Statement of Commissioner Orson Swindle
In the Matter of
File No. X980085
In this case, the Commission filed a complaint alleging that the defendant, Robert Oliver, violated Section 5 of the FTC Act by deceptively implying an affiliation with the U.S. government, as well as state or local governments. Although not a government official or employee, Oliver operated a web site offering privately-owned consumer protection agency franchises under the name "US Consumer Protection Agency." I agree with my colleagues that strong relief is needed in this case, in which the alleged deception sought to exploit the public's confidence in government in general and consumer protection agencies in particular. I also agree that most of the relief contained in the order is necessary and appropriate. I wish to stress, however, that such relief should focus on remedying and preventing the type of violations alleged in the complaint. I see no need for a broad-brush restriction on any tangentially related -- or, even worse, unrelated -- business activity by a defendant.
I have no objection to Paragraph I of the settlement agreement, which permanently enjoins Oliver from "misrepresenting, directly or by implication, that he is in any way affiliated with or acting on behalf of any governmental entity." Indeed, I strongly support it since it prohibits Oliver from deceiving consumers with his fašade of government affiliation and would reach any variations on Oliver's previous misrepresentation.
The settlement agreement, however, contains additional broad conduct restrictions that are not tied to remedying false representations of government affiliation. Specifically, Paragraph II.A enjoins Oliver, in connection with the advertising or sale of any product or service, from "using the initials 'U.S.,' the words 'United States,' or 'Federal,' or any word or term commonly referring to the U.S. government or any bureau, . . . or any state or local government" in, among other things, his "Internet web page, . . . promotional scripts or materials, or other advertising." Paragraph II.B enjoins him from using coats of arms, seals, pictures, logos, or other visual representations commonly identified with the government in connection with the advertising or sale of any product or service.
Paragraphs II.A and II.B are extremely broad and could reach activities such as advertising truthfully that a garment was "made in the USA" or that a cut of meat was "USDA prime;" they could even be read to prevent Oliver from selling a T-shirt with the American flag on it. These provisions do not merely provide concrete examples of prohibited misrepresentation of government affiliation, which would be the type of clear and strong relief I support.(1) They are, instead, completely independent of the restriction on misrepresentation of government affiliation and extend beyond it to cover many types of unobjectionable business activities that are totally unrelated to Oliver's alleged misdeeds.(2)
Accordingly, although I vote to authorize the filing of the settlement, I dissent as to Paragraphs II.A and II.B of the proposed order on the ground that those provisions are overly broad.
1. I agree with Commissioner Thompson that the order properly bars Oliver from directly or indirectly misrepresenting his government affiliation in any way, including through the use of words and symbols commonly referring to government entities. My basis for objecting to Paragraphs II.A and II.B, however, is that they prohibit Oliver from using such words and symbols in all promotional materials, even when he is not even remotely making any claim, implied or express, of government affiliation.
2. It is instructive to compare the relief in this case with that imposed in the postal employment scam sweep, Operation Stamp Out Job Fraud, where businesses also falsely implied that they were affiliated with the federal government. The conduct restrictions in the Job Fraud settlements enjoined the defendants from "falsely representing" that an employment program is affiliated with the Postal Service and from "falsely representing" any material fact regarding employment with the Postal Service or any other employer. In contrast with the proposed order against Oliver, the Job Fraud orders were tailored to prevent false representations similar to those that were the subject of the underlying complaints but did not broadly prohibit the defendants from using the terms "U.S." or "Postal" in the sale or marketing of any good or service.