FTC Commissioners Discuss Authority

Advertising Law

The commissioners of the Federal Trade Commission (FTC) recently appeared before Congress, testifying before the Senate Appropriations Subcommittee on Financial Services and General Government, and sitting down with the House Committee on Energy and Commerce’s Subcommittee on Consumer Protection and Commerce.

At the Senate hearing, FTC Chair Joseph Simons reviewed the agency’s fiscal year 2018 efforts, in which it returned more than $83 million in redress to consumers and $10 million to the U.S. Treasury, and oversaw more than $1.6 billion in consumer refunds self-administered by defendants.

He also promised that “Made in USA” claims would receive increased scrutiny and that an upcoming workshop was scheduled on the issue in which a discussion of penalties and remedies would be included.

All five commissioners later testified before House lawmakers. In her remarks, Commissioner Christine Wilson requested clarity from Congress about the extent of the FTC’s authority to obtain monetary relief under Section 13(b) of the FTC Act, an issue recently taken up by multiple courts.

The agency also sought explicit enforcement authority in the area of privacy and data security, and encouraged legislators to enact a federal privacy bill. While the FTC has so far relied primarily on its power under Section 5 of the FTC Act to bring more than 65 cases alleging that companies failed to implement reasonable data security safeguards and more than 60 general privacy cases, Section 5 “is not without its limits,” the FTC said in prepared remarks.

Section 5 does not allow the commission to seek civil penalties for the first offense and excludes nonprofits and common carriers.

“To better equip the Commission to meet its statutory mission to protect consumers, we urge Congress to enact privacy and data security legislation, enforceable by the FTC, which grants the agency civil penalty authority, targeted APA rulemaking authority, and jurisdiction over non-profits and common carriers,” according to the prepared testimony.

Answering questions from the House subcommittee, Simons was clear that the agency doesn’t want broad power, asking only that a new law does not “dump” responsibility on the FTC.

“Please … do not give us broad rule-making authority,” he told lawmakers. “Give us targeted rule-making authority. What we really want to have is have Congress come up with bipartisan privacy legislation … and give us targeted rule-making authority so we can keep it up to date, make technical changes for developments in technology or in business methods, but please do not give us broad-based authority.”

To read the prepared remarks for the Senate testimony, click here.

To view the Senate hearing, click here.

To read the prepared remarks for the House testimony, click here.

To view the House hearing, click here.

Why it matters: Change may be in store for the FTC, if its requests for an increase in specific enforcement authority in the areas of privacy and data security are actually incorporated into federal privacy legislation and passed.