FTC chief changes role of 'nation's nanny'

James C. Miller III does not look like a nanny. He is too large, first of all , with the height and heft of a linebacker. His booming Southern voice does not fit the part.

He really doesn't act like a nanny, either - even though he is chairman of the Federal Trade Commission, an agency whose past crusades for consumer protection earned it the label ''nation's nanny'' from irked members of Congress.

FTC commissioners have a large impact on the way we live. They can ban ads they feel are deceptive, fine companies they feel are preying on consumers, break up mergers they don't approve. It's the FTC, for instance, that will decide whether General Motors and Toyota can join together to produce a small car in the United States.

But under Mr. Miller the FTC has approached this work with less fervor than it used to. In his office hangs a large reminder of his conservative approach to regulation: a battered highway sign that says ''Keep Right.''

''The FTC was viewed by Congress as a bully. I think I've turned that around, '' Miller says in an interview with a small group of reporters. ''We've made a substantial change in our portfolio of activities, getting away from 'national nannyism.' ''

Even before the 1980 election swept President Reagan, with his deregulatory bent, into office, the FTC had drawn the ire of Congress. Many members felt the agency was too independent and too ferocious. They didn't approve of the zeal with which the FTC was investigating fairness in children's advertising, for instance.

In 1980, Congress voted itself veto power over FTC actions. It exercised this power only once, in 1982, when legislators vetoed an FTC rule that would have required used-car dealers to disclose known defects in their wares.

Congress lost this disciplinary tool earlier this year, when the US Supreme Court struck down the legislative veto. But with Miller at the helm, the FTC hasn't done much that congressional members worry about. If anything, it's what he doesn't do that many on Capitol Hill don't like.

''It's a regime of nonenforcement up there,'' grumbles one congressional staffer.

Even his critics say Miller is a pleasant man to deal with. Born and raised in Conyers, Ga., he has an easy Southern manner and something many economists (which he is) lack: a sense of humor. He showed up at one FTC party wearing a pilot's uniform, complete with cap that read ''Fly By Night Airlines.''

He has a consistent approach to the issues that come across his desk. If they increase ''economic efficiency,'' in his view, he votes ''yes.'' If not, he votes ''no,'' and with his Republican allies on the five-member commission he can usually carry the day.

A longtime critic of government regulation in general (before taking his current job he was the regulatory affairs chief at the Office of Management and Budget) Miller has pushed for explicit curbs on his agency's authority.

He wants Congress to define what deceptive business practices the FTC should investigate - something legislators haven't quite got around to yet, though the House is considering it. He has favored investigating only those ads which cause consumers ''substantial injury'', and last month, by a 3-to-2 vote, the FTC approved that change.

But the biggest move Miller has made at FTC, say his critics, is simply to rein in the agency, cutting its staff, reducing the investigations undertaken.

''He just hasn't brought cases,'' insists Jay Angoff, an attorney with the Ralph Nader group Public Citizen.

As an example, the FTC isn't adequately investigating clothing companies that may be illegally refusing to sell to discount chains, Mr. Angoff says.

Miller replies that these complaints are the ''wailing of ideologues.''

''We've put the commission back on the track to conventional antitrust, consumer-protection cases,'' he says, such as an investigation that earlier this year found more than 70 auto dealers who were falsely advertising low interest rates.

And Miller points to his spirited fight against doctors and lawyers, who have tried for two years to get a congressional exemption from FTC antitrust oversight. The doctors, though they almost won, have been wrestled to the mat; the lawyers are still trying.

But in years to come, Miller's term at the FTC may be most remembered for an action that hasn't yet been taken. The agency must rule whether the proposed joint venture between GM and Toyota violates US antitrust law, a tough decision that will greatly affect Detroit's small-car production strategy.

''It is an enormous undertaking for us,'' admits Miller.

Miller (who at one time received large consulting fees from GM) refuses even to hint which way he will vote, though he is widely expected to approve the combination. The decision is not subject to normal FTC deadlines, and work has lagged. The chairman says, however, that the ''likelihood of something before Christmas is reasonably good.''

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