Last month, the Federal Trade Commission (FTC or Commission) published its Statement of Regulatory Priorities (Statement), announcing its regulatory agenda for 2022. The Statement suggests that the agency will focus largely on rulemaking. New rules will seek to advance President Biden’s agenda of promoting competition in the American economy.
Rulemaking Focus
The FTC “is an independent agency charged with rooting out unfair methods of competition and unfair or deceptive acts or practices.”[1] In 2022, the FTC will continue seeking to effectuate that purpose with a focus on rulemaking. This rulemaking focus for 2022 is seemingly motivated by notable developments in 2021, including the U.S. Supreme Court’s April 2021 decision in AMG Capital Management LLC v. FTC[2] and internal changes to the FTC’s rulemaking procedures.
As discussed in our blog post here, in April 2021, the Supreme Court held in AMG that the FTC does not have authority under the Federal Trade Commission Act (FTC Act) Section 13(b) to seek equitable monetary relief, such as restitution or disgorgement.[3] In doing so, the Court resolved a circuit split, siding with the Third and Seventh Circuit Courts of Appeals. As Justice Breyer explained, writing for a unanimous court, Section 13(b) of the FTC Act “authorizes the Commission to obtain, ‘in proper cases,’ a ‘permanent injunction’ in federal court against ‘any person, partnership, or corporation’ that it believes ‘is violating or is about to violate, any provision of law’ that the Commission enforces.”[4] The question for the Court was whether that statutory language authorized the FTC to seek, and a court to award, equitable monetary relief, such as restitution or disgorgement.[5] The Court’s answer was no: The Commission cannot seek equitable monetary relief through Section 13(b). However, AMG did not limit the FTC’s ability to seek consumer redress, such as restitution or disgorgement through enforcement of its own rules. By focusing on rulemaking in 2022, the FTC can limit the impact of the AMG ruling and resume pursuit of financial penalties in federal district court.
Notably, it is also now easier for the FTC to make new rules. In 2021, the Commission streamlined its Rules of Practice by eliminating certain “bureaucratic steps and unnecessary formalities” self-imposed on the FTC in 1980.[6] Essentially, the FTC realigned its rulemaking procedures with the statutory text of Section 18 of the FTC Act by revoking certain requirements that limited the agency’s authority to set the rulemaking agenda and designate disputed issues of material fact earlier in the rulemaking process, as well as requirements related to staff reports for final rules. The changes will “make new consumer-protection rulemakings more feasible and efficient while still preserving robust public participation.”[7]
New Rules
The FTC’s Statement of Priorities details sets of new rules that will fall into three major categories. First, the Commission will “explore whether rules defining certain ‘unfair methods of competition,’ prohibited by Section 5 of the FCT Act would promote competition and provide greater clarity to the market.”[8] Second, the FTC will consider whether rulemaking in the area of surveillance-based business models “would be effective in curbing lax security practices, limiting intrusive surveillance, and ensuring that algorithmic decision-making does not result in unlawful discrimination.”[9] Such rules would address both consumer protection, as well as competition issues. Third, the FTC also will seek “to define with specificity unfair or deceptive acts or practices.”[10]
These new rules will further President Joe Biden’s announced goal of promoting competition in the American economy. On July 9, 2021, the president affirmed in Executive Order No. 14036 that it is his administration’s policy to “enforce the antitrust laws to combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony.”[11] In that executive order, the president explicitly encouraged the FTC to consider competition rulemaking relating to noncompete clauses, surveillance, the right to repair, pay-for-delay pharmaceutical agreements, unfair competition in online marketplaces, occupational licensing, real-estate listing and brokerage, and industry-specific practices that substantially inhibit competition.[12] The FTC agenda for 2022 confirms that the Commission is on board with the president’s agenda.
[1] Federal Trade Commission, Statement of Regulatory Priorities at 1 (Dec. 10, 2021), https://www.reginfo.gov/public/jsp/eAgenda/StaticContent/202110/Statement_3084_FTC.pdf.
[2]141 S. Ct. 1341 (2021).
[3] Keith J. Barnett, Timothy Butler, Barbara Sicalides, Carlin McCroy, Troy Jenkins & Matthew White, Unanimous Court Cuts FTC’s Power to Seek Monetary Redress, Consumer Financial Services Law Monitor (Apr. 23, 2021), https://www.consumerfinancialserviceslawmonitor.com/2021/04/unanimous-court-cuts-ftcs-power-to-seek-monetary-redress/.
[4] AMG, 141 S. Ct. at 1344 (citing 15 U.S.C. § 53(b)).
[5] Id.
[6] FTC, Statement at 1.
[7] Id.
[8] Id. at 2.
[9] Id.
[10] Id. at 1.
[11] Exec. Order No. 14036, 86 C.F.R. 36987 (2021).
[12] Id.