paper is focused on “consumer rumours,” which is defined as rumours
centred around a specific product or company with an intended purpose
of altering consumers’ purchasing habits.
a compelling, albeit distorted, representation of deeply held human
anxieties. Stories centred on common household products reflect
not only the importance of those products to the ordinary consumer,
but also that consumer’s mistrust of the large corporations that
manufacture the majority of those goods. The subjects of “mercantile
legends” are invariably companies that produce consumer goods rather
than raw materials or goods for industrial consumption. Public health
rumours most often focus on cancer, the most-feared disease in contemporary
society. Cancer rumours generally focus on allegedly carcinogenic
products. One example is the unsupported fear of sodium
lauryl sulfate, a common cosmetic ingredient.
of information through rumor manifests a basic mistrust of official
sources. Until the threat which the subculture perceives to be inherent
in wider culture ceases to be a motive, narratives which articulate
and validate the threat will be believed and communicated without
question. Due to their existence outside the mainstream, these marginalized
subgroups are unlikely to believe the logical refutations of a rumor
by the majority of society.
technology is particularly well-suited to the spread of rumours
and contemporary legends. A person who received an e-mail claiming
sodium lauryl sulfate, an ingredient commonly found in shampoo and
other cosmetic products, is a carcinogen, might try to verify the
truth of that statement by entering the term “sodium lauryl sulfate”
into an Internet search engine. The results of that search would
range from legitimate web sites published by the American Cancer
Society discrediting the rumor to more questionable web sites
validating the story and promoting natural health products that
do not contain sodium lauryl sulfate.
mixed results can occur for any Internet search, due to the self-regulated
nature of the medium and the commercial nature of search engines.
No outside entity rates web sites on the basis of reliability and
accuracy, and the order in which web sites appear is often commercially
determined by a fee paid to the operator of a particular search
engine. The first ten hits you get on any search...have been paid
for and [placement] is determined by how much they paid. The
ready availability of false or misleading health-related web sites—undifferentiated
from legitimate health information—represents a legitimate cause
dual methods of Internet transmission—rumours forwarded by e-mail
and “verified” by or sometimes originating from dubious web sites—are
self-reinforcing and extremely difficult to counteract. The ease
of transmission makes it nearly impossible to kill an Internet rumor,
no matter how outrageous, defamatory, or potentially damaging. The
following case study illustrates the operation of Internet hoaxes,
their potential for consumer exploitation, and the difficulty faced
by public and private actors in counteracting such rumours.
In the summer
of 1998, an anonymous e-mail claiming that a common cosmetic ingredient,
sodium laureth sulfate (SLS), was a carcinogen began
circulating the Internet. The Urban Legends web site dismisses the
e-mail as “[y]et another product scare in the form of an endlessly-forwarded
anonymous e-mail message [that] hit the Internet in mid-1998.” The
SLS e-mail actually represents a subtle marketing ploy.
Several monitors of Internet hoaxes have identified a
handful of companies selling all-natural cosmetic products as the
source of the rumor. “In trying to track down the source
of concern about SLS, I found repeated instances of unsubstantiated,
alarmist claims coming mostly from the purveyors of natural shampoos”.
The producers of all-natural shampoos and cosmetic products who
are the likely originators and intended beneficiaries of the hoax
are not named in the e-mail message—but their web sites confront
any concerned consumer who goes to the Web and searches for more
information on the safety of SLS.
trying to substantiate or disprove the truth of SLS claims
through their own Internet research will need to wade through a
significant amount of misleading chaff to find accurate information
on the safety of SLS. “[T]he majority of URLs returned in
a standard Web search on the keywords ‘sodium laureth sulfate’ all
point to versions of the same propaganda…Interestingly, all these
Web sites are maintained by ‘independent distributors’ for various
multi-level marketing companies hawking natural personal care products.”
Examples include web sites maintained by Neways and
an individual named Randy warning of “Cancer in the Bathroom.
In addition to helping shield the originators of the hoax
from liability by avoiding a direct connection between the perpetrators
of the false rumor and the sellers of the consequently attractive
SLS-free product, potentially significant legal implications
are attached to the methods in which consumers receive misleading
product information. A consumer who receives misleading information
through his or her own initiative (i.e. conducting a web search)
may be less protected than a consumer who is misled by information
foisted upon him or her (in the form of an unwanted forwarded or
clever element of the SLS e-mail is that it disparages an
ingredient and not a product. In targeting a common cosmetic ingredient,
used by numerous producers in multiple products, the rumor creates
a collective action problem. Companies, particularly those whose
products are not named in the e-mail, may not only lack sufficient
incentive to rebut the rumor, but may also be reluctant to draw
attention to the fact that their product contains an alleged carcinogen.
While laws protect the disparagement of specific products, no
legal protection is afforded to the chemical ingredients that may
be present in those products. (ST: Read this carefully, not
just at face value)
A third interesting
feature is the exploitation of scientific uncertainty to shield
rumourmongers from liability. The Neways web site deserves
special mention for its adroit web construction. The first page
of the web site is a legitimate news release detailing the dangers
of diethanolamine (DEA), a cosmetic ingredient that poses
a questionable but nonetheless scientifically arguable cancer risk.
At the end of the press release, visitors to the web site
may click on a hyperlink listing other harmful ingredients to avoid.
web site provides this description of SLS:
SLS is perhaps the most harmful ingredient in personal-care
products. SLS is used in testing-labs as the standard skin
irritant to compare the healing properties of other ingredients.
Industrial uses of SLS include: garage floor cleaners, engine
degreasers and car wash soaps. Studies show its danger potential
to be great, when used in personal care products. Research has shown
that SLS and SLES may cause potentially carcinogenic nitrates
and dioxins to form in the bottles of shampoos and cleansers by
reacting with commonly used ingredients found in many products.
Large amounts of nitrates may enter the blood system from just one
the distinction between rumours about DEA, which are supported by
at least one scientific study, and the absolutely unfounded rumours
surrounding SLS. Dr. Samuel Epstein, a frequent critic of DEA who is cited
in the Neways press release, does not extend his criticism to SLS.
“I am unaware of any evidence that sodium lauryl sulfate is carcinogenic.”
(Don Oldenburg, Consummate Consumer: Rhetoric or Reality?, WASH.
POST, Oct. 21, 1998)
web site mixes some truth—the use of SLS in high concentrations
as an industrial cleaner—with numerous qualifications and the implausible
claim that the reaction of SLS with other cosmetic ingredients
can cause cancer. Neways president Tom Mower
draws a fine distinction between claiming SLS is itself is
a carcinogen and that it can react with other compounds to pose
a risk of cancer. “While neither [SLS or SLES] is carcinogenic,
they both can react with compounds and form compounds that are carcinogenic.”
reliable source supports the contention that SLS is carcinogenic.
The Canadian Health Protection Branch, the Canadian counterpart
of the FDA, has issued an official statement on its web site discrediting
the Internet rumor. “[T]his e-mail warning is a hoax…Health
Canada has looked into the matter and has found no scientific evidence
to suggest that SLS causes cancer.” Neway’s claim that
SLS can become carcinogenic through interaction with other
cosmetic ingredients is discredited by John Bailey, director of
the FDA’s Office of Cosmetics and Colours, who states, “We cannot
find anything that would indicate under conditions of use in cosmetics
and over-the-counter drugs that the use of sodium lauryl sulfate
is harmful as a cosmetic ingredient when the cosmetic is properly
SLS e-mail possesses at least enough superficial plausibility
to create consternation among consumers. It looks like the ‘NEWAY’
company has come up [with] a brilliant idea to sell millions of
dollars of theirs, and any other ‘la natural’ products to the accepting
public. The self-regulating nature of the cosmetics industry
diminishes the incentive for the FDA to engage in a full-fledged
battle against Internet rumours directed at cosmetic ingredients
Public and Private Responses to Consumer Rumours
the economic harm of Internet hoaxes may be difficult to quantify,
the case studies illustrate the damage such rumours can inflict
on a product’s or corporation’s reputation, as well as the
negative impact on consumer confidence. The likelihood that injury
will result from the unrestricted circulation of false consumer
rumours over the Internet should serve as a stimulus for the government
to take action. Collective action problems frequently hinder an
effective response in cases where there are multiple manufacturers
of a product or ingredient targeted by an Internet hoax.
Such rumours are analogous to false or disparaging
advertising and frequently are spread by business rivals.
ability to identify the parties responsible for an Internet hoax
is a necessary prerequisite to the exercise of either government
enforcement or private legal remedies. The anonymity
of the Internet, as well as the shadowy nature of rumours, makes
this a difficult but not impossible task. The task faced in tracking
down the originator of a consumer rumor is slightly easier, since
in most cases there will be an obvious beneficiary of the rumor,
giving a logical starting point in their investigation. If an agency
elects to use its resources to discover the source of an Internet
hoax, it will likely be successful in the attempt, enabling more
robust enforcement measures.
question is whether Internet rumours have enough of a connection
to a product to be considered labelling. In order to be considered
labelling, the printed matter must “accompany” the product for sale.
Regulatory interpretation and case law, which have liberally
interpreted the meaning of labelling, support the FDA’s ability
to regulate the home pages of pharmaceutical companies as labelling.
Past precedents could be extended to support the regulation of Internet
sources—pamphlets promoting the efficacy of a product, books advocating
certain health regimes, and even a radio program generally touting
the benefits of vitamins have all been considered fair game for
regulation as misbranding. The FDA could likely regulate, for
example, the unfounded bashing of SLS found on Neways’
home page as misbranded labelling accompanying the company’s products.
rumours are in some ways similar to the negative advertisements
that increasingly mar political campaigns. Rather than building
up one candidate (or product), the choice is made to attack the
alternative. While the agency statutes and regulations generally
are designed to constrain excessively positive claims about a manufacturer’s
own product, they also govern the unfair disparagement of a competing
of the Federal Trade Commission act, the agency possesses broad
authority to ban “unfair or deceptive acts or practices.” Additional
sections of the Act prohibit the dissemination of misleading claims
about food, drugs, medical devices, health care services, or cosmetics.
The FTC Act has been interpreted to apply with equal force to Internet
advertising. “The FTC Act prohibits unfair or deceptive advertising
in any medium.” If classified as an advertisement, Internet
hoaxes that contain a misrepresentation or omission likely to mislead
a reasonable consumer to his or her detriment would be considered
misleading under the §5 of the FTC Act; hoaxes that
do not present a countervailing benefit to consumers or competition
fall under the statutory definition of unfair.
crux of the problem is whether Internet hoaxes can be classified
as advertising. Promotional web sites listing or even linking to
misleading consumer information that benefits their product presumably
would be covered, but anonymous e-mails and posted messages
are more problematic. The FTC does have the ability to regulate
false or deceptive statements made by third parties, which include
advertising agencies, catalogue marketers, or web site designers.
remedy of particular value to the victims of an Internet hoax is
the FTC’s power to order corrective advertising in cases where the
mere cessation of a false or misleading advertisement is insufficient
to dispel lingering consumer misperceptions. Corrective advertising
generally involves the retraction of a positive claim about a manufacturer’s
own product, but can include corrections of disparaging claims about
another’s product. In addition to enjoining the dissemination
of false or deceptive Internet advertising, the FTC can impose a
lifetime ban on participation in Internet commerce for repeated
or especially egregious violations.
legal remedies are available to maligned companies when the government
is unable or unwilling (as with the SLS scare) to step in.
While government agencies are concerned with the impact on consumers
or perhaps an indirect attack on their own reputation, corporations
are much more directly impacted by Internet hoaxes. “Next to
an act of terrorism, what corporations fear most is that they may
be targeted with an outlandish tall tale.”? If preventive strategies
fail, corporations targeted by a rumor may choose to pursue different
strategies. One option is ignore the rumor. Other rumours, however, may require more aggressive measures.
Companies can sue under a variety
of legal theories: defamation, common-law unfair competition, business
disparagement, tortious interference with economic relations, fraud
and various state statutes. Available claims will vary based on
the factual particulars of a specific hoax.
hoaxes present a new twist on the classic problem of rumor as a
tool of unfair competition. The overall response, while
adequate, is cautious and strictly reactive. The current strategies
employed to combat Internet hoaxes may serve to contain the consumer
confusion and reputational damage caused by a specific rumor, but
do nothing to deter other unscrupulous operators from launching
whisper campaigns of their own. A tailoring of regulations
and a concerted enforcement effort will be necessary to address
the increasing problem of consumer rumours.