Enforcement Policy Shift at FTC Likely to Benefit Online Marketers

Maureen Ohlhausen, a Republican on the Federal Trade Commission, has been appointed interim chair of the FTC by President Trump. Ohlhausen succeeds FTC Chair Edith Ramirez, who was sworn in as a commissioner in 2010 and is resigning effective February 10, 2017.

Recently, amongst growing speculation, Ohlhausen provided some insight into the Commission’s consumer protection goals under the Trump Administration.

The Commission will continue to address unfair and deceptive practices, including those aimed at service members, financial and health issues, and the misuse of sensitive consumer information. However, while such areas will remain hot topics, Ohlhausen remarked that the FTC will seek to prioritize a core objective designed to avoid the stifling of legitimate consumer benefits.

Perhaps most interestingly, Ohlhausen has remarked about ensuring that regulatory enforcement actions address concrete consumer harm, including privacy-related matters. According to Ohlhausen, the FTC will dedicate resources to better inform businesses about their responsibilities while the Commission, itself, seeks a better understanding of the economics of privacy, and the interplay of access to consumer information and innovation.

In the past, Ohlhausen has often insisted that insufficient evidence existed to justify the initiation of enforcement proceedings. A policy shift that focuses more heavily upon proportional enforcement remedies tethered to actual consumer harm, rather than disgorgement of total revenues, would be roundly embraced.

Initial indications are that an objective assessment of the nature and quality of consumer harm will also be a more persuasive factor when the FTC considers whether to initiate an enforcement action, in the first place.

Ohlhausen has also suggested that the breadth of requests for information in conjunction with regulatory investigations will first weigh the need for data against the burden placed upon businesses. Another encouraging sign that the regulatory climate may be shifting.

As far as the search for a permanent chair, recent reports have suggested that President Trump is considering Joshua Wright, a former commissioner at the agency, as well as the current attorney general of Utah, Sean Reyes.

If tapped by President Trump, Reyes would be a popular pick for dietary supplement marketers. Not only is Utah is teeming with such companies, Sen. Orrin Hatch (R-Utah) played a significant role in drafting the 1994 Dietary Supplement Health and Education Act. If Reyes is chosen, efforts to raise the standard of the type of competent and reliable scientific evidence necessary to support efficacy claims could meet increased resistance.

The foregoing expected shifts in policy may very well result in a less aggressive FTC under President Trump and significant benefits to online marketers, including those that market dietary supplements.

It is anticipated that the consumer protection activities of state attorneys general will shift in reaction to potential changes in the federal enforcement agenda. For example, those that remained relatively quiet during the Obama Administration may now become increasingly active. Multi-state enforcement actions may soon be on the rise, including those pertaining to data and online privacy.

Contact an FTC and state attorney general defense lawyer if you would like to discuss the design and implementation of compliant advertising campaigns, or if you are the subject of a local, state or federal investigation or enforcement action.

HINCH NEWMAN LLP. ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result.

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