On July 28, the House Committee on Energy and Commerce’s Subcommittee on Consumer Protection and Commerce held a hearing titled “Transforming the FTC: Legislation to Modernize Consumer Protection” to discuss, among other things, the importance of restoring the Commission’s ability to secure monetary relief from companies and individuals that violate the law. Testifying before the subcommittee were FTC Chair Lina M. Khan and Commissioners Noah Joshua Phillips, Rohit Chopra, Rebecca Kelly Slaughter, and Christine S. Wilson. Khan and the Commissioners discussed pending federal legislation intended to modify the FTC’s authority and addressed severe resource constraints affecting the FTC’s attempts to address the increasing number of global mergers and acquisitions, as well as the large number of consumer complaints related to Covid-19 pandemic-related marketplace abuses. They noted that despite these challenges, “thanks in part to the civil penalty authority provided by this Subcommittee in the COVID-19 Consumer Protection Act,” (covered by InfoBytes here) “the Commission has successfully halted dozens of COVID-related scams.”
Khan and the Commissioners also discussed the importance of restoring the FTC’s ability to secure monetary relief from those that violate the law, which was limited following the U.S. Supreme Court’s recent decision in AMG Capital Management v. FTC (covered by InfoBytes here). “[P]ending cases today involve $2 billion in potential relief to victims, which is not available after AMG,” the testimony provided. “Unless the agency has clear authority to obtain monetary relief, this decision will continue to impede our ability to provide refunds to Americans harmed by deceptive, unfair, or anticompetitive conduct.” Moreover, a recent decision issued by U.S. Court of Appeals for the Third Circuit “held that the language in Section 13(b) of the FTC Act describing a company that ‘is engaged in, or is about to engage in’ illegal conduct means the FTC can initiate enforcement actions only when a violation is either ongoing or ‘impending’ at the time the suit is filed.” This decision, the FTC claimed, “limits the Commission’s ability to hold accountable entities who engaged in illegal conduct that occurred entirely in the past.