Legislation would empower the Commission with authority the US Supreme Court rules it never had to begin with
By: SSN Staff
On May 3, Senate Commerce Committee Chair Maria Cantwell (D-Washington) introduced legislation to reconstitute the Federal Trade Commission’s (FTC) ability to return money to consumers under Section 13(b) of the FTC Act by restoring the Commission’s monetary authority to seek redress on behalf of wronged consumers. This authority was unanimously nullified by the Supreme Court in the AMG Capital Management v. FTC decision handed down in April 2021.
This legislation, The Consumer Protection Remedies Act of 2022, allows the FTC to go to federal court to seek judgments returning to consumers the ill-gotten gains from unfair or deceptive conduct of violators and bad actors. The bill also provides for monetary redress for consumers harmed by anti-competitive conduct. Furthermore, the legislation provides for the ability of the Commission to sue for injunctive relief and consumer redress
for prior conduct, as well as ongoing conduct.
This bill was made public one day after the release of a Commerce Committee report detailing the implications of the Supreme Court’s AMG decision and arguing for a restoration of FTC powers. The 80-page report, focusing primarily on the purported harm to consumers perpetrated by Big Tech and Big Pharma companies, also gives a state-by-state breakdown of FTC 13(b) cases prior to the AMG decision that resulted in significant consumer refunds, including the Commission’s action against direct seller Herbalife.
While Section 19 of the FTC Act provides for monetary restitution and relief to wronged consumers, the Commerce Committee’s report argues the need for legislation that would remedy the “lengthy process involving both administrative adjudication and federal court litigation that would take years before consumers could receive refunds.”
Monetary relief should not be available for every consumer protection violation but should be reserved for the most egregious types of cases.
— US Chamber of Commerce
US Chamber Calls Bill ‘Troubling’
In a letter to Senator Cantwell, U.S. Chamber of Commerce Executive Vice President Neil Bradley said, “This legislation would grant sweeping enforcement powers to the Federal Trade Commission,” and the proposed bill “has no meaningful bipartisan or stakeholder involvement.”
The Chamber has previously expressed its concern with any legislation that would circumvent the “reasonable person” standard found in Section 19, which states that the Commission must demonstrate that “a reasonable [person] would have known under the circumstances [that the conduct] was dishonest or fraudulent.” In an April 2021 letter to the Commerce Committee, the Chamber states: “Monetary relief should not be available for every consumer protection violation but should be reserved for the most egregious types of cases. Section 19 recognizes this by inserting a ‘reasonable person test’ for the courts to utilize, however, the FTC draft language fails to include such a standard in its proposed text.”
Future of Bill Uncertain
While both sides of the congressional aisle have expressed interest in reining in Big Tech and Big Pharma, Chair Cantwell’s bill, co-sponsored by Senators Amy Klobuchar (D-Minnesota), Raphael Earnock (D-Georgia) and Ben Ray Luján (D-New Mexico), is expected to receive significant pushback from Senate Republicans.
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