WASHINGTON, D.C.— U.S. Senator Maria Cantwell (D-WA), Chair of the Senate Committee on Commerce, Science, and Transportation, will convene a hearing titled, “Strengthening the Federal Trade Commission’s Authority to Protect Consumers,” at 10:00 a.m. on April 20, 2021. The hearing will address the Commission’s endangered consumer redress authority; the Commission’s efforts to fight fraud during the pandemic, including its new first-time civil penalty authority for COVID-related scams; and the Commission’s tools and capabilities in the information age, including $30.4 million in funding for consumer protection matters that Congress provided in the American Rescue Plan Act.
- The Honorable Rebecca Kelly Slaughter, Acting Chairwoman, Federal Trade Commission
- The Honorable Noah Phillips, Commissioner, Federal Trade Commission
- The Honorable Rohit Chopra, Commissioner, Federal Trade Commission
- The Honorable Christine Wilson, Commissioner, Federal Trade Commission
Tuesday, April 20, 2021
10:00 A.M. EDT
Full Committee (Hybrid)
This hearing will take place in the Russell Senate Office Building 253. Witness testimony, opening statements, and a live video of the hearing will be available on www.commerce.senate.gov.
In order to maintain physical distancing as advised by the Office of the Attending Physician, seating for credentialed press will be limited throughout the course of the hearing. Due to current limited access to the Capitol complex, the general public is encouraged to view this hearing via the live stream.
Chair Maria Cantwell
U.S. Senator Maria Cantwell
Opening Statement at Senate Commerce Committee Hearing entitled, “Strengthening the Federal Trade Commission’s Authority to Protect Consumers.”
Witnesses: The Honorable Rebecca Kelly Slaughter, Acting Chairwoman, Federal Trade Commission,
The Honorable Noah Phillips, Commissioner, Federal Trade Commission,
The Honorable Rohit Chopra, Commissioner, Federal Trade Commission,
The Honorable Christine Wilson, Commissioner, Federal Trade Commission
April 20, 2021
Cantwell: The Senate Committee on Commerce, Science and Transportation will come to order. We are here this morning to have our first hearing of this 117th Congress with the Federal Trade Commission. So, I welcome the acting Chairwoman and Commissioners for this very first hearing. I'd like to begin with a discussion of a report released yesterday by the FTC. The report shines a spotlight on COVID-related fraud and scams preying on American consumers and their families during the pandemic. These bad actors are kicking consumers when they are already down; peddling fake COVID cures, trolling for personal data in order to commit identity theft, and selling counterfeit PPP to first responders. The FTC report shows a 45% increase in the number of consumer complaints filed for 2020 over 2019. This matches the increase in consumer complaints filed with the Washington Attorney General's office during the height of the pandemic.
That's why we're here today, to strengthen the Commission's ability to fight for consumers. Unfortunately, the FTC’s long standing authority to return money to victims is endangered now at the Supreme Court. This authority, the so called “13B authority” is the bread and butter of the FTC’s consumer protection mission. For more than 40 years, 13B has been used by the FTC to return funds illegally taken from consumers. The FTC has returned hundreds of millions of dollars to Americans injured by unlawful business practices. For instance, in 2019 The FTC returned $34 million to consumers in a settlement with the Office Depot organization which ran bogus virus scans on consumers computers and used false results to persuade consumers to pay more for repairs. Because of 13B, relief to consumers included more than $3.7 million to 58,000, residents of Texas, more than $800,000 to 12,000 residents from Tennessee and more than $1.2 million to about 20,000 Washington consumers.
Similarly in 2019, a settlement against the University of Phoenix, the FTC secured over $40 million in cash to over 146,000 U.S. students, as well as student debt cancellation. The University of Phoenix attracted students with a false claim of job opportunities, including ads that had targeted military and Hispanic consumers. The FTC returned more than $1.1 million to around 3,500 consumers in Tennessee and 3,000 consumers in Washington. These cases just demonstrate the need to maintain the long standing FTC authority, and the COVID pandemic has intensified, I believe, the need for that consumer protection. Since the beginning of the pandemic, the country has been besieged by scams and deception. For example, last April, the FTC sent a warning letter to a health clinic in Olympia, Washington, that was making unproven claims that it could treat COVID-19 with just a high dose of vitamin injections. The Seattle microbiologist marketed and sold unauthorized Corona vaccines to consumers for up to $1,000 each. The FTC sent him a warning letter and he was later sued by our state's attorney general. So all of these scams along with one that was perpetrated about making the moniker of an N95 mask when it really didn't meet that standard, all of these things are why we want to make sure that the FTC has appropriate authority. The Commission filed a complaint last week, which used their new authority that we just gave them against another alleged seller of a sham COVID cure. So, we very much appreciate that you're using the new authority and working.
We need honest businesses, many of them small businesses, should not have to compete with businesses who are using these unfair tactics. So it's not only good for consumers, it's also good for our economy, and other businesses that are playing by the rules. So, I know that today we'll hear much more about this, but we have to do everything we can to protect this authority, and if necessary, pass new legislation to do so. So thank you all for being here. I'll introduce you in a minute, but now I'm turning to my colleague for his comments.
Thank you Senator Wicker. Thank you for that comprehensive statement. I certainly appreciate you mentioning those issues that I definitely inclined to query the Commission today on data security rules because I agree there's more that needs to be done there. I hope that we will have a hearing in May on this issue of market dominance on the news because clearly there's so many issues there that both the DOJ and the FTC should be looking into. Ee've just been looking for the right time for us to get necessary work out the door so we can turn to that focus, but clearly we produced a report on some of this last year about their tech companies market dominance as it relates to media, so definitely very concerned about that. And just thank you for your leadership on it, I certainly appreciate the work that you and your team and others, Senator Booker and Blumenthal, everybody's been doing on such an important issue. So you're right, it's a good chance to also ask them about that. So, I don't think in an information age there's a shortage of issues that the FTC should be more aggressively involved in. So, we're glad you're here. Let me introduce the Honorable Rebecca Slaughter, who is the acting Chair of the Federal Trade Commission, the Honorable Noah Philips, a member of the FTC, the Honorable Rohit Chopra, who is with us as Commissioner of the FTC and remotely, the Honorable Christine Wilson. Welcome to you all again we're glad you're here. Thank you for your ongoing work and Madam Chair, we'll start with you.
Ranking Member Roger Wicker
Thank you, Madam Chair, and indeed this is a distinguished panel of witnesses. It’s always good to hear from them, and I am glad to have you back before our committee. I look forward to your testimonies.
For over 100 years, the FTC has been the chief consumer protection agency in the United States. Its mission, stated plainly in the FTC Act, is to protect consumers from unfair or deceptive acts or practices in the marketplace, such as deceptive advertising, harmful technology, illegal robocalls, and scams. It also includes protecting consumers from businesses that misuse their personal data or attempt to process their data in discriminatory ways.
As the distinguished Chair has already said, unfortunately, the COVID-19 pandemic has created new avenues for scammers and cybercriminals to take advantage of consumers. The unprecedented nature of the virus has opened the door to scams related to fake cures and vaccines, as well as fake virus tests. Most recently, the pandemic has created a market for counterfeit vaccination cards purportedly from the CDC. This adds to a long list of frauds, scams, and bad business practices the FTC is continually working to address.
To combat fraud and protect consumers from unfair or deceptive practices in the marketplace, the FTC has historically relied upon its assumed authorities under Section 13(b) of the FTC Act. This has enabled the FTC to stop illegal activity or require scammers to give money back to those who have been defrauded. Last Congress, in anticipation of the Supreme Court’s plans to address challenges to the scope of the FTC’s authority under 13(b), I included a provision in my proposed data privacy bill, the SAFE DATA Act, that would clarify the Commission’s authority under the law to stop fraudulent activities and obtain monetary redress for consumers.
This morning, I look forward to examining how Congress can further clarify the statute to empower the FTC not only to enjoin improper behavior, but also to compensate victims for their losses. I also look forward to discussing how to ensure the proper assessment of monetary remedies and that legitimate businesses are given fair notice about practices the FTC may deem to be unfair as it expands its use of 13(b) to stop wrongdoing.
The pandemic has further underscored the need for strong, uniform data privacy legislation. Over the past year, our normal activities of work, school, and visiting with family moved online to prevent further spread of the coronavirus. However, without no national data privacy law in place, continued virtual interactions could purpose serious and negative risks for exposure – and potential exploitation – of the personal data of millions of Americans.
I am sure Commissioners will want to discuss what the FTC has been doing during the pandemic to protect the privacy and security of personal data and what additional tools the agency needs to safeguard consumers’ information from misuse.
The FTC also plays an essential role in overseeing and preventing unfair methods of competition in the marketplace. Although the Commission’s work on competition is not within the jurisdiction of this Committee, it does impact consumer welfare and informs how companies may attempt to defraud, mislead, or discriminate against consumers in the marketplace.
In this regard, Big Tech’s dominance is of particular concern. This dominance has led to an abuse of their market power in the form of censorship and content suppression, as well as the abuse of consumers’ data in the form of repeated privacy violations and data misuse. As Justice Thomas opined two weeks ago, we now have a society in which a few Silicon Valley CEOs decide what films you can stream, which books you can buy, and what scientific discourse is allowed in public.
Today’s hearing is an opportunity to discuss what more the FTC can do to address these matters in furtherance of its consumer protection mission.
Finally, this committee has been working to develop bipartisan legislation to establish a national framework permitting college athletes to be compensated for the use of their name, image, or likeness (NIL). As this work continues, it is clear that the FTC’s expertise in protecting consumers will be a necessary asset in ensuring compliance with any NIL law and guarding student athletes and their families from exploitation.
I hope Commissioners will discuss what additional tools, resources, and personnel expertise the FTC would need if takes on this important work and oversees this collegiate sports marketplace as part of its consumer protection mission.
Clearly there is much to discuss today. I thank the Commissioners their testimonies, and I thank the Commissioners for their Bipartisan work. I look forward to an informative discussion.
At this point, Madam Chair, I would mention that you and I received a letter dated this morning from Mr. Neal L. Bradley, on behalf the Chamber of Commerce. He is the Executive Vice President and Chief Policy Officer, consisting of three pages and addressing issues of importance with regard to the bill of trade commission and their interpretation of section 19 of the act and section 13(b) of the act. And I would ask that that letter be added to the record at this point.
Witness Panel 1
FTC Commissioners, Combined TestimonyCommissionersFederal Trade Commission