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While climate change is the most pressing issue for the long-term well-being of humanity, the environment is only one issue where big businesses might be regulated to minimize harm. Such areas are included under the umbrella of public interest, that is, issues that affect the health and well-being of the general population. Ideally, the government should work with private-sector businesses to find a way that businesses can flourish without encroaching on matters of public concern like clean air and safe drinking water.
The term was first invoked in the Transportation Act of 1920, where the federal government established that railroads should only provide new lines that were in “the public interest.” The term was invoked again in the Radio Act of 1927, which granted the government the right to regulate radio airwaves, issue licenses to broadcasters, and assure that use of radio stations was in accordance with “the public interest, convenience, and necessity.” In both instances, it was left open for interpretation exactly what the public interest was. However, in both cases, it was recognized that the private businesses also provided an essential public service and obligations on the parts of owners.
Transportation and public airwaves continue to be two areas where government regulation is accepted as necessary. For example, all communities rely on transportation; a completely private transportation system would put people at the mercy of big business. This was the fear (and in some cases, the reality) of the railway system at the turn of the last century, which led to the Transportation Act and earlier bills that attempted to exert some control over the private companies that operated the railroads.
In the same way, modern social media companies have come to dominate the internet, much like a few networks dominated the airwaves, and it is largely unregulated, leading to hate speech, violence, and broadcast that may not be in the public interest. While Facebook registers a person by name, and posts are supposed to be associated with an actual person, there are many ways around it, leading to abuse and misinformation. YouTube allows, in effect, anonymous posts that can be used for unsubstantiated claims, and even illegal content. From Twitter to Instagram to SnapChat, social media channels that leverage consumer-created content are constantly at risk for abuse. While the companies may champion free speech while denying their role, part, or responsibility for how those public media channels are used, the government, as we’ve observed in the past, can raise the issue of the public interest.
EXAMPLE
Perhaps the best-known example of an attempt by social media to curb speech for the public good is Twitter revoking then President Trump’s account when he used it as a platform to claim the 2020 election had been stolen. Following mob violence by supporters on January 6, 2021, at the Capitol, Twitter felt it was in the public interest to suspend the account. It was later restored after Twitter was acquired by Elon Musk.There can be considerable tension between government and industry. As you have already learned, the federal government has passed laws regulating business, such as ensuring worker safety and preventing discrimination. You have learned there is a robust debate concerning the environmental impact of business and how it affects communities around the business and the long-term health of the planet. There are similar debates about what role the government plays in either holding social media companies accountable for the abuse or misinformation by its users, or, conversely, requiring them to refrain from moderating “unpopular opinions.” What constitutes a public interest and when the government has a right to regulate is a matter of some debate.
When discussing the topic of sustainability as a function of responsible and sustainable business conduct, we consider not only environmental health but also public health. Polluting the environment is bad for public health, but so too are a wide variety of inherently dangerous products from alcohol and tobacco to guns and drugs. We would expect the government to prohibit the pollution of the environment, and to ban the dumping of chemicals into our wetlands, for example, but we are challenged to accept a similar approach to other forms of pollution, like substances that cause cancer and contribute to pain and suffering. The balance between individual freedom and the public good is front and center in the arena of public debate.
The World Health Organization estimates that alcohol is the cause of close to 7% of all deaths each year globally, or about 3.5 million people, and total global sales of alcohol are well over $1 trillion per year. The question is whether society should allow businesses to market, sell, and profit from a product that causes so many deaths and creates a significant public health problem. The same question can be asked about tobacco, on which businesses make over half a trillion dollars annually and which the United States has struggled to regulate for years. Some businesses are acting on their own to rein in the sale or use of harmful products. In 2014, CVS, a drugstore and health care giant, chose to stop selling tobacco products, because such sales do not support its corporate mission. But tobacco companies are still doing booming business, especially with the popularity of e-cigarettes, or “vaping.”
Few issues are the source of as much public debate as guns, but it is clear that gun violence in the United States is itself a major public health problem. There are about 35,000 deaths per year in the United States due to firearms, and another 75,000 nonfatal firearm injuries. However, thousands of businesses profit from gun sales. Annual revenue in the gun and ammunition manufacturing industry is close to $14 billion, producing a profit of $1.5 billion, whereas the annual revenue of gun and ammunition stores is an additional $3 billion. Should the sale of guns remain relatively unregulated, or, in the interest of public health, should the government increase regulatory efforts in this area? On the corporate front, after a fatal mass shooting at a high school in Parkland, Florida, several companies took action. Dick’s Sporting Goods announced it will no longer sell semiautomatic assault rifles, such as the AR-15, as has Kroger, which owns Fred Meyer stores. Walmart has announced it will no longer sell guns to anyone under twenty-one years of age.
Another pressing issue of public interest is the abuse of prescription drugs, particularly opioid abuse. In 2021, over 100,000 people died from opioid abuse. Three in four deaths by drug overdose are caused by opioids (such as heroin) and synthetic opioids (such as Fentanyl). In the 21st century, synthetic opioids have become the most abused drug, and many cases of abuse and overdose involve legally prescribed opioids. Profits from the sale of these drugs are in the tens of billions of dollars, and the pharmaceutical industry spends $100 million lobbying Congress not to regulate it more stringently. The Food and Drug Administration already regulates drugs, but to simply make the drugs illegal would mean denying successful pain management treatments for patients who need them. Some local government entities are suing opioid drug manufacturers. In the private sector, CVS announced it would now fill opioid prescriptions with supplies for only seven days.
In 2020, the role of government in public health was brought to the forefront of public concern as COVID-19 swept the country and the world. Businesses looked to balance the need to keep their staff and customers safe with the desire to stay in business. Many balked at the shutdowns and mandatory mask laws that state and local governments passed. Public health concerns like this have some of the highest stakes, with lives literally on the line, and some of the tightest restrictions. While actions as severe as they were during COVID-19 are not as common, there are ongoing debates about things like mandatory vaccinations that curb disease at the expense of personal freedom.
Although sustainability discussions justifiably focus on the protection of human life and public health issues, a related ethical issue close to the hearts of many citizens is animal welfare, specifically preventing unnecessary harm or cruelty to pets, livestock, and animals used in research.
Businesses have begun to take notice of public demands in this area, as evidenced by a 2017 Fortune article about the Yoox Net-a-Porter Group. Net-a-Porter is a large, online retailer (with $2 billion/year in sales) that markets top-line brands such as Prada, Gucci, and Michael Kors. After a survey of its customers showed that a significant majority wanted the company to forgo fur products, it decided to forbid the use of fur in its entire line. Other big-name brands such as Armani, Hugo Boss, North Face, Nautica, and Timberland have followed Net-a-Porter’s lead and announced fur-free policies.
Related developments are taking place in the cosmetics and food industries. Many cosmetics companies have announced cruelty-free product testing policies for products ranging from makeup to hairspray. In the food industry, the U.S. Department of Agriculture reported that cage-free eggs account for approximately one-quarter of the wholesale shell egg market. Why? Sales and profits are the answer, along with sustainability. According to research conducted by Walmart, over 75% of the retail giant’s customers said they would be more likely to shop at a store that improves its policies related to animal welfare. Thus, not only Walmart but also supermarket chains such as Kroger have announced the gradual implementation of cage-free egg buying policies, as have fast food giants such as McDonald’s and Burger King. Such changes are often prompted, if not driven, by the influence of informed consumer stakeholders who are demanding these types of requirements on products they want to buy.
“Pass the bipartisan legislation to strengthen antitrust enforcement and prevent big online platforms from giving their own products an unfair advantage,” President Biden told lawmakers in the 2023 State of the Union Address. President Biden, in reference to the American Innovation and Choice Online Act (AICOA), also said “Capitalism without competition is not capitalism. It’s extortion. It’s exploitation” (Biden, 2023). He was speaking to the extraordinary power social media companies like Facebook and Twitter enjoy, both accessing and selling personal information and controlling the public debate. Social media in particular, and big tech in general, present several ethical challenges with a few companies like Mata and Amazon becoming too powerful.
Perhaps ironically, one other reason the government regulates business is to protect free enterprise. There is a precedent for taking actions like the ones Biden described. The Sherman Antitrust Act, which was originally passed in 1890, had the goal of being a comprehensive charter of economic regulations. It was aimed at preserving free and unfettered competition in trade by limiting the powers of a single company taking over an industry, which is called a monopoly.
The main goal of the Sherman Antitrust Act is the same today as it was in 1890: to maintain competition for the benefit of consumers. The Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade. This includes agreements among competitors to fix prices, rig bids, and allocate customers, which are punishable as criminal felonies. For example, price fixing includes any agreement by competing vendors that establishes a “fixed price” at the wholesale or retail level. A fixed price can be the same price for the same product across several competitors, or it can be a formula on how to determine a price. The consistency in price fixing is produced by collaboration and collusion between competitors to keep prices high, so it is anti-competition. It can artificially raise prices, and since there are no market alternatives outside of the fixed price across competitors, the consumer has no recourse except to not buy the product. In the case of staples, like eggs, flour, or sugar, for example, there are no reasonable alternatives.
Historically, the Sherman Antitrust Act has been invoked in lawsuits against some of America’s biggest companies, like Standard Oil in 1911, AT&T in 1982, and Microsoft in 1999 (the latter was settled out of court). The American Choice and Innovation Online Act promoted by Biden would expand on the Sherman Antitrust Act by making it illegal for companies to give preferential treatment to their own products over those of competitor products hosted on the same platform. For example, currently Apple allows in-app subscriptions to Apple Music but charges Spotify for the same feature, a clear case of preferential treatment and unfair advantage. While the bill faces opponents (and vigorous corporate lobbying), it would counter the antitrust practices prevalent in the big tech and social media industries.
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