Venable attorneys Eric Berman and Dan Blynn hosted a virtual fireside chat with attorney advisors to four current Federal Trade Commission (FTC) commissioners. Touching on each commissioner’s background and enforcement priorities, the FTC attorney advisors offered insights into best practices and insider perspectives on interacting with the FTC through a series of questions and answers, posed by the Venable team and submitted by audience members. Each panelist spoke on their own behalf, and not on behalf of the FTC, but they provided our audience with unvarnished views on FTC practice and policy.

The panelists were:

  • Austin King, Office of Commissioner Slaughter
  • Sam Levine, Office of Commissioner Chopra
  • Eitan Levisohn, Office of Commissioner Phillips
  • Robin Spector, Office of Commissioner Wilson

This summary distills the broad takeaways and common themes of the discussion. A recording of the webinar with more detailed attorney advisor analysis is available here.

Do FTC staff attorneys take their cues on investigation targets and relief sought from commissioners’ priorities, or are staff taking issues they identify as problematic to the commissioners?

While each commissioner has unique policy and enforcement priorities, there are overarching consumer protection and antitrust concerns that all commissioners share. Each commissioner brings a distinct area of focus, and some of those include privacy and data security, “bread and butter” fraud cases (i.e., marketing scams that severely harm consumers), and potentially predatory lending and financing practices. Staff also flag issues to help commissioners focus on trends in the market and identify new areas of scrutiny. The FTC has jurisdiction over nearly every sector of the entire economy, so staff have to be very deliberate in deciding what to investigate while being responsive to the priorities of commissioners. Staff also monitor consumer complaints and are themselves consumers who may discover potentially unlawful practices directly.

Have FTC staff tended recently to take a harder-line approach in seeking equitable monetary relief for consumers?

Commissioners’ views on monetary relief are somewhat divergent. Messrs. King and Levine indicated that their commissioners do not believe “no money” FTC orders serve as a sufficient deterrent to combat blatant fraud. Ms. Spector and Mr. Levisohn, on the other hand, noted their bosses’ potentially contrary view that strong injunctive relief itself may deter misconduct in certain cases, and that there is value to settling investigations and preserving limited FTC resources for other business.

Should the FTC issue a formal policy statement on equitable monetary relief?

The commissioners also have varying opinions on the value of policy statements. It is public knowledge, of course, that Commissioner Chopra favors the issuance of a policy statement on monetary remedies in cases involving blatant deception. More generally, while the economic and legal analysis undertaken to promulgate policy statements can itself be quite valuable (and policy statements may also be an important component of enforcement programs), reaching consensus can be difficult and may render the resulting policy statement more problematic than useful.

In its October term, the Supreme Court is considering the ability of the FTC to obtain equitable monetary relief from federal district courts under Section 13(b) of the FTC Act. Should the Supreme Court rule that Section 13(b) does not entitle the FTC to seek equitable monetary relief in court, then the FTC may look to Congress to clarify 13(b)’s reach. But the Commission has other “tools” to seek monetary relief, and it can and will use those means as appropriate. Overall, the FTC will continue its enforcement work and will deal with the loss of this enforcement authority if it happens.

What should businesses know about commissioner meetings?

Businesses that are investigated by the FTC may have the opportunity to meet with the commissioners before the FTC formally votes on a course of action. In general, the chain of command within the FTC is very effective. Staff attorneys lead investigations and have significant autonomy in doing so. As investigations near their conclusion, staff will keep their division management, the bureau management and, ultimately, the commissioners informed. All four panelists offered helpful tips for investigation targets who plan to meet with the commissioners, including, among other things:

  • Bring diverse business and legal teams to the meeting;
  • Allow junior staff and associates who have first-hand knowledge of the business operations to attend and actively participate;
  • Bring businesspeople to the table – CEOs, CFOs, business managers, etc.; and
  • Own any mistakes made and express genuine contrition for compliance leaks.

As an anecdotal example of a “horror story,” the advisors recalled a management presentation to an FTC commissioner that was so poorly executed that it resulted in the FTC adding a new individual defendant to the case who had not previously been under investigation. Attorneys should think of Commission meetings as depositions and prepare the presentation team accordingly.

White papers and other submissions are useful. There was consensus that the commissioners read them and might prioritize them over other paperwork for capturing critical facts. When preparing white papers and other written submissions:

  • Plan to provide them a few days in advance so that they can be reviewed and considered;
  • Assert solid legal arguments that are supported by facts and case law;
  • Reach out to an attorney advisor after submission of a white paper to facilitate a discussion on what specific aspects the commissioner might want to focus, which can contribute to a more effective meeting and impact who is selected to be in attendance on behalf of the business;
  • Use presentations to guide the discussion, but not as verbatim scripts to be leaned on like a crutch – commissioners may explore unanticipated lines of questioning during these meetings, which may present new opportunities for a business under scrutiny; and
  • Remember that the commissioners and their staff are in constant communication and they compare notes. Therefore, avoid inconsistent presentations to different commissioners.

What are the commissioners’ views on Bureau of Consumer Protection (BCP) rulemaking?

Under the Magnuson Moss Warranty Act, the FTC can enact legislative rules that define unfair or deceptive practices with specificity. The FTC doesn’t generally engage in Magnuson Moss rulemaking, but it remains one tool enabling the FTC to look for prevalent, unfair practices across the market and to address specific misconduct. Some commissioners believe rulemaking can help in areas of wide misconduct, while other commissioners take a “go-slow” approach to rulemaking. While the intent of rulemaking is to remedy wrongdoing, the possibility of unintended consequences with rulemaking is worrisome for some within the FTC and might be more bureaucratic than helpful. There is not consensus on whether rulemaking is productive or unduly burdensome.

The full recording and slides for this webinar and the other installments in the Not a Symposium, but a Virtual Ad Law CLE Bonanza can be found here.