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Fireside Chat with FTC Acting Bureau of Consumer Protection Director, Tom Pahl

On June 29, 2017, the ABA Section of Antitrust Law, Economics Committee hosted a Fireside Chat with FTC Acting Bureau of Consumer Protection Director, Tom Pahl.  The program offered an insightful behind the scenes view of the Bureau’s priorities now and in the future.  

After describing his vast experience in consumer protection law, Mr. Pahl highlighted the Consumer Protection Bureau’s priorities. The Acting Director affirmed that the FTC remains committed to be the leading consumer protection agency in the United States on privacy and data security issues. With respect to privacy enforcement, the FTC will be focused on companies that fail to honor their privacy representations or fail to use and treat sensitive information properly. In addition, the FTC will continue to take steps to support the EU Privacy Shield framework.  

In terms of national advertising, the FTC will prioritize cases that it considers fraud or “quasi-fraud” matters. These include deceptive weight loss and dietary supplement advertising. In addition, the FTC will focus on health and safety issues (such as products targeted to address the opioid crisis), as well as goods and services marketed to certain populations, including the military and veterans, rural area residents, and the elderly.

In the financial market, the FTC intends to focus on fraud issues and services not under the CFPB’s jurisdiction, such as auto dealers and services covered by the Credit Repair Organization Act. FINTECH products and services will also be a high priority. 

Consistent with Acting Chairman Maureen K. Ohlhausen’s regulatory reform initiative, we should expect to see an increased focus on concrete harm and conduct that is likely to cause that harm, as well as an increased focus on express claims. In terms of examining the level of substantiation required, the FTC intends to have a more rigorous and consistent application of the Pfizer standards: i.e., the type of product, the type of claim, the benefit of a truthful claim, the ease of developing substantiation for the claim, the consequences of a false claim, and the amount of substantiation experts in the field would consider reasonable.

Finally, we should expect reform in connection with the Civil Investigative Demand process to be less burdensome, less expensive and more streamlined. In terms of resolving matters, the FTC intends to look at the efficient use of resources when looking at assets that may be more difficult to obtain.  

Takeaway: Unlike other agencies whose roles the Trump administration is looking at dramatically scaling back, the FTC appears to be poised to continue its law enforcement mission, particularly in the context of fraud and quasi-fraud claims.  Even if there may be a decrease in enforcement on certain types of claims, marketers should keep in mind their substantiation and other compliance obligations and expect that the FTC will continue to act on false and unsubstantiated advertising claims.