With Bedoya’s confirmation, President Biden has filled all five commissioner seats at the Federal Trade Commission and signaled his confidence that the agency can use its investigative and enforcement powers to protect consumers from unfair and deceptive practices.
With the full five-member commission and a new Democratic majority, the FTC is now poised to take on an enhanced role in protecting consumer rights and cracking down on deceptive marketing in the technology market.
Let’s examine how the FTC’s investigative and enforcement powers will be used shortly.
What does Bedoya’s confirmation mean for the FTC?
The Federal Trade Commission (FTC) is responsible for protecting consumers from unfair, deceptive or fraudulent practices in the marketplace. FTC has a broad range of investigative and administrative powers to help it accomplish its mission. This includes conducting investigations and hearings, issuing orders requiring companies to cease violating laws and regulations, filing court actions to stop violations, issuing advisory opinions on certain practices, levying civil penalties against violators of laws or regulations, and publishing rules that protect consumers.
The FTC also has the authority to issue decisions regarding antitrust and consumer protection law violations through adjudication or settlement proceedings. Through these processes, the FTC can issue orders requiring companies to take corrective action or disgorge profits gained due to wrongful conduct. The FTC also has enforcement power to ensure that companies comply with any requirements imposed by law or regulation.
Additionally, the FTC is authorized by Congress to prescribe unfair or deceptive acts or practices in various areas including advertising, marketing and telemarketing; data security; privacy; finance; debt collection; health care; credit reporting; employment recruitment and selection procedures; product warranties; loan brokering/referral services; pricing/rebates/mark ups / mark downs. The Commission also identifies emerging markets where fraud may take place before they are visible to other federal authorities. Furthermore, the FTC pursues individuals who engage in fraudulent activities to protect consumers from further harm caused by such activities and holds businesses accountable for their involvement in wrongdoing against individuals and other businesses through imposition of corporate sanctions such as civil penalties when applicable.
FTC’s Investigative Powers
With the confirmation of Assistant Attorney General Rebecca Kelly Bedoya to the Federal Trade Commission, the FTC has been provided with a renewed focus on its investigative and enforcement powers. The FTC’s mission to protect consumers and promote competition is at the forefront of Bedoya’s agenda, and her confirmation is a step in the right direction for the agency.
Understanding what Bedoya’s confirmation means for the FTC’s investigative and enforcement powers is important.
Authority to investigate potential violations of the law
The FTC has the authority to conduct investigations into alleged law violations, including civil and criminal actions. This authority is provided by the Federal Trade Commission Act and several other statutes that direct the FTC to protect consumers and prevent deceptive acts or practices.
The FTC typically initiates an investigation when it receives a complaint from a consumer, business or government agency; develops evidence of potential misconduct through other sources, such as media reports; or identifies a potential violation through its research. Additionally, the FTC may investigate an industry or company if there is evidence that it is engaging in deceptive business practices that could similarly affect all consumers.
The FTC’s investigative power allows it to access information held by companies under investigation and documents submitted during previous investigations. It has the authority to issue subpoenas and orders of inspection demanding records and other materials pertinent to any investigation or enforcement action. Furthermore, it can seek temporary restraining orders or preliminary injunctions to halt activity suspected of violating federal law while its investigation continues. Suppose violations are found after an investigation is complete. In that case, the FTC can pursue civil penalties or criminal cases against individuals and corporations engaging in deceptive acts that harm consumers.
Authority to issue subpoenas
The FTC has the authority to compel the production of documents and testimony through subpoenas. These subpoenas, issued upon authorization of a majority of the Commission, compel individuals or entities to produce records, papers, or other materials relevant to an investigation. The persons from whom records are sought must comply with the subpoena and willfully failing to do so may result in contempt proceedings.
When deemed necessary by the Commission for investigations undertaken under its statutory powers and for trade regulation rulemaking proceedings, it has the authority to issue compelled requests for testimony from witnesses (Order Requiring Oral Testimony). Individuals who receive Order Requiring Oral Testimony must comply. Failure or refusal can result in civil penalty proceedings before an administrative law judge authorizing up to $11,000 per daily violation.
In circumstances where further assistance is needed in obtaining records under an investigation or trade regulation rulemaking proceeding, both Section 9 of the FTC Act and Section 6(b) of the Clayton Act authorize third-party investigative subpoenas granted by federal district courts that require individuals or entities outside of FTC’s jurisdiction (such as non-U.S entities) to produce information relevant under certain circumstances.
Authority to conduct hearings
The Federal Trade Commission Act of 1914 provides the FTC authority to conduct hearings and investigations, require records and documents, publish reports, and make necessary findings to enforce its rules for consumer protection.
Under this authority, the FTC can narrow down violations to a particular entity or person to ensure compliance with statutes and regulations. The FTC has the authority to issue subpoenas, compel testimony, issue orders through administrative law judges, impose civil penalties and prison terms, enjoin persons or corporations from continued or anticipated violations of the FTC Act. In addition, the FTC has investigative powers requiring subjects of its inquiries to provide accurate information via sworn testimony. This can help Commission lawyers assess whether an investigation is warranted in response to complaints brought before them or without formal complaints being filed.
The Commission may conduct a hearing as part of an investigation if it finds grounds for believing that any person may have committed an illegal act against consumer protection laws (such as Section 5(a) of the FTC Act). During these hearings, parties must provide evidence under oath addressing their alleged violation and other relevant factors influencing their compliance with consumer protection laws. In addition, the Commission can initiate a market study before holding a hearing to make more informed decisions on whether proceedings should occur. Depending on their findings from such studies and subsequent hearings, the Commission may propose a settlement or even find compelling evidence for litigation against those suspected of violating consumer protection statutes.
FTC’s Enforcement Powers
With the confirmation of Rebecca Kelly Slaughter to the Federal Trade Commission (FTC) by the Senate on April 22, 2021, Joseph Simons’s tenure as Chairman of the FTC will end. Andrew Bedoya was recently confirmed as Commissioner by the Senate and will take the lead in the FTC’s enforcement authorities.
So what does this change mean for the FTC’s investigative and enforcement powers? This section will discuss the implications of Bedoya’s confirmation and the new powers of the FTC.
Authority to issue cease and desist orders
The Federal Trade Commission (FTC) can issue cease and desist orders. These orders allow the FTC to stop any act or practice that violates a federal consumer protection law, including unfair or deceptive practices such as false advertising. The order requires those subject to it to stop the conduct immediately and take steps to correct its effects.
Suppose the FTC believes a person or company is engaged in an act or practice violating consumer protection laws. In that case, it will first attempt to contact the alleged violator and ask them to voluntarily comply with these laws. If they do not respond or are unwilling to comply, the FTC may issue a cease and desist order. The issuer of such an order must prove that previous attempts at obtaining voluntary compliance were unsuccessful.
When issuing a cease and desist order, the FTC may include provisions for civil penalties, including financial restitution for affected consumers, civil fines, and other sanctions against persons found by the Commission to have violated consumer protection laws. In addition, an enforcement action could also result in additional requirements for companies subject to it such as monitoring reports filed with regulatory bodies periodically. Finally, failure to comply with an FTC’s cease-and-desist order could result in criminal prosecution of those involved resulting in fines and imprisonment for certain violations of federal law.
Authority to impose civil penalties
The Federal Trade Commission has the authority to impose civil penalties on companies and individuals who fail to comply with any provision of an applicable trade regulation rule. The type and amount of penalty imposed is a matter for the discretion of the Commission; however, it can face fines up to $12,000 per violation or $43,792 for each day a violation continues. In extreme cases, criminal penalties including imprisonment may also be imposed.
In addition to monetary penalties, the FTC can order corrective action such as changing business practices and offering refunds to affected customers. The FTC also can sue a company or individual in federal court if its investigations reveal evidence of unfair or deceptive trade practices violating the law.
Companies found liable for violating FTC regulations may be subject to additional enforcement actions such as stopping shipments of suspect products and being barred from making false advertisements or engaging in certain marketing activities until certain conditions have been met.
Authority to seek injunctive relief
The FTC has broad power under Section 13(b) of the Federal Trade Commission Act (FTCA) to obtain “injunctive relief,” which prohibits future fraudulent, deceptive and unfair practices. In addition, section 13(b) authorizes the FTC to seek a federal court order requiring defendants to comply with trade regulation rules.
The specific relief sought can include an injunction ordering a defendant:
- To stop engaging in any fraudulent or deceptive practices
- To stop using or marketing any products or services found to be false or misleading;
- To refund money paid by consumers as restitution;
- To pay civil penalties; and/or
- To give the FTC access to records, documents in connection with enforcing FTC regulations.
The FTC’s power under Section 13(b) is valuable because it allows the Commission to take quick action, such as an immediate halt in distributing unsafe products, particularly when no congressional authorization exists. It also enables the Commission to immediately end unfair methods of competition that are having a serious negative impact on consumers. Additionally, it offers consumers quick relief from potential harm caused by false and deceptive advertising practices.
What Does Bedoya’s Confirmation Mean for the FTC?
On May 11, 2021, President Joe Biden nominated Manisha Bedoya to serve as a Commissioner of the Federal Trade Commission (FTC). Bedoya’s confirmation would bring the FTC to its full complement of five Commissioners, influencing the agency’s investigative and enforcement capabilities.
Let us look at what Bedoya’s confirmation means for the FTC.
Increased focus on consumer protection
The confirmation of FTC Chairman Joseph Simons and Commissioners Noah Phillips, Christine Wilson, and Rohit Chopra creates a quorum on the agency’s board. This marks the first time in two years that the FTC has had a full complement of five commissioners and officially shifts the commission to a Republican majority.
This development is likely beneficial for consumer protection efforts as it provides an opportunity for decisive action in investigations and enforcement. Specifically, President Trump’s nominee Joseph Simons has indicated he will place greater emphasis on deceptive practices against consumers and strengthen privacy policies. He has also previously expressed interest in using monetary fines to measure the success in deterrence efforts related to misconduct by companies or stakeholders.
Importantly, Chairman Simons is expected to focus on targeted areas such as financial technology (FinTech), algorithmic decision-making tools which may be biased and hurt consumers, privacy issues involving data collection, data interoperability challenges particularly within healthcare technology companies (healthtech), as well as other tech challenges. The new leadership team also clarified that it will emphasize traditional antitrust work involving mergers & acquisitions among large corporations and potentially enforcing market integrity if industries are not competitive or are unfairly considered anticompetitive.
In essence, this new FTC board is poised to take more forceful action in protecting the American public from unfair practices that may result from technological advancements. As the agency moves forward under a Republican leadership team focused on consumer protection, anticipated issues may see resolutions based on enforcers strengthened powers with possibly significant fines enforced against large companies that violate federal regulations or break laws concerning human rights or environmental regulations without consequence.
More aggressive enforcement of existing laws
Alejandro Bedoya’s confirmation to fill the vacant seat at the Federal Trade Commission (FTC) is being welcomed by consumer protection advocates. Bedoya’s record on consumer protection issues is seen as a sign of a renewed commitment to enforcement of the FTC’s investigative and regulatory powers. This could lead to more aggressive enforcement of existing laws that protect individuals and corporations from unfair or deceptive practices.
Under Bedoya, the FTC will likely focus more resources on privacy, data security and anti-competitive behavior investigations. This increased enforcement presence will likely have a chilling effect on companies not complying with applicable laws, leading them to actively seek ways to ensure they comply with applicable policies and regulations. The FTC may also be more willing to bring action against businesses that violate existing law, particularly in accountable corporate decision making processes that support placing consumers first.
Bedoya is also viewed as an advocate for reducing unnecessary regulatory burden for small business owners and innovators who need devoting more resources towards development projects rather than spending time wading through red tape. This could mean the FTC takes a proactive approach to eliminating unnecessary regulations while ensuring compliance with widely accepted standards such as privacy requirements or environmental sustainability standards.
Potential for new regulations and legislation
With the confirmation of Noah Phillips, a former Republican congressional staff member, to one of the open seats at the Federal Trade Commission (FTC), the agency is now led by five commissioners including its current Chairman Joe Simons. This has been seen as a sign of bipartisanship within an agency that boasts that it respects and maintains political neutrality — something that both Democrats and Republicans can appreciate.
As Phillips brings new ideas to the FTC, Commissioner Simons is expected to leverage his financial background to focus on anticompetitive practices from large tech companies. His scrutiny could lead to new regulations and legislation to help protect consumers from antitrust abuses. Additionally, Simons has already laid out plans for rigorous enforcement against companies that violate consumer protection laws — something he hopes will be backed with support from Phillips.
With two prominent power players now on board, the FTC could become stronger than ever before and set a tone for stronger protections among consumers. However, we will have to wait and see how all five commissioners come together to craft better policies for nationwide businesses.