Emphasizing the need for consistent enforcement, the Federal Trade Commission submitted a comment to the Federal Communications Commission urging that the sellers of goods and services should be held responsible for sales calls made by others on their behalf, even if the seller did not physically place the calls.
The comment came as part of the lawsuit brought by the FTC and four states against Dish Network in which they alleged that the company engaged in multiple violations of the Do Not Call rules.
The FCC asked questions regarding the interpretation of the Telephone Consumer Protection Act: First, does a call placed by an entity that markets a seller’s goods and services qualify as a call made on behalf of, and initiated by, the seller, even if the seller does not physically place the call? And second, what should determine whether a telemarketing call is made “on behalf of” a seller, thus triggering liability under the TCPA? Should federal common law agency principles apply, and what, if any, other principles could be used to define “on behalf of” liability for a seller under the TCPA?
Relying on its experience enforcing the Telemarketing Sales Rule – and referencing its 59 enforcement actions alleging Do Not Call violations since 2003 – the FTC answered the first question in the affirmative and said the plain meaning of “on behalf of” should be used when determining if illegal conduct took place.
Responding to what constitutes a marketer’s efforts “on behalf of” a seller, the FTC said the question turned upon “whether the marketer’s solicitations are in the seller’s ‘interest’ or ‘aid’ or for the seller’s ‘benefit.’ ”
This definition “ensures that sellers will not be rewarded for turning a blind eye to those who market sellers’ goods or services and whose marketing efforts inure to sellers’ benefit,” the FTC said.
An opposite interpretation would “completely subvert Congress’s privacy-protection goals,” according to the FTC, because sellers could avoid liability by having others place calls on its behalf.
The FTC has emphasized that it “consistently maintained” that “a seller cannot escape liability for the telemarketing violations of its marketer,” and the two agencies should strive for a uniform application of the Do Not Call rules.
“Conformity in this regard is essential to promote key law enforcement goals and to effectuate Congress’s mandate to create a federal standard for protecting consumers’ privacy,” according to the comment.
The FTC noted that the FCC itself concluded in 1995 that an entity could be liable under the TCPA for a call made on its behalf where the entity did not place the call, and said that order was consistent with its own precedent.
To read the text of the FTC’s comment, click here.
Why it matters: “The Do Not Call Registry is important to the FTC, but is absolutely critical to consumers who want a stop to the telemarketing and robocalls that interrupt their dinner hour,” FTC Chairman Jon Leibowitz said in a statement about the case. “We hope that the FCC acts quickly to resolve this issue.” According to Chairman Leibowitz, resolving the questions in the manner urged by the FTC would “effectuate consumers’ desire to protect their privacy and avoid telemarketing calls,” as well as to “ensure [that] the FTC and the FCC can effectively protect consumers’ privacy by holding both sellers and their marketers liable for violations of Do Not Call and Robocall Rules.”