Taking a Break from the FTC Drama

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The latest Federal Trade Commission (FTC or Commission) public meeting was notable for what did not happen – there were no 3-2 votes taken over the strong objections of the Republican commissioners. With former Commissioner Rohit Chopra’s departure to head the CFPB, for at least the next few weeks – or, more likely, months – we are in 2-2 territory at the agency. Until, of course, the Senate acts on the nomination of Alvaro Bedoya, the founding director of the Center on Privacy & Technology at Georgetown Law. (Note: His hearing was held earlier this week.) So let’s dive into a relatively tame Commission meeting.

For a dramatic change of pace, the Commission’s latest public meeting featured the consumer comment section upfront, and we heard from 15 different consumers raising issues ranging from supply chain challenges to a request for a study on franchise issues to surveillance marketing concerns. Chair Lina Khan kicked off this discussion by indicating that the FTC is making sure that the comments are heard and being integrated into the work that the agency is doing on the consumer protection and competition sides. That makes sense to me – but I continue to wonder how the agency will accomplish this, given the breadth and diversity and importance of issues being raised though this public comment section of the Commission meetings. (As an aside, the FTC’s press office director does such a good job at enforcing the two-minute speaking time limit that I may start a petition to have her assume responsibility for the Academy Award time limits.)

So for the (mostly) consumer protection part of the show, it was an interesting topic but not a particularly controversial one. FTC staff discussed criminal referrals that both bureaus make to federal and state criminal authorities. (The FTC only has civil law enforcement authority, but many practices that violate FTC laws may also violate criminal laws.) This is an important focus of the Commission’s mission and one that doesn’t always get the attention it deserves. And the numbers are impressive or terrifying, depending on your perspective. In the past five years, FTC staff provided information to criminal law enforcers that prosecutors used to charge 228 new defendants, with 173 defendants receiving prison sentences. Although the criminal focus tends to be on the more egregious fraud artists that FTC watchers see often, FTC staff also discussed criminal cooperation the FTC has done with respect to some large, well-known companies, and indeed, the press release announcing the new policy statement noted an “FTC policy statement aimed at holding corporations and their executives accountable for crimes the agency uncovers.”

Bottom line: Criminal referrals will remain an important FTC priority, and the public statement on the topic isn’t any real change from what the agency has been doing for many years now.

Next on the agenda was a discussion about a potential 6(b) study on supply chain disruption issues. Because this blog focuses on advertising issues, I will spare you the details of the competition-focused supply chain discussion – but suffice it to say, the Commission seems to be in unanimous agreement about the importance of the issue and the value of an FTC study on the topic. The vote itself was pushed off for a week in order to get more input from agency experts. And if you are wondering what a 6(b) study is and why the odd name, well, 6(b) is simply the provision of the FTC’s statute that gives it the authority to get information from outside entities and compile that information into anonymized reports for the public. And these studies will almost always involve nine or fewer subjects, given the challenges of the Paperwork Reduction Act.

Meeting adjourned.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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