Features

Wilson’s departure will leave Republicans without a voice on the Commission until the seat is filled 

By:  David Bland

On Feb. 14, the Federal Trade Commission’s lone Republican Commissioner, Christine Wilson, announced in a blistering Wall Street Journal op-ed that her resignation was imminent due to her belief that Commission Chair Lina Khan has been abusing her power. 

Nominated to the FTC in 2018 by President Trump, Commissioner Wilson is an antitrust lawyer who has penned several dissenting statements to push back on Khan’s ambitious agenda, including the Commission’s November 2022 Policy Statement that more broadly construes “Unfair Methods of Competition.” The FTC had also presented a rulemaking proposal in January 2023 to ban virtually all noncompete contracts.

By:  SSN Staff

On Jan. 31, The Direct Selling Association (DSA) filed public comments on the Federal Trade Commission’s Advanced Notice of Proposed Rulemaking (ANPR) on the Business Opportunity Rule (BOR). The ANPR was released in November 2022, at which time the Commission asked the public to comment on the broadening of the rule and also on the effectiveness of the current BOR.

Established in 2012, the BOR sets guidelines for those selling a business opportunity to ensure that potential buyers receive the information required to make an informed decision. The rule prohibits sellers from making deceptive claims about the opportunity and mandates key disclosures to be provided via a disclosure document, including identifying information about the seller, information and substantiation of the seller’s earnings claims, documentation of any legal actions against the seller, the cancellation and refund policy, and a list of purchasers from the previous three years. 

CEOs confident that improvements of key metrics will reverse the losses of 2022

By:  Dave Rauf

Herbalife

Herbalife boosted profits by 42% in the fourth quarter, as the company’s key business metrics stabilized and it leveraged a significant reduction in expenses during the final three months of 2022. 

The direct selling giant beat  analyst expectations for the quarter, and its new CEO, the returning Michael Johnson, said a plan has been put in place to return to growth in the “near term.” 

The seller of supplements and weight-loss products reported total fourth-quarter sales were down 10.4% to $1.2 billion. That includes a 9% slide in North America sales. 

Marketers adjust to changing consumer social media habits

By:  SSN Staff

The media landscape is becoming more fragmented than ever thanks to the emergence of new social platforms. Audience engagement is dwindling, and where once there were defined audiences and well-defined consumer behavior, there are now splintered audiences and an increasing number of platforms—all competing for the same individual’s time. 

There are approximately 4.89 billion social media users around the world. By far, Facebook has always maintained the position of the most used social media platform to date with approximately 2.9 billion monthly active users globally as reported by research firm, Datareportal. However, data published in the company’s third quarter 2022 investor earnings report showed that Facebook’s monthly active users dropped slightly over previous months. The total number of people that use Facebook each month decreased by roughly 2 million (-0.07%) in the three months leading up to July 2022.

Extensive litigation awaits the Commission if rule is finalized

By:  David Bland

“Since the agency’s creation over 100 years ago, Congress has never delegated the FTC anything close to the authority it would need to promulgate such a competition rule. The Chamber is confident that this unlawful action will not stand.” —Sean Heather, SVP for International Regulatory Affairs and Antitrust, U.S. Chamber of Commerce

On Jan. 5 the Federal Trade Commission (FTC) proposed a new rule that would ban all non-compete contracts. The major move by the Commission comes on the heels of President Biden’s July 2021 Executive Order on Promoting Competition in the American Economy, in which Biden directed the FTC to utilize its rulemaking authority to “curtail the unfair use of non-compete clauses...that may unfairly limit worker mobility,” among other requests. The order did not change any existing laws but set into motion the FTC’s move to consider non-compete clauses as “unfair methods of competition” under Section 5 of the FTC Act.

The proposed rule begins a 60-day public comment period that ends on March 20. Nearly 5,000 comments had been submitted at the time of this publishing with most of the comments strongly supporting the FTC’s new rule.

DSA, US Chamber and GOP lawmakers submit comments opposing new rule

President Biden’s Department of Labor (DOL) is continuing its push to implement a new independent contractor standard under the Fair Labor Standards Act (FLSA). Seeking to revise its guidance on establishing classification rules for independent contractors versus employees, the DOL closed the public comment docket for the Notice of Proposed Rulemaking (NPRM) titled “Employee or Independent Contractor Classification Under the Fair Labor Standards Act” on Dec. 13. This puts the DOL on schedule to finalize the rule in the second half of 2023.

Among the groups filing comments were the National Retail Federation, the National Association of Realtors and the Direct Selling Association. Congressional Republicans from both houses of Congress also submitted a joint comment. More than 55,000 comments have been submitted since the NPRM was announced in October 2022.