WASHINGTON – U.S. Sen. Jerry Moran (R-Kan.), chairman of the Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security, will convene a hearing titled “FTC Stakeholder Perspectives: Reform Proposals to Improve Fairness, Innovation, and Consumer Welfare” at 2:30 p.m. on Tuesday, September 26, 2017. The subcommittee will explore recommendations by stakeholders and former Commission officials for improving the FTC’s handling of consumer protection cases and general process reforms.
- Mr. William MacLeod, Partner, Kelley Drye
- Ms. Lydia Parnes, Partner, Wilson Sonsini Goodrich & Rosati
- Ms. Jessica Rich, Vice President, Policy and Mobilization, Consumer Reports
- Mr. Berin Szoka, President, TechFreedom
Tuesday, September 26, 2017
Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security
This hearing will take place in Russell Senate Office Building, Room 253. Witness testimony, opening statements, and a live video of the hearing will be available on www.commerce.senate.gov.
Chairman Jerry Moran
Good afternoon, and welcome to today’s hearing on “FTC Stakeholder Perspectives: Reform Proposals to Improve Fairness, Innovation, and Consumer Welfare.”
Last September, the full Committee heard testimony from the FTC’s three sitting commissioners at the time: Chairman Ramirez, Commissioner Ohlhausen and Commissioner McSweeny. We had planned to convene a Subcommittee hearing on the same day, but had to cancel it due to scheduling conflicts. The cancelled hearing would have consisted of a panel of stakeholders offering their own perspectives about the Commission.
Today we will hear from Berin Szoka, President of TechFreedom, one of the witnesses who was scheduled to testify last September, as well as three former directors of the FTC’s Bureau of Consumer Protection: William MacLeod, Lydia Parnes and Jessica Rich. We thank these former FTC officials for their public service and all of the witnesses for appearing today to offer their insights on how to improve the commission.
For over a century, the FTC has been protecting competition and consumers by enforcing the nation’s antitrust laws and combatting deception and unfairness in a wide variety of industries. Through its efforts, the FTC has often helped to prevent anticompetitive practices that stifle innovation, lower quality or raise prices. It has also helped ensure that consumers can make informed choices based on accurate advertising, and avoid injury from fraud and unfair trade practices, such as unauthorized credit card charges.
Although the FTC’s efforts have produced many benefits for consumers and the economy, this committee and others have questioned the way it sometimes exercises its authority under Section 5 of the FTC Act, which addresses unfair and deceptive acts in commerce. Others have argued that the FTC sometimes conducts investigations and issues orders that impose unnecessary costs, and that it does not always provide adequate guidance to businesses seeking to comply with the laws the FTC enforces.
These concerns have sparked numerous proposals regarding how to reform the FTC. For example, last December the House Energy and Commerce Committee favorably reported H.R. 5510, the FTC Process and Transparency Reform Act of 2016, legislation incorporating eight separate reform bills designed to clarify the FTC’s unfairness authority, improve the way the FTC operates, foster greater transparency and reduce unnecessary costs.
Similarly, in January 2017, the American Bar Association Antitrust Section issued its 60-page Presidential Transition Report. It makes a number of recommendations for improving the FTC’s handling of antitrust and consumer protection issues, including repeal of the common carrier exemption and better coordination on privacy between the FTC and other agencies, greater transparency and fairness in the enforcement process, more judicious use of civil investigative demands, better communication with investigation targets, less burdensome “boilerplate” order provisions and monetary relief proportional to the injury caused and the defendant’s culpability.
The report also urges the FTC to provide additional guidance on topics relating to unfair practices, data security, monetary remedies, advertising interpretation and “clear and conspicuous” disclosure requirements. Other private groups, such as TechFreedom, have also proposed various reforms designed to address concerns about the FTC.
The FTC has already taken steps to address some of the concerns addressed by the House bill, the ABA Report, and other stakeholders. Specifically, this year the commission adopted several initiatives to eliminate waste and unnecessary regulation, streamline agency information demands, improve transparency and promote economic liberty.
As we look ahead to the White House’s nominations of candidates to serve as FTC commissioners, it is especially important for this committee to provide a forum to address these issues.
We look forward to hearing the testimony of our witnesses this afternoon and to engaging in a dialog on the best ways to advance reforms at the commission.
With that, I will turn to the Ranking Member, Senator Blumenthal, for his opening statement.
Witness Panel 1
Mr. Berin SzokaPresidentTechFreedom
Mr. William MacLeodPartnerKelley Drye
Ms. Lydia ParnesPartnerWilson Sonsini Goodrich & Rosati
Ms. Jessica RichVice President of Policy and MobilizationConsumer Reports