Frequently Asked Questions - Type of Information that is exempt
What information is exempt under the FOIA?
While the focus of the FOIA is on making government information available to the public, the statute recognizes that disclosure of certain kinds of information would be harmful. For this reason, the FOIA exempts nine categories of information from the general mandatory disclosure rule, and excludes certain records from coverage under the FOIA. FTC records that most frequently fall into one of these categories include material we have obtained from businesses, certain internal communications that are protected by a privilege, personal information, law enforcement records, and internal personnel rules and practices.
Trade Secrets and Other Confidential Business Information
In the course of its law enforcement activities, the FTC obtains a great deal of sensitive or confidential information from businesses. Disclosure of this information often could cause competitive harm to the businesses that provided it. Moreover, businesses are more willing to cooperate with FTC investigations if they know that the government will protect their sensitive information. Accordingly, the law recognizes the importance of protecting much of this information from disclosure.
FOIA Exemptions 3 and 4, together with other statutory provisions, provide for the withholding of trade secrets and other confidential commercial or financial information. Exemption 3 provides that if a law other than the FOIA places any restrictions on the release of information, that information need not be disclosed under the FOIA. The following statutory provisions restrict the release of certain information provided to the FTC by businesses under investigation:
- Section 6(f) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 46(f), requires the agency to protect the confidentiality of trade secrets and other commercial or financial information obtained from a business. FOIA Exemption 4 also explicitly exempts this type of information from disclosure.
- The Hart-Scott-Rodino ("HSR") amendments to the Clayton Act, 15 U.S.C. § 18a(h), requires submission of information to the FTC about certain mergers and acquisitions, but generally forbids the FTC from disclosing any of this information. The purpose of this law is to avoid premature disclosure of information about those mergers and acquisitions that could improperly affect the sale of a company or its assets or the price of its stock.
- Sections 21(b) and 21(f) of the FTC Act, 15 U.S.C. § 57b-2, protect certain information obtained in FTC investigations. The FTC has the authority to require businesses or individuals to submit information needed for investigations. This authority is known as compulsory process. Sections 21(b) and 21(f) prohibit release of information obtained through compulsory process, or submitted to the FTC voluntarily by a party when compulsory process might otherwise have been used.
Thus, the FOIA exemptions, the FTC Act, and the HSR provisions work together so that most information submitted to the FTC during our law enforcement investigations is exempt from disclosure and therefore will not be produced in response to a FOIA request.
Example: In response to an FTC investigation of the nutrition claims of a health food snack, a distributor supplies the FTC with information about the snack’s ingredients, advertising budget, and sales profits. Both the FOIA and the FTC Act require the FTC to withhold all such information because it is confidential business information and, with respect to the commercial food recipe, a trade secret. Disclosing such information to the public would harm the distributor’s competitive position and make it and others in the industry less likely to cooperate with the government for fear of losing competitive advantage.
Internal Government Documents
FOIA Exemption 5 allows the FTC to withhold certain types of internal government communications, including memoranda or letters transmitted within the FTC or between the FTC and other government agencies. The exemption covers those types of records that would normally not be available to a private party involved in a court proceeding with the FTC. The most typical basis for invoking this exemption is the applicability of one or more of the following legal privileges:
- Deliberative process: This privilege allows the FTC to withhold information that is predecisional (i.e., prepared in advance of an agency decision in a particular matter) and deliberative (i.e., prepared to aid in the decision-making process). The FOIA allows the withholding of records of this type to facilitate open and candid discussion of issues among government employees as part of agency decision-making.
- Work-product: The work-product privilege is designed to protect material prepared in connection with actual or anticipated litigation.
- Attorney-client communications: The attorney-client privilege protects confidential communications between an attorney and a client over a legal matter for which the client has sought legal advice. This privilege is not used as frequently as the other two, but is most often available when the Commission’s General Counsel has been asked to interpret a situation and give an opinion or interpretation.
Example: In a law enforcement investigation that is likely to go to trial, the FTC's Office of the General Counsel staff may prepare memoranda analyzing whether the FTC has jurisdiction and outlining the arguments the FTC’s attorneys could use to defend its jurisdiction in court. The FTC may use all three of these privileges to withhold those memoranda.
Personal Information
Exemption 6 allows agencies to withhold personnel or medical records to prevent an unwarranted invasion of personal privacy. In addition, Exemption 7(C) allows agencies to withhold personal information that is part of an investigative file. Before invoking either of these exemptions, the FTC must determine that the individual’s right to privacy is greater than the public’s right to know the information in question.
Example: The FTC often uses these exemptions to withhold the identities of individuals who have complained to the Commission about the practices of credit reporting or debt collection agencies. The individual's right to privacy ordinarily outweighs the public's interest in knowing whether a person has been denied credit or may not have paid an outstanding bill.
Law Enforcement
FOIA Exemption 7 allows the FTC to withhold law enforcement records where release either would or could harm those law enforcement efforts in one or more ways listed in the statute. Because the FTC is a law enforcement agency, this exemption often applies to FTC records. Exemption 7(A) allows the FTC to withhold information in law enforcement investigations if disclosure would interfere with enforcement efforts (e.g., by alerting a target prematurely of the existence of an investigation, or by revealing investigative strategies). As noted above, Exemption 7(C) allows the FTC to withhold personal information from an investigative file. Exemption 7(D) allows the FTC to withhold records that could reveal the identity of a confidential source.
Example: Exemption 7 would probably apply in a number of ways to an FTC investigation of a franchisor based on allegations from several franchise owners about allegedly misstated potential earnings. We may use Exemption 7(A) to withhold all information that may reveal to the franchisor that it is an investigation target. We may also use Exemption 7(C) to withhold access to information about the franchisees’ personal finances, because the public has little interest in, or right to know about, information that is not related to government operations or business. Finally, we might invoke Exemption 7(D) to protect the complaining franchisees’ identities if it appears that the franchisor could retaliate against the franchisees.
Information About Internal Personnel Rules and Practices
FOIA Exemption 2 allows the FTC to withhold material that relates solely to its internal personnel rules and practices. The FTC may invoke Exemption 2 to withhold (1) documents about inconsequential administrative matters which are of no genuine public interest, such as a rule governing lunch hours; and (2) information, such as a law enforcement training manual, that, if disclosed, would risk circumvention of law or agency regulations. It is unlikely that the FTC would withhold information that falls into the first of those two categories, but it is necessary on occasion to invoke this exemption to prevent release of information would likely cause significant harm to the Commission’s law enforcement activities.
