Senator Joe Manchin’s decision to torpedo the Build Back Better Act has wide-ranging consequences, including one that hits close to home, so to speak. Tucked in the bill was a provision to provide the FTC with authority to seek civil penalties for all violations of Section 5 of the FTC Act (something the FTC Act currently does not allow). This provision, which was vehemently opposed by a broad range of business groups, essentially has died on the vine. Although proposals to arm the FTC with such authority may be resurrected in future spending bills or standalone legislation, as of today, Congress’s focus appears to have narrowed on regulation of Big Tech, including the creation of a data privacy bureau within the FTC.
In the meantime, Senator Mike Lee, Republican of Utah, has introduced a new bill, the Consumer Protection and Due Process Act, which would provide the FTC with the authority to seek equitable remedies (including consumer restitution) under Section 13(b) of the FTC Act. This bill is a direct response to the April 2021 Supreme Court’s decision in AMG Capital Mgmt. finding the FTC did not have the authority to seek equitable remedies under current law (for more on that watershed case, click here and here). Notably, the bill has built-in guardrails to ensure the FTC does not “engage in substantial overreach.” Those guardrails include: