consumer protectionAs we previously blogged, the National Advertising Division held its 2017 Annual Conference in New York City last week. Kicking off the event was Mary Engle, the FTC’s Associate Director of Advertising Practices, who gave the keynote address on behalf of Tom Pahl, the FTC’s Acting Director of the Bureau of Consumer Protection. Tom has generously been very active in speaking at many industry conferences, but he unfortunately fell ill and had to miss this year’s NAD conference. Mary’s delivery of the address as “Tom” added a bit of levity to what was otherwise a very substantive set of remarks.

The remarks, delivered to a ballroom of advertising lawyers and industry players, were focused primarily on explaining the ways in which the FTC is implementing Acting Chairman Maureen Ohlhausen’s positive consumer protection agenda. Mary identified three key elements of this agenda.

First, Chairman Ohlhausen is committed to promoting and supporting industry self-regulation, which allows industry to develop solutions that conform to actual industry practices as well as frees up the FTC to devote its resources to targeting the egregious conduct that causes substantial consumer harm. Mary also reiterated that the FTC “gives bite to self-regulation’s bark” and supports industry self-regulation through carefully reviewing the NAD referrals that it receives and bringing enforcement actions in appropriate cases.

The second item on Chairman Ohlhausen’s consumer protection agenda is increasing guidance for advertisers, including establishing clear ground rules for new advertising techniques like influencer marketing on social media. Mary noted in particular the FTC’s administrative complaint in the CSGOLotto case, its first enforcement action against social media influencers (see our post here), as well as the Commission’s recent efforts in updating the Endorsement Guides FAQs and issuing educational and warning letters to select brands and social media influencers (see our previous posts here and here). This letter campaign was intended to provide guidance to the larger business community and bring companies into compliance without taking individual enforcement actions, which can be costly and time consuming.

Finally, Chairman Ohlhausen is working to fight unfair and deceptive advertising that targets certain consumer audiences. Some marketers have been targeting three audiences in particular, and these groups have become a primary focus of the FTC’s agenda: (1) older Americans; (2) people who live in rural communities; and (3) people looking to buy products made in the USA. Mary indicated that the FTC remains especially vigilant in ensuring that marketers catering to these groups make only truthful and substantiated claims.

In closing, Mary explained that fighting fraud lies at the heart of Chairman Ohlhausen’s agenda, and that the FTC has been successful in filing actions in federal court under Section 13(b) of the FTC Act to stop or prevent any violation of laws that the FTC enforces. At the same time, Mary emphasized that the FTC has an important role to play in using administrative litigation in combating deception that is not fraud—a role that accords with Congress’s intention that the FTC use administrative litigation to develop core consumer protection principles. Mary also made clear that administrative litigation can prove especially useful in national advertising cases, which often involve tough issues of claim construction and substantiation that the Commission is well suited to resolve.

So while Section 13(b) actions in federal court appear to have become the default enforcement tool in consumer protection cases in recent years, consumers would benefit if the balance shifted a little and the FTC continued to use administrative litigation as “a vehicle to develop consumer protection law and resolve issues for which agency expertise and experience are critical for proper resolution.”