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FTC Baby Formula Shortage Inquiry Overview:
- Who: The Federal Trade Commission (FTC) has launched an investigation into the national baby formula shortage, and said it intends to prosecute anyone taking advantage of the situation to make money
- Why: The FTC says it will crack down on those using bots to sell formula at inflated prices, and those scamming parents
- Where: United States
The Federal Trade Commission (FTC) has launched an investigation into the national baby formula shortage and said it intends to prosecute anyone taking advantage of the situation to make money.
In a press release issued May 24, the FTC said it was also seeking public comment to determine if any businesses are taking advantage of families, and how business practices might be contributing to the shortage.
The FTC said it intends to investigate and seek to “fully enforce the law against” anyone who deceives, exploits, or scams American families trying to buy infant formula.
It specifically addressed those who use online “bots” to automatically purchase and then resell the formula at exorbitant prices.
“While reselling these products is not illegal and may serve a useful function, using ‘bots’ or other automated tools to divert large amounts of supply of life-sustaining products from ordinary retailers and then prey on desperate families may constitute an unfair practice under the FTC Act,” the statement said.
It said it issued notices last week warning consumers about scammers that are tricking parents into paying exorbitant prices for formula that never arrives, and that it will continue to police the act.
FTC To Look Into Baby Formula Availability
The FTC said it also intends to examine whether infant formula manufacturers and distributors are engaging in unlawful forms of economic discrimination that may be limiting the availability of formula at certain retailers.
It is also launching a public inquiry into the infant formula market to try to identify the factors that contributed to the shortage or hampered our ability to respond to it, it said.
The lessons learned from the incident will inform its enforcement and policy work in other industries, it said.
The public is asked to file its comments by June 24, including any information it might have regarding steps agencies might have taken to inadvertently contribute to the fragility of the supply chain.
The news comes after Abbott Nutrition recently came to an agreement with the U.S. Food and Drug Administration which will allow the company to reopen its baby formula plant in Michigan.
The plant was closed in February as regulators investigated the source of a salmonella and Cronobacter sakazakii contamination following the deaths of two babies who had consumed Abbott’s Similac PM 60/40 baby formula.
The FDA and Abbott have now reached an agreement on a reopening plan in the midst of an ongoing nationwide shortage of baby formula, with the latter saying it would have its plant in Sturgis, Michigan back up and running on June 4.
Have you been impacted by the nationwide baby formula shortage? Let us know in the comments.
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