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Leadership Changes at the FTC and the New Consumer Protection Agenda

A more flexible "reasonable basis" standard when evaluating ad claim substantiation

The Federal Trade Commission works with the U.S. Justice Department to enforce antitrust law and investigates companies accused of deceptive advertising.

Four new commissioners have been sworn in at the FTC. This is the first time that the agency has had five commissioners since Josh Wright, a Republican, stepped down in mid-2015.

Joining Maureen Ohlhausen are Republicans Noah Phillips and Chairman Joseph Simons, and Democrats Rebecca Slaughter and Rohit Chopra. Republican Christine Wilson will ultimately fill the position held by FTC Acting Chairman Maureen Ohlhausen.

With the exception of Rohit Chopra, the new commissioners’ have traditionally focused upon antitrust law. Which begs the question – what will the new consumer protection agenda be moving ahead?

A careful evaluation of comments made by the nominees during the confirmation process suggests that a more flexible claim substantiation standard may take shape. In fact, recent substantiation standards requiring two well-controlled clinical studies have been roundly criticized as arbitrary and effectively denying consumers of critical information. While randomly controlled clinical trials may constitute reliable support for advertising claims, they may not necessarily be required.

In terms of consumer finance issues, Mr. Chopra is expected to take a leading role on matters such as credit reporting, debt collection, privacy and data use. Enforcement by the Consumer Financial Protection Bureau is likely to continue to decrease.   Thus, it is reasonable to anticipate that the FTC shall take a more active role.

It is also anticipated that the FTC: (i) will continue to initiate more enforcement actions related to fraud while bringing fewer actions involving allegedly deceptive advertising claims; and (ii) will seek to ensure monetary settlements are tied to identifiable, concrete consumer harm.

Contact the author at rnewman@hinchnewman.com or on LinkedIn at FTC Compliance Lawyer to discuss the potential impact of leadership changes at the Federal Trade Commission.

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. Hinch Newman LLP | 40 Wall St., 35thFloor, New York, NY 10005 | (212) 756-8777

 

 

 

 

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Richard B. Newman

Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

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