The FTC recently issued a report to Congress on its collaboration with state attorneys general.  Titled “Working Together to Protect Consumers: A Study and Recommendations on FTC Collaboration with the State Attorneys General,” the report was issued pursuant to the FTC Collaboration Act of 2021.  The Collaboration Act required the FTC to conduct a study “on facilitating and refining existing efforts with State Attorneys General to prevent, publicize, and penalize frauds and scams being perpetrated on individuals in the United States” and directed the FTC to report the results of the study to Congress together with recommendations for enhancing collaboration between the FTC and state AGs.

Part I of the report discusses the FTC’s existing efforts to collaborate with state AGs and highlights examples of recent enforcement actions involving FTC and state AG collaboration.   Appendix A to the report contains a chart that provides information on enforcement actions the FTC filed or resolved jointly or in parallel with state AGs and consumer protection agencies with statewide enforcement authority between January 1, 2020 and March 26, 2024.  The information provided in the chart includes who the FTC’s state partners were in the enforcement action and the subject matter of the enforcement action.  Part I of the report also discusses (1) how the FTC shares information in its Consumer Sentinel Network, the FTC database of consumer complaints involving alleged fraud, deception, and other unlawful business practices, (2) various other ways in which the FTC and state AGs share information and expertise in the context of enforcement investigations and trainings, and (3) the role of various specialized units within the FTC in advancing and facilitating the FTC’s work with state AGs. 

Part II of the report discusses recommended best practices to improve collaboration between the FTC and state AGs.  The FTC observes that the importance of collaboration in enforcement actions with state AGs and other state and local law enforcers has grown since the U.S. Supreme Court’s 2021 decision in AMG Capital Management LLC v. FTC.  In that case, the Supreme Court ruled that Section 13(b) of the FTC Act does not authorize the FTC to seek, and a court to award, monetary relief such as restitution or disgorgement.  The FTC’s recommended best practices include:

• Expanding state participation in the Consumer Sentinel Network and ensuring that states have the training to use it effectively.
• Expanding the sharing of expertise and technical resources between the FTC and state AGs.

Part III of the report discusses legislative recommendations to enhance collaboration efforts.  These consist of :

• Amending the FTC Act to make clear that the FTC has authority under Section 13(b) of the FTC Act to obtain equitable monetary relief.  
• Amending the FTC Act to give the FTC independent authority to file lawsuits seeking civil penalties.  Under existing law, before the FTC can file a case in federal court seeking civil penalties, it must provide the Attorney General of the United States with written notification, and consult with DOJ staff about whether the case should be prosecuted by the FTC or DOJ.  DOJ has 45 days to consider whether to prosecute the case in the name of the United States and if DOJ declines to prosecute or fails to act within 45 days of the FTC’s referral, the FTC can file the case.
• Amending the FTC Act to give the FTC clear authority to challenge practices that assist or facilitate unfair or deceptive acts or practices that violate the FTC Act.  The Supreme Court’s 2008 decision in Central Bank of Denver construing the Securities Exchange Act of 1934 cast doubt on the FTC’s authority to bring actions for aiding and abetting violations by others.

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