The FTC has announced that it plans to move forward on an ambitious rulemaking agenda. In contrast to the CFPB’s Fall 2021 rulemaking agenda which offered no meaningful insights into the Bureau’s rulemaking plans in many key areas, the FTC has provided a clear indication of the direction it intends to take in 2022.
Before outlining the FTC’s rulemaking plans, it should be noted that the most significant information about the FTC’s rulemaking plans is not found in the agency’s rulemakings list. Rather, it is found in a separate “Statement of Regulatory Priorities” filed by the FTC. (Such statements were not filed by all agencies.) Most of the rulemakings listed in the FTC’s agenda are rulemakings that the FTC is conducting as part of its systematic review of all of its regulations and guides on a rotating basis.
The FTC began its Statement of Regulatory Priorities by describing the “changed circumstances” that have caused the FTC “to consider deploying new tools to advance its mission.” These changes consist of:
- The U.S. Supreme Court’s April 2021 decision in AMG Capital Management which held that Section 13(b) of the FTC Act does not authorize the FTC to seek, and a court to award, monetary relief such as restitution or disgorgement
- Changes to the FTC’s rulemaking process adopted in July 2021
- The FTC’s current view that “the case-by-case approach to promoting competition, while necessary, has proved insufficient, leaving behind a hyper-concentrated economy whose harms to American workers, consumers, and small businesses demand new approaches.”
The FTC indicated that in light of these changes, in 2022, it “will consider developing both unfair-methods-of-competition rulemakings as well as rulemaking to define with specificity unfair or deceptive acts or practices.” For violations of UDAP rules issued under Section 18 of the FTC Act, the FTC can file actions in federal district court seeking either consumer redress under Section 19 or civil penalties under Section 5(m)(1)(A) of the FTC Act.
In discussing the rulemakings under consideration, the FTC stated that it is “particularly focused on developing rules that allow the agency to recover redress for consumers who have been defrauded and seek penalties for firms that engage in data abuses.” Commenting that “the abuses stemming from surveillance-based business models are particularly alarming,” the FTC indicated that it is considering whether rulemaking in the area would be effective in “ensuring that algorithmic decision-making does not result in unlawful discrimination.”
The FTC’s Statement drew a strong dissenting statement from Republican Commissioners Christine Wilson and Noah Phillips. Commenting that the FTC’s plan “lays the foundation for an avalanche of problematic rulemakings,” Ms. Wilson stated that “my Democratic colleagues have long aspired to a more expansive rulemaking agenda for the agency” and that the July 2021 changes to the FTC’s rulemaking process “fast-track regulation at the expense of public input, objectivity, and a full evidentiary record.” A substantial part of Commissioner Wilson’s statement is devoted to expressing her concern about “the negative impacts of rulemaking” and explaining the reasons for her ”general aversion to rulemaking.”
Commissioner Phillips delivered a similar message. He stated that the agency’s rulemaking plans “rel[y] on unsupported assumptions and baleful rhetoric to support imposing substantial and counterproductive regulatory burdens across the economy.” According to Mr. Phillips, “[this] anti-growth scheme involves regulation after regulation that exceed our legal authority and would recast the FTC as a mini-Congress, without any of the accountability that comes with it.”