Philip Morris loses as court strikes down Obama restriction on cigarette ads 

When Barack Obama signed the "Family Smoking Prevention and Tobacco Control Act," he declared, "despite decades of lobbying and advertising by the tobacco industry, we've passed a law to help protect the next generation of Americans...." Of course, at the same time, the single largest tobacco company, Philip Morris -- which controls a majority of the U.S. cigarette market, and, dollarwise, has made up a majority of the industry's lobbying -- was applauding the bill, as it had for about a decade.

It was another example of Obama posing as the scourge of Big Business and special interests while actually teaming up with the special interests and Big Business.

One of the reasons Philip Morris liked the bill was its restrictions on advertising. Author Kip Viscusi explained:

If the primary effect of advertising is to influence brand choice rather than consumption of a broad class of products, as a considerable economic literature suggests, then banning advertising or restricting it in important domains has the effect of locking in the current market shares to the extent that firms cannot advertise new brands.

When you control 51% of the market, that's a good deal. This is one reason critics called it the Marlboro Monopoly Act.

But a federal district court judge yesterday, while upholding most of the law, ruled that the advertising restrictions were unconstitutional. RJ Reynolds was a plaintiff.

[via Jacob Sullum at Reason's "Hit and Run" blog.]

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Timothy P. Carney

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