Peloton recall saga shows limits of safety regulators' powers
May 7, 2021. Summarized by summa-bot.
Compression ratio: 16%. 1 min read.
A Peloton Interactive Inc. Tread exercise machine for sale at the company's showroom in Dedham, Massachusetts, U.S., on Wednesday, Feb. 3, 2021. Peloton Interactive Inc. is scheduled to release earnings figures on February 4. Photographer: Adam Glanzman/Bloomberg via Getty Images
You would think that federal safety regulators would have broad powers to order the recall of products they find dangerous or even deadly. You would be wrong.
Agencies such as the Consumer Product Safety Commission and the National Highway Traffic Safety Administration typically can only request — not demand — that companies order a recall when problems arise.
But there are a lot of times companies don't do a recall, and you have a fight that largely takes place outside the public eye," said William Wallace, manager of safety policy for Consumer Reports.
What's more, a company can sue if an agency makes public its request for a recall.
"If a company continues to refuse, it could take years and cost the agency a lot of money to go to court and force a recall.
"The CPSC faces a nearly insurmountable hurdle each and every time the agency wants to warn the public about a hazardous product," he said when announcing the Peloton recall.
Peloton CEO John Foley was forced to admit the company was wrong to fight the recall request.