House Energy and Commerce Committee Looks to #DisruptFTC

On Thursday, May 28, the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade introduced six bills limiting the authority of the Federal Trade Commission (FTC) as part of the launch of the subcommittee's initiative - The Disrupter Series (#DisruptFTC). The series represents arguably the most congressional scrutiny the FTC has received since the 1980s. Subcommittee Chairman Michael Burgess (R-TX) described the aim of the series as an evaluation of the FTC to inform the subcommittee's policy decisions on job creation and to remove challenges to innovation within the current and future marketplace.

Six of the 12 Republican subcommittee members, including Chairman Burgess and Subcommittee Vice Chairman Leonard Lance (R-NJ), introduced the bills that address consent orders, silencing of online consumer complaints, investigative actions, and enforcement actions.

• Technological Innovation through Modernizing Enforcement (TIME) Act (H.R. 5093). The bill would change the current agency practice of requiring 10 to 20 year consents and limit it to 8 years for most consent orders to small businesses. Chairman Burgess sponsored the bill.
• Consumer Review Fairness Act (H.R. 5111). The measure would prohibit companies from trying to silence customer opinions online. This bill is an outlier because it supports action the FTC has taken in this area. For example, in September 2015, the FTC filed a complaint against a weight-loss supplements manufacturer claiming the company attempted to prevent consumers from sharing their negative experiences online. Subcommittee Vice Chairman Leonard Lance sponsored the bill.
• Clarifying Legality and Enforcement Action Reasoning (CLEAR) Act (H.R. 5109). The legislation would require the FTC to submit annually to Congress a report on its consumer protection investigations. Rep. Brett Guthrie (R-KY) sponsored the bill.
• Start Taking Action on Lingering Liabilities (STALL) Act (H.R. 5097). The legislation would terminate an FTC investigation that has been inactive for six months, except when the FTC votes to extend the investigation before the six-month expiration period or the FTC sends a written communication about the investigation to the person who is the subject of the investigation. Rep. Susan Brooks (R-IN) sponsored the bill.
• Solidifying Habitual and Institutional Explanations of Liability and Defenses (SHIELD) Act (H.R. 5118). The bill would clarify that the FTC's policy guidelines and guidance should not create an independent basis for liability. It also would allow compliance with policy guidelines and guidance to be used as evidence of compliance with the law. Rep. Mike Pompeo (R-KS) sponsored the bill.
• Statement on Unfairness Reinforcement and Emphasis (SURE) Act (H.R. 5115). The bill codifies the basic unfairness standard in Section 5(n) of the FTC Action and additional parts of the FTC's unfairness analysis as set forth in its Policy Statement on Unfairness. Rep. Markwayne Mullin (R-OK), the bill's sponsor, believes that the measure would prevent the FTC from "going rouge" and ignoring its own unfairness guidance.

Although some proponents view the FTC reform bills as common sense business measures, the likelihood of enacting the reform bills is slim, with it being an election year and Democrats opposing some of the measures. In the House, there may be further discussion within the Energy and Commerce Committee on these bills and possible floor consideration, although it is unclear at this time. In the Senate, some of the bills may be incorporated into the Standard Merger and Acquisition Reviews Through Equal Rules Act (SMARTER) Act (S. 2102/H.R. 2745), which aims to have the FTC and Department of Justice use the same standards and procedures when they review mergers.

© Arnold & Porter Kaye Scholer LLP 2016 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.