By: David Bland
In the wake of the Omicron variant’s global surge, as COVID-19 case counts neared their peak of over 800,000 new cases per day across the U.S., the Federal Trade Commission (FTC) publicized a series of cease and desist demands it sent to 25 businesses over the past six months. Granted under the authority of the COVID-19 Consumer Protection Act, the list included four direct sellers targeted in November and December 2021.
By: David Bland
Words matter, and the deliberate deletion of ‘legitimate business activity’ from the FTC’s draft Mission Statement is material and meaningful. This move is likely to trigger another hostile response, creating an unnecessary distraction of the Agency’s own making.
— John Villafranco, Partner, Kelley Drye & Warren LLP
The U.S. Chamber of Commerce, the nation’s most powerful corporate lobbying group and a long-time adversary of the Federal Trade Commission (FTC), sent three letters to Commission Chairwoman Lina Khan on Nov. 19, objecting to recent actions by the Commission that the Chamber considers to be abuses of power.
In an incendiary accompanying statement, U.S. Chamber President and CEO Suzanne P. Clark said: “The FTC is waging a war against American businesses, so the U.S. Chamber is fighting back to protect free enterprise, American competitiveness, and economic growth.”
By: David Bland
I think the FTC’s current aggressive posture is that they are trying to hold high-level executives liable for the actions that happened at a very low level, across a broad array of businesses—not just multi-level marketing or even the earnings claims area.
—Maureen Ohlhausen, Former Acting Chairman
(2017 to 2018), FTC
The Federal Trade Commission (FTC) issued its third Notice of Penalty Offenses in as many weeks on Oct. 26. After putting 70 for-profit colleges on notice earlier in the month for making deceptive claims regarding graduates’ job and earning prospects, followed by a Notice to 700 national advertisers about misleading endorsements, testimonials, and fake product reviews, the Commission turned its focus to companies that offer money-making opportunities.
The Federal Trade Commission is in the midst of a sea change—a change in leadership, a change in ideology and a change in philosophy. Signaling the most significant course correction of the past 40 years, the Commission is reversing a self-imposed disarmament from the 1980s deregulation era while at the same time asking Congress to strengthen its powers under the FTC Act. This revitalized Commission has also released a target list, and direct selling is on it.
By: David Bland
The (FTC) is saying ‘we’ve got other tools,’ but what they are hoping for is that Congress will act.
—John Villafranco, Partner, Kelley Drye & Warren LLP
At a time when the FTC should be contrite for having been caught for abusing its power, they’re doubling down.
—Kevin Thompson, Partner, Thompson Burton PLLC
The Federal Trade Commission’s (FTC) focus on its power to punish continued in recent weeks as it threatened the use of punitive action against its favorite targets. The Commmission’s latest announcement has important implications for industries under its scrutiny, including the direct selling channel.