The Federal Trade Commission testified before the House Energy and Commerce Subcommittee on Consumer Protection and Commerce on legislation to modify the FTC’s authority and address other pressing issues facing the agency.
Testifying on behalf of the Commission, FTC Chair Lina M. Khan and Commissioners Noah Joshua Phillips, Rohit Chopra, Rebecca Kelly Slaughter, and Christine S. Wilson expressed gratitude to the Subcommittee for all it is doing to ensure the agency’s critical work can continue. Many of the reform measures currently before Congress give the Commission a much-needed boost in critical areas where enforcement tools are needed, the testimony states.
The FTC plays a critical role in ensuring that markets are fair for individuals, families, and honest businesses but, the testimony notes, the agency currently faces many challenges: A surge in corporate mergers threatens to further concentrate market power and protect dominant incumbents, and the Commission’s ability to tackle key challenges -- from COVID fraud to anticompetitive conduct – has been substantially diminished after the Supreme Court’s recent AMG decision, which barred the agency from seeking monetary relief under Section 13(b) of the FTC Act.
In addition, the testimony notes, the FTC is facing severe resource constraints as it works to address the soaring number of global mergers and acquisitions and a large numbers of consumer complaints to the agency about a broad range of pandemic-related marketplace abuses. The Commission believes that additional resources are necessary to help it effectively achieve its mission.
In spite of these challenges, the FTC has worked vigorously to ensure that its critical work can continue, the testimony states. Since the beginning of the pandemic, thanks in part to the civil penalty authority provided by this Subcommittee in the COVID-19 Consumer Protection Act, the Commission has successfully halted dozens of COVID-related scams. The agency also reached out to communities most affected by fraud, alerting the public to the threats posed by scams and those who facilitate them.
Of particular importance is the Committee’s work to restore the Commission’s ability to secure monetary relief from those that violate the law. Until the Supreme Court’s recent decision in AMG¸ the Commission relied on its 13(b) authority to return billions of dollars to defrauded Americans, and to ensure that lawbreaking companies could not pocket their ill-gotten gains. For example, pending cases today involve $2 billion in potential relief to victims, which is not available after AMG.
The Commission also now faces challenges in obtaining injunctive relief, the testimony notes. In FTC v. Shire ViroPharma, Inc., the Third Circuit held that the language in Section 13(b) of the FTC Act describing a company that “is engaged in, or is about to engage in” illegal conduct means the FTC can initiate enforcement actions only when a violation is either ongoing or “impending” at the time the suit is filed. This decision limits the Commission’s ability to hold accountable entities who engaged in illegal conduct that occurred entirely in the past. The district court’s recent dismissal of the FTC’s antitrust complaint against Facebook cited the ViroPharma opinion in concluding that the Commission could not use Section 13(b) to address Facebook’s alleged past anticompetitive conduct. Restoring the FTC’s power to seek injunctions and monetary relief is critical to our work to protect Americans from unlawful business conduct.
The Commission vote to approve the testimony was 5-0.