assist in the evaluation of these options. Final research decisions must be made by the (objective) researcher and must meet academic and/or industry standards. In addition the researcher should realize that his/her role is to assist a staff by providing information; the researchers role is not to guide the staff or to redefine the scope of the hearings. If one disagrees with the Trade Regulation Ruling Proposal one can work with an opposing party or one can publish-these views to make them public.

7. Try to avoid jargon. Presiding officers are not trained in research and generally do not have a researcher on their staff. This makes it incumbent upon researchers to speak and write in lay terms. While one is questioned by an opposing lawyer, one should be speaking to the presiding officer (who will be making the ultimate evaluations in the case). Technical reporting is more appropriate in the written report than in the oral hearing.

8. Don't dispose of any records, data, instructions. Every scrap of information relating to the research may be required as evidence. Missing pieces can lead to disqualification of a study. On the other hand, all minutia are subject to questioning and while the researcher may not clearly remember coding instructions from a pretest done 18 months earlier, the opposing staff will have recently examined this piece of evidence.

9. Be prepared. Try to anticipate questions that may arise in hearings. Know that the lawyer has total control over the direction that the cross examination will take. The witness can only (and must) answer (all) questions.

One way to be prepared is to keep accurate records of all the minor decisions which are made during the design of the research. You are likely to be questioned as to the rationale behind some of the many decisions concerning design, sampling and/or analysis. Accurate records of these decisions will help in preparing for testimony.

10. Be selective in the cases in which you get involved. If you are going to be an expert witness, choose those cases where you can take a strong point of view, where what you would say seems obvious, where an expert is needed for adding credibility to the testimony. In addition only choose important cases. Don't get involved in cases which are not meaningful. If you will need to assess prior research, only go to cases where there exists non-advocacy research.

FOR MORE INFORMATION

For more information on what is happening at FTC one should consult the Federal Register. A six months agenda of issues is published in the Federal Register on August 15 and February 15. In the November 15 issue of the Federal Register one can find a listing of major regulations under consideration. Finally, interested parties can be put on the mailing list for the FTC News Summary:

FTC News Summary

Federal Trade Commission

Washington, D.C. 20580

or should contact consumer researchers currently on the staff of FTC.

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