FTC Announces New Rulemaking Group

On March 25, 2021, the Federal Trade Commission announced the creation of a new rulemaking group within the agency’s Office of the General Counsel.  According to the FTC, the new structure will allow it to take a “strategic and harmonized approach to rulemaking across its different authorities and mission areas.”

With this new group in place, the FTC is poised to strengthen existing rules and to undertake new rulemakings to prohibit unfair or deceptive practices and unfair methods of competition.  Notably, in its announcement, the FTC referenced “the risk that the Supreme Court substantially curtails the FTC’s ability to seek consumer redress under section 13(b),” and that “rulemaking is a critical part of the FTC’s toolbox to stop widespread consumer harm and to promote robust competition.”

“I believe that we can and must use our rulemaking authority to deliver effective deterrence for the novel harms of the digital economy and persistent old scams alike.  Our rulemaking power under section 18 has gotten a bad reputation for being too hard to use, but longstanding FTC rules, such as the Funeral Rule and the Eyeglass Rule, have provided significant benefits to consumers,” said Acting Chairwoman Slaughter.  “It is also time for the Commission to activate its unfair methods of competition rulemaking authority in our increasingly concentrated economy, and I am excited for this new rulemaking group to explore all the possibilities.”

“Clear rules provide a roadmap for honest businesses to comply with the law and better protection for consumers and workers against bad actors.  They also lead to substantial market-wide deterrence due to significant civil penalties for rulebreakers,” the FTC said.

The FTC currently has dozens of active rules that protect consumers and promote competition in the markets every day.

Currently, rulemaking within the FTC is decentralized, with individual bureaus and divisions responsible for particular rules.  In recent decades, most rulemaking activity has been periodic review of existing rules.  The new structure will aid the planning, development, and execution of rulemaking – especially new rulemakings – in turn making the Commission’s work more efficient and potent.

Richard B. Newman is an FTC defense lawyer at Hinch Newman LLP. 

Informational purposes only. Not legal advice. May be considered attorney advertising.