Consumer Confidential: New limit on food ads, ‘cramming’ is costly, Spotify arrives
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Here’s your throw-me-a-bone Thursday roundup of consumer news from around the Web:
--The country’s biggest food companies are trying to head off stricter regulation of their activities by voluntarily cutting back on marketing unhealthy foods to children. A coalition of companies -- including General Mills, ConAgra Foods and Kellogg -- say their effort will vastly change what is promoted, curbing advertising on one out of three products currently marketed to children. The new standards, which will allow companies to advertise food and beverage products to children if they meet certain nutritional criteria, could force some brands to change recipes to include less sodium, fat, sugars and calories. While many companies have trumpeted their own efforts to market healthier foods to kids, the agreement would apply the same standards to all of the participating companies. However, proposed federal rules would be even tougher, which shouldn’t surprise anyone.
--Those unexpected charges that can appear on phone bills are costing us a bundle. A Senate Commerce Committee report says the practice, known as ‘cramming,’ could be costing Americans $2 billion a year. Moreover, it says the nation’s largest telephone companies are profiting from it, and that third-party landline telephone billing has largely failed as a legitimate method of payment. Among other things, the report finds that third-party billing is a billion-dollar industry. On a yearly basis, telephone companies place approximately 300 million third-party charges on their customers’ bills, which amount to more than $2 billion worth of third-party charges on telephone bills every year. Over the last five years, telephone companies have placed more than $10 billion worth of third-party charges on their customers’ landline telephone bills.
--Europe’s hottest music service is now up and running here as well -- at least for a select group of initial users. Spotify has launched its much-hyped U.S. version of its service after delays and years of negotiation. At first, Spotify will only accept new members to its free service who receive invitations from the company, one of its sponsors or a current user. It plans to welcome everyone for free within a few weeks. The Spotify computer program lets people choose from any of 15 million songs to hear for free -- up to 20 hours per month, with each track listenable up to five times. For the first six months, however, people who enter during the invitation period are exempt from the monthly limit. After that, users can lift the restrictions by paying $5 a month or buying songs individually, like iTunes. The smartphone app can be accessed for $10 a month, which includes unlimited streaming and the ability to save copy-protected music for listening offline.
-- David Lazarus