For decades, the FTC has explained that the omission of information can lead to liability. It is also a canon of statutory construction that an amendment helps reveal legislative intent. And of course, your mother put it simply: words that you say (and take back) have meaning.
Earlier this month, the Commission released its draft
Last week. FTC Commissioner Christine Wilson delivered a speech with a title that made clear she intended to speak her mind: The Neo-Brandeisian Revolution: Unforced Errors and the Dimunition of the FTC.
Predicting that the new FTC Leadership will fall far short of achieving its objectives — most of which she opposes — Commissioner Wilson
In its third recent Penalty Offense Authority notice, the FTC today notified more than 1,100 companies offering “money-making opportunities” that it intends to pursue civil penalties of up to $43,792 per violation for misrepresentations related to potential earnings and related characteristics about the opportunity. Recipients of the notice include virtually every major direct selling company and others in the gig economy such as Amazon, DoorDash, Lyft, and Uber.
That makes more than 1,800 companies that have been put on notice of penalty offenses in the past month. It also crosses another alleged deceptive practice off the list laid out in the October 2020 paper authored by current Bureau Director Sam Levine and former FTC Commissioner Rohit Chopra, entitled The Case for Resurrecting the FTC Act’s Penalty Offense Authority. Next up? Well, if the Chopra/Levine paper points the way (and it appears to), we should expect future notices that focus on allegedly unfair and deceptive data harvesting and targeted marketing.
In addition to the eight categories of misrepresentations in today’s notice ranging from the amount of earnings possible to the amount of training provided, the sample cover letter published online also includes a section on endorsements and testimonials. This means that each company receiving today’s notice also will receive the notice published last week on endorsements and testimonials, which over 700 companies also received (with some minimal overlap in that list).
Continue Reading Next Up – Earnings Claims: Notice of Penalty Offenses Sent to 1,100 Direct Selling Companies and Others in the Gig Economy
Over the last ten days, 700 companies and 70 for-profit colleges received notice of the FTC’s intent to pursue civil penalties under Section 5(m)(1)(b), if these companies and colleges engage in certain conduct deemed by the FTC to be unfair or deceptive. The notices sought to achieve two important Agency objectives: first, force addressees to consider their marketing messages and compliance programs; and second, reintroduce (or reinforce) the threat of significant monetary penalties for those who need discipline. The warnings will undoubtedly alter the dynamic of new investigations as parties consider the costs and benefits of negotiating consent orders that include payment of consumer redress.
But what if parties resist and the Commission were forced to litigate? There, a third objective – to convince a court that the FTC’s Penalty Offense Authority entitles it to civil penalties based on these notices – is much less likely to be realized.
Continue Reading Flexing the Agency’s Muscles: What FTC Notice of Penalty Offenses Really Means for Advertisers
As we have noted in earlier posts, in the wake of the Supreme Court’s holding that Section 13(b) of the FTC Act does not allow for monetary restitution, the Federal Trade Commission has been attempting to creatively utilize other provisions of the Act in order to obtain money from the companies and individuals it
Making good on promises to creatively explore all of its options for enforcement, the FTC yesterday notified 70 for-profit higher educational institutions that it intends to use its long dormant Penalty Offense Authority to obtain civil penalties when institutions make misrepresentations about their programs and job and earnings prospects. The move closely follows recommendations proposed
Last week, we wrote about FTC Chair Khan’s memo describing her plans to transform the FTC’s approach to its work. This week, she followed up with a no-less-ambitious statement laying out her vision for data privacy and security, which she appended to an agency Report to Congress on Privacy and Security (“report”). Together, these documents outline a remarkably far-reaching plan to tackle today’s data privacy and security challenges. As noted in the dissents, however, some of the stated goals may exceed the bounds of the FTC’s current legal authority.
Continue Reading FTC Chair Khan’s Vision for Privacy – and Some Dissents
The Senate yesterday confirmed current FTC Commissioner Rohit Chopra as the new Director of the Consumer Financial Protection Bureau (CFPB). The 50-48 vote to confirm was along party lines and followed Vice President Harris’s breaking of a 50-50 tie to invoke cloture and end debate on Chopra’s nomination.
With Chopra’s departure from the FTC
Commissioners Cut Procedures, Rescind Policy, Empower Staff, Target Tech
With an unprecedented attack on policies the Federal Trade Commission had long embraced, the new majority of Democratic Commissioners revealed a bold enforcement agenda that would circumvent Supreme Court decisions and avoid Congressional limits.
It was a meeting like none the Federal Trade Commission has ever held. On one week’s notice, the Commission adopted new rules to impose civil penalties on substandard Made-in-USA claims, removed judges and safeguards from rulemaking proceedings, rescinded its 2015 enforcement policy statement on unfair methods of competition, and granted staff more authority to issue subpoenas and civil investigative demands. The vote on every issue followed party lines. Republican Commissioners, Noah Phillips and Christine Wilson, voted against all, and the Democratic Commissioners, Chopra, Khan, and Slaughter, rejected all amendments. Chair Khan announced that public meetings will become regular events at the FTC.
Continue Reading Chopra, Khan, Slaughter Take Control of the Federal Trade Commission
At a hearing of the Antitrust Subcommittee of the Senate Judiciary Committee today, Chair Amy Klobuchar (D-MN) emphasized the need for broad antitrust reform. While she rallied bipartisan support to supplement antitrust budgets and encountered little opposition for helping news outlets bargain with social media, prospects for her sweeping S. 225, the Competition and Antitrust
