Federal Trade Commission
On September 26, 1914, the Federal Trade Commission was formed with the passage of the Federal Trade Commission Act. In varies sectors of the economy, the Federal Trade Commission is the only federal agency with dual jurisdiction over consumer protection and competition. The Federal Trade Commission’s central location is at 600 Pennsylvania Avenue, N.W. Washington, D.C. 20580. The Federal Trade Commission is comprised of the Bureaus of Competition, Consumer Protection, and Economics, eleven official offices, including the Office of General Counsel and Office of Administrative Law Judges, and eight physical regional offices located across the United States. The Federal Trade Commission’s mission is to “protec[t] the public from deceptive or unfair business practices and from unfair methods of competition through law enforcement, advocacy, research, and education.”
Nominated by the President of the United States and confirmed by the United States Senate, the Federal Trade Commission is statutorily comprised of five Commissioners, who serve a seven-year term. The President of the United States selects the Chair of the Commission. The current members of the Federal Trade Commission are Chairperson Lina M. Khan, Commissioner Rebecca Kelly Slaughter and Commissioner Alvaro Bedoya.
II. Enforcement of Consumer Protection Matters
U.S. Department of Justice
Located within the Civil Division of the U.S. Department of Justice, the Consumer Protection Branch is led by Assistant Attorney General Arun G. Rao. The Consumer Protection Branch enforces laws aimed at protecting consumer identity and health and securing the United States economy through criminal and civil enforcement actions. The Consumer Protection Branch enforces the Consumer Product Safety Act, the Controlled Substances Act, the Class Action Fairness Act, and the Food, Drug, and Cosmetic Act among many other statues. Thus, the Consumer Protection Branch focuses on “class action fairness act litigation,” “complex consumer fraud,” “consumer product safety and tampering, deceptive practices,” “telemarketing, and data privacy, food and dietary supplements,” “prescription drugs and medical devices,” “tobacco product litigation,” and “U.S. servicemembers and veterans fraud.”
Federal Trade Commission
The Federal Trade Commission has enforcement authority over more than eighty different federal laws, including the Federal Trade Commission Act, and the Clayton Act. When it comes to enforcement of consumer protection laws, the Federal Trade Commission may initiate an investigation based on written articles, reports by consumers, or premerger notification filings. The investigation is kept confidential to protect the integrity of the investigation. After the investigation, if the Federal Trade Commission believes there is a violation of the law, the Federal Trade Commission may seek voluntary compliance from the person or company under investigation through a consent order. If the person or company under investigation signs the consent order, the person or company does not have to expressly acknowledge a violation of the law in the written consent order; however, the person or company under investigation must agree to halt the disputed conduct or to undertake remedial actions concerning the disputed conduct alleged in the accompanying complaint with the consent order. The Federal Trade Commission may seek civil penalties or an injunction upon a violation of a consent order. Alternatively, if the Federal Trade Commission and the person or company under investigation fail to reach a settlement, the Federal Trade Commission may decide to file a formal administrative complaint, which would be heard before an administrative law judge. The decision of an administrative law judge is appealable to the Federal Trade Commission, and the final decision of the Federal Trade Commission is appealable to the U.S. Court of Appeals and then to the U.S. Supreme Court.
III. Collaboration Between the U.S. Department of Justice & the Federal Trade Commission
Although the U.S. Department of Justice and the Federal Trade Commission have shared legal authority to enforce the same statutes, such as the Clayton Act, and similar enforcement areas of interest, such as consumer protection and antitrust law, the functionality of the U.S. Department of Justice and the Federal Trade Commission is rooted in mutually beneficial collaboration. The Consumer Protection Branch of the U.S. Department of Justice recognizes the Federal Trade Commission as an official agency partner. In furtherance of the partnership, the Consumer Protection Branch enforces the Federal Trade Commission’s settlement orders. In United States v. Facebook, Inc., the Consumer Protection Branch filed a 2019 complaint in the U.S. District Court for the District of Columbia against Facebook, Inc., which alleged Facebook, Inc. misled consumers about how Facebook, Inc. used and protected personal information; therefore, Facebook, Inc. violated the Federal Trade Commission Act. Additionally, the United States alleged that Facebook, Inc. violated a 2012 Federal Trade Commission Order. Judge Timothy Kelly “granted the United States’ motion,” which contained “a stipulated order against Facebook, Inc.,” on April 23, 2020. In addition to ordering that Facebook, Inc. undertake privacy assessments for all its businesses and establish an “independent assessor” and a “privacy committee” to supervise the alignment of the company’s activities and functions with the amended 2012 Federal Trade Commission Order, the stipulated order called for Facebook, Inc. to pay a $5,000,000,000 civil penalty. On April 29, 2020, the $5,000,000,000 civil penalty was paid by Facebook, Inc. Also, the Federal Trade Commission may inform the U.S. Department of Justice of evidence concerning criminal conduct because, as between the two agencies, “only the [U.S. Department of Justice] can obtain criminal sanctions.” In United States v. Lovisa, the Consumer Protection Branch carried out the successful prosecution of Tully Lovisa, who, “in violation of court orders that resulted from a lawsuit” commenced by the Federal Trade Commission against him, “operated a prize-promotion mailing scheme.” The scheme worked by defrauding, mostly elderly, victims through the distribution of “prize-promotion mailings” that misled victims into thinking that a “large cash” reward could be won by sending a nominal fee. Victims did not collect a cash reward, and the total value of the scheme “exceeded $30 million.” As a result of prosecution, Mr. Lovisa “ple[d] guilty to conspiracy to commit mail fraud” in 2018. Furthermore, a court ordered Mr. Lovisa to sell his house and forfeit the profits of the sale to the Federal Trade Commission to resolve the lawsuit commenced by the Federal Trade Commission. In September of 2012, Mr. Lovisa faked the sale of the house and informed the Federal Trade Commission the sale was worth $155,500. Later in April of 2015, Mr. Lovisa sold the house for a total of $540,000, and he failed to notify the Federal Trade Commission of the actual sale of the house. Consequently, Mr. Lovisa also “ple[d] guilty to wire fraud in connection with a related scheme to defraud the [Federal Trade Commission]” in 2018. In 2018, each offense for which Mr. Lovisa pled guilty carried a maximum penalty of twenty years of incarceration.
