House Commerce to Mark Up Controversial FTC Legislation Opposed by Consumer Coalition

The FTC Process and Transparency Reform Act (HR-5510) is expected to be much of the focus of the 2 p.m. hearing. FTC Chairwoman Edith Ramirez criticized some elements of the bill during a May hearing (see 1605230033 and 1606230054), as did some Democratic members. But "measured alterations" have been made to HR-5510 to address "various specific concerns" from Democrats, said Rep. Michael Burgess, R-Texas, who sponsored the legislation and chairs the House Commerce Subcommittee on Commerce, Manufacturing and Trade. The committee provided his prepared remarks as part of members' opening statements Tuesday of the two-day markup.

"When economic analysis is done, we should bring it forward into the light of day," said Burgess, who wasn't present at the Tuesday hearing. "The FTC can still make recommendations; they just have to share their work. If no economic analysis has been done, then say so." He said the bill doesn't change the unfairness standard but codifies it and asks the commission to provide more reporting to Congress "to exercise good oversight." The FTC didn't comment.

However, Rep. Frank Pallone, D-N.J., the full committee's ranking member, denounced the FTC bill during Tuesday's hearing. He said the bill would “dismantle” the commission and undermine its enforcement ability. It’s “frankly, a waste of time,” he said. Rep. Anna Eshoo, D-Calif., echoed his concerns, saying it would “gut” the agency.

The commission is doing a “fine job,” but there’s room for improvement in the century-old agency, Internet Association General Counsel Abigail Slater told us Tuesday. She testified before a House Commerce subcommittee in May on the FTC bills. Slater, a former longtime FTC staff attorney and adviser to then-Commissioner Julie Brill, said one provision -- which should be noncontroversial and likely agreeable to the FTC -- would allow commissioners to meet informally, caucus and deliberate on issues in a nonpublic environment, which they can't do now. She acknowledged that other provisions, including one that would reduce 20-year consent orders to eight years and the economic analysis requirement, are more controversial. Some of the criticism is fair, she said, but the Internet Association favors both provisions in the bill.

Susan Grant, Consumer Federation of America's consumer protection director, emailed Monday that she hoped "that lawmakers would see weakening the FTC's enforcement ability as a disservice to consumers and law abiding businesses."

In a June 21 letter to House Commerce Chairman Fred Upton, R-Mich., and Pallone, a coalition of 32 civil liberties, consumer protection and privacy groups, including CFA, said several proposed changes would hamper the commission's ability to "crack down on scam artists and protect consumers from unfair, misleading, or anticompetitive business practices." The letter was resent to the committee Monday. The coalition said if companies, which are targets of investigations, are allowed to provide evidence that they complied with any FTC guidelines or general statements as a "good-faith effort" to obey the law, it would undermine the commission's enforcement capabilities -- possibly forcing it to rescind issued guidance or stop it from publishing new guidelines.

The coalition also said legislation would: "constrain and rigidify" FTC authority to find an act or practice unfair; undercut flexibility in conducting investigations if such probes are required to be terminated after six months unless certain actions are taken; and weaken the agency's ability to prevent repeat offenses if consent decrees are reduced from 20 years to eight years. The Center for Democracy and Technology, Consumer Union, Public Citizen and U.S. Public Interest Research Group also signed the letter.

Several other bills got more support from both sides of aisle, including the Consumer Review Fairness Act (HR-5111), which would bar companies from including clauses in their terms of service that would prevent consumers from posting critical online reviews. Slater said her organization, which includes Amazon, TripAdvisor and Yelp, strongly supported this bill. The internet has empowered consumers with information that “has led to more frictionless transactions, lower prices, higher quality goods and services, more choice to consumers,” she said. Since a companion bill “sailed through the Senate,” she said she hoped it would be approved by Congress and signed into law this session. Pallone and Eshoo also said they supported the bill.

The committee also will review the Better On-line Ticket Sales Act (HR-5104), which would prevent use of software that buys large amounts of event tickets and resells them at higher prices. Rep. Paul Tonko, D-N.Y., said Tuesday during opening statements that the Bots Act would hold "shady ticket brokers accountable for their actions" and establish civil penalties on a national level that would be enforced by the FTC or a state attorney general's office. Another bill called the Amateur Radio Parity Act (HR-1301), which was approved by the House Communications Subcommittee in February (see 1602110050), would require the FCC to adopt new rules to ensure that amateur radio operators could use their equipment in deed-restricted communities.