Antitrust Law Daily FTC Commissioners testify about agency activities during the pandemic
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Wednesday, August 5, 2020

FTC Commissioners testify about agency activities during the pandemic

By Stephanie K. Mann, J.D.

In testimony before the Senate Committee on Commerce, Science, and Transportation, the commissioners detailed FTC actions to protect consumers, as well as urging Congress to clarify the agency’s ability to collect consumer redress and reauthorize the SAFE WEB Act.

At an oversight hearing before the Senate Committee on Commerce, Science, and Transportation, the FTC Commissioners testified about Commission resources and the steps the FTC has taken to continue operating effectively during the pandemic. FTC Chairman Joseph Simons and Commissioners Noah Joshua Phillips, Rohit Chopra, Rebecca Kelly Slaughter, and Christine S. Wilson maintain that the FTC continues to provide essential services and has developed virtual processes for a range of agency activities that had previously been conducted in person.

Consumer redress. Over the past four fiscal years, pursuant to Section 13(b) of the FTC Act, the FTC has returned more than $975 million directly to consumers and won judgments under which consumers received nearly $10 billion more through defendant-administered redress programs. However, the commissioners testified that the Commission’s ability to keep getting such results for consumers has been threatened or curtailed by recent judicial decisions. Therefore, they urged Congress to clarify the agency’s "statutory authority to obtain complete equitable monetary relief under Section 13(b) of the FTC Act, our principal means of securing judicial orders that require this relief." Two decisions from the Seventh and Ninth Circuit Court of Appeals, both of which are expected to be heard by the Supreme Court, have put this in jeopardy. "In short, our ability to get full redress for consumers is in peril. We request that Congress act now to preserve the FTC’s ability to restore to consumers money they lose to scammers and fraudsters," according to the prepared testimony.

SAFE WEB reauthorization. The prepared testimony urged Congress to reauthorize the U.S. SAFE WEB Act, which allows the FTC to work with foreign authorities on cross-border law enforcement and is "an indispensable part of the FTC’s enforcement arsenal." The Act is currently set to sunset on September 30, 2020, without reauthorization from the Senate.

Consumer protection. As part of its mandate to protect consumers from unfair and deceptive practices in the marketplace, the FTC has worked to protect consumers and promote competition, including efforts to combat frauds designed to take advantage of consumers during the COVID-19 pandemic. These activities include law enforcement actions, warning letters, consumer and business education, and national and local outreach. Simultaneously, the FTC is continuing its day-to-day work of protecting privacy and data security, addressing fraud across most sectors of the economy, preventing unfair, deceptive, or discriminatory financing transactions, helping ensure that advertising claims to consumers are truthful and not misleading, and combating illegal robocalls, said the testimony.

Since the pandemic began in March, the FTC has issued joint warning letters with the Food and Drug Administration to more than 70 marketers regarding claims that their products will treat, cure, or prevent COVID-19, and there are additional warning letters in the pipeline, the testimony stated. The FTC also has issued its own warning letters to more than 200 additional marketers of COVID-19 products.

In addition, the FTC has taken action to address unscrupulous businesses posing as the Small Business Administration. In conjunction with the SBA, the FTC issued eight warning letters to such companies and also took action to stop a company the FTC charged with deceptively claiming to be an approved lender for the federal coronavirus relief lending program for small businesses. The FTC also has issued warning letters to VoIP service providers and others assisting and facilitating robocalls using coronavirus-related messages, as well as multi-level marketing companies making allegedly unsubstantiated health and earnings claims.

According to the commissioners, companies that have received FTC warning letters have taken quick steps to correct their problematic claims. However, when a company fails to take action in response to a warning letter, or a warning letter is not appropriate given the conduct at issue, the FTC has pursued law enforcement.

Antitrust. Finally, the testimony provided a short summary of the FTC’s work, along with the Department of Justice Antitrust Division, to enforce U.S. antitrust laws in many sectors of the economy that directly affect consumers. This year, the agency is on pace to break its record for the most merger enforcement actions in a year since 2001.

MainStory: TopStory Antitrust ConsumerProtection Covid19 GCNNews FederalTradeCommissionNews

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