Study and Report: Best Practices, Quantifiable Metrics, and Legislative Recommendations
The Act requires the FTC to conduct “a study on facilitating and refining existing efforts with State Attorneys General to prevent, publicize, and penalize frauds and scams being perpetrated on individuals in the United States.” This study must be completed not later than one year after the date of enactment of the Act, which puts the deadline in October 2023. The Act further outlines specific requirements of the study, including examining “the roles and responsibilities of the Commission and State Attorneys General that best advance collaboration and consumer protection” along with how policies can “facilitate cooperation and communications across the Commission” and how to best allocate resources and create “accountability.” In doing so, the FTC must consult with the National Association of [State] Attorneys General (NAAG), along with consumer protection organizations and the private sector, and provide opportunity for comment. The FTC must follow the study with a report including “best practices,” “quantifiable metrics,” and “legislative recommendations.”
First of all, communication is key and should be a focus of the FTC Collaboration Act study. As evidenced by the multitude of collaborative efforts between the FTC and AGs, communication has generally been easy and frequent throughout the years, but can always be improved. It would be beneficial if the FTC selected a specific person(s) to act as a liaison with the AGs. AG staff communicates with FTC staff often, but having a liaison should cut down on both a lack of clarity as to who should be contacted and inconsistent information which inherently occurs when communicating with different people. This already occurs on the competition side for the FTC, as there is a liaison for state AGs. Because the 56 AGs are all sovereigns with different resources and laws, proposing a similar “AG liaison” from the states is likely untenable. As noted in this series, AGs are seldom perfectly aligned, hence why a central organization such as NAAG or the Attorney General Alliance is so critical. In addition to a specific FTC liaison with the states, a centralized email address or portal to receive notices from the states would be beneficial.
The FTC could perform a comprehensive review of the FTC and AG joint educational initiatives - see part one of this series for some historical details. It would be helpful to show the extent to which this collaboration occurs by including statistics about the types and number of initiatives, the audience, and possibly contain granular details such as listing each time an FTC representative spoke at an AG event and vice versa, the events hosted together, and more. The report should support the continuation of these initiatives, possibly suggesting that even more resources be committed, as education for consumers and businesses is key in ensuring a fair marketplace.
AGs and the FTC have often worked together on consumer enforcement matters. AGs have the authority to bring cases using some of the same federal laws in which the FTC has jurisdiction, and at a minimum, have enforcement authority over similar activities even when not using the same law(s). The FTC should also study the number of investigations (if public), lawsuits, and settlements joined by both the FTC and AGs, or coordinated jointly. This study should include the benefits and drawbacks to businesses and consumers when the FTC and AGs work together. In addition, a well-informed enforcement community is helpful to businesses and consumers. Therefore, part of the study should include whether there is value in a training program for AGs and the FTC on the enforcement of laws where jurisdiction overlaps.
As for legislative recommendations, as previously mentioned, AGs have the authority to bring consumer protection actions pursuant to certain federal laws. However, there is a lack of consistency and specificity in those laws when it comes to describing AG authority and how they must provide notice to the FTC when enforcing those laws. The report can include a recommendation to remedy inconsistencies when possible and create awareness of the issue so it is considered when future legislation is being drafted. As stated above, an official FTC liaison with the AGs is recommended and may be helpful in these efforts.
The aforementioned recommendations about the study and report are made under the premise that a level playing field with efficient enforcement is in everyone’s interest. Based on our experience, implementing these recommendations will be helpful in the quest to ensure a fair marketplace for both businesses and consumers.
As we have come to the end of our three-part series, the FTC is seeking public comments on the Act which are due August 14, 2023, and the study and report are just around the corner. The FTC and AGs have historically had a good relationship, working together through the years on both educational initiatives and enforcement efforts. As noted, we believe collaboration can benefit enforcers and businesses alike. But the Act was enacted at a polarizing political time, which will likely affect the study/report, and may affect how the FTC and AGs work together in the future. As was stated earlier, collaboration will depend on the leadership of the FTC and the particular AGs in question. How leadership priorities will affect FTC/AG collaboration seems to be a very fluid question, and the next year or two will be telling.