Last week, President Obama announced his intention to nominate Jon Leibowitz for a second term as chairman of the Federal Trade Commission (FTC). The announcement likely signals a continuation of the rigorous consumer protection and antitrust enforcement that we have seen from the FTC under his leadership.
The FTC is an independent agency and, as such, operates differently than many other US agencies. It is headed by five commissioners who are nominated by the President and confirmed by the Senate to serve staggered seven year terms. No more than three sitting commissioners may belong to the same political party. The current Republican commissioners are William E. Kovacic and J. Thomas Rosch, whose terms expire on September 25th of 2011 and 2012, respectively, and the current Democrats are Edith Ramirez and Julie Brill, whose terms expire on September 25th of 2015 and 2016, respectively. Commissioner Leibowitz originally was appointed by former President George W. Bush in 2005 when a democratic seat became vacant. The President selects one commissioner to serve as chairman. The Chairman names the directors of the FTC's bureaus, including the Consumer Protective Bureau.
Since being appointed Chairman in 2009, Leibowitz has tackled a number of high profile consumer protection issues. For example, in the wake of the financial crisis, Leibowitz urged Congress to expand the FTC’s rulemaking and enforcement powers to more effectively target financial fraud. Though such legislation was never enacted, the FTC persisted in its consumer financial protection efforts by bringing dozens of lawsuits against debt relief and credit repair scams, issuing a rule prohibiting the use of advance fees and false claims by mortgage relief companies, and proposing a rule banning deceptive mortgage advertising.
Leibowitz has also led the FTC’s aggressive consumer privacy agenda. He has encouraged robust enforcement against companies that fail to protect consumers’ personal information, including treating the failure to maintain reasonable security as an “unfair” practice that violates the FTC Act. In addition, under his chairmanship, the agency has issued revised behavioral advertising self-regulatory principles, brought eight new actions against the use of harassing “robocalls,” and shut down a rogue ISP that helped distribute illegal spam and child pornography (this action temporarily decreased worldwide spam by thirty percent).
Going forward, we expect to see clearer and broader guidance with respect to behavioral advertising, where Leibowitz feels there is “still work to be done.” Likewise, although the Consumer Financial Protection Bureau now has primary regulatory authority over consumer financial products, the FTC will likely remain active in this area, as Leibowitz is determined to weed out corrupt foreclosure consultants, debt collectors, and payday lenders. He foresees the two agencies working collaboratively to meet these goals. Finally, we expect to see more high profile deceptive advertising cases, larger settlements, and an increased willingness by the FTC to take matters to court. All-in-all, expect a bumpy ride for companies who previously may have been able to stay under the radar. Leibowitz's consumer protection agenda is aggressive, ramped up, and, assuming no unexpected bumps in the process of extending his term, well on track.
- Amy Mudge and Anita Kalra