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Home | BakerHostetler

Randal Shaheen Quoted in National Law Journal on FTC’s Regulatory Approach

Peter Roskam Comments on Political Climate in National Law Journal

ADventures in Law

Dark Patterns Go International: FTC and International Consumer Protection Networks Conduct Sweep of ‘Deceptive Design Practices’ Related to Subscription Services, Privacy

Jeff Paravano, Michelle Hervey, Nick Mowbray Speak to Tax Club of Cleveland

We love two-parters. Who shot J.R.? Who shot Montgomery Burns? Well, perhaps this one won’t be quite as much fun – but checking in on FTC rulemakings also warrants the two-parter treatment. For the past few months, we have seen a steady stream of announcements coming on all sorts of pending rulemakings, and it has been a bit exhausting keeping up with the activity. And we anticipate that this pace will continue, so now is a good time to level-set and see the current status. That’s what we are here for – a quick and neat summary of what you need to know and where things stand.

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Part one focuses on the pending Mag-Moss rulemakings and part two will focus on the other rulemakings. Mag-Moss rulemaking is an <a href="https://www.adventures-in-law.com/blogs/you-do-have-time-for-this-the-new-wave-of-ftc-rulemaking/">FTC-specific type of rulemaking</a> that allows<a> </a>the FTC to issue rules regarding practices that are deceptive or unfair and prevalent in the marketplace. Most of the new rulemakings that we are seeing are this type of rulemaking. Part two will focus on the rest, particularly rulemakings where the FTC is engaged in rulemaking pursuant to a specific statute, such as the Children’s Online Privacy Protection Act.

With that, this is where things stand on the Mag-Moss rulemakings as of early February 2024:

Commercial Surveillance – Things remain very quiet on this one, but we anticipate some activity in the near future. The agency made quite a splash in August 2022 when it <a href="https://www.ftc.gov/news-events/news/press-releases/2022/08/ftc-explores-rules-cracking-down-commercial-surveillance-lax-data-security-practices">kicked off this rulemaking</a> focused on a wide range of data practices. But other than a small forum that was held in September 2022, it has been radio silence, which is a bit odd for such a high priority.

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Government Impersonation – A proposed rule was issued in September 2022 that would purportedly “fight government and business impersonation scams.” An informal hearing was held in May 2023 after the Commission found that there were no disputed questions of fact. All has been quiet since that time, but we anticipate a final rule issuing this year.

Earnings – This is yet another rulemaking where things have been eerily quiet. The rulemaking <a href="https://www.ftc.gov/news-events/news/press-releases/2022/02/ftc-takes-action-combat-bogus-money-making-claims-used-lure-people-dead-end-debt-traps">kicked off two years ago</a>, and we have heard nothing since. The next step would be for the agency to issue a proposed rule, and perhaps we can look forward to that in 2024.

Negative Options – Unlike with the rules above, there has been quite a lot of activity here lately. The agency issued a <a href="https://www.ftc.gov/news-events/news/press-releases/2023/03/federal-trade-commission-proposes-rule-provision-making-it-easier-consumers-click-cancel-recurring">proposed rule in March 2023</a> that would further proscribe subscription practices, and many comments were filed. In response to those comments, the FTC decreed that there were no disputed questions of fact, but it allowed a few parties to participate in a January 2024 <a href="https://www.ftc.gov/news-events/events/2024/01/informal-hearing-proposed-amendments-negative-option-rule-january-16-2024">virtual informal hearing</a>. There has been a lot of pushback on this finding of no disputed questions of fact, and the hearings continue.

Junk Fees –To quite a lot of fanfare, in October 2023, the FTC <a href="https://www.ftc.gov/news-events/news/press-releases/2023/10/ftc-proposes-rule-ban-junk-fees">proposed a junk fees rule</a> that it stated would prohibit “hidden and bogus fees that can harm consumers and undercut honest businesses.” There has been a great deal of discussion about this proposal, and its <a href="https://www.ftc.gov/news-events/news/press-releases/2023/12/federal-trade-commission-extends-public-comment-period-proposed-rule-prohibiting-junk-fees-30-days">comment period</a> ends this very week. Stay tuned for more on this one, since it is a high priority for the FTC and much of the federal government.

Reviews and Endorsements – A rule has also been proposed here. The <a href="https://www.ftc.gov/news-events/news/press-releases/2023/06/federal-trade-commission-announces-proposed-rule-banning-fake-reviews-testimonials">rule was announced</a> in June 2023 and focused on how reviews are collected, displayed and sometimes suppressed. <a href="https://www.federalregister.gov/documents/2024/01/16/2024-00678/rule-on-the-use-of-consumer-reviews-and-testimonials">An informal hearing will occur on Feb. 13</a>, and interestingly, as explained by our great partner Randy Shaheen, the FTC <a href="https://www.adventures-in-law.com/blogs/comments-hijack-review-hijacking-provision-of-proposed-rule-on-reviews/">jettisoned a provision of the proposed rule</a> on review hijacking, perhaps to avoid having a disputed issue of material fact.

Funeral Rule – The Funeral Rule has been around for quite a long time, and the FTC hosted a <a href="https://www.ftc.gov/news-events/events/2023/09/shopping-funeral-services">September 2023 workshop</a> to consider whether to modify the rule to address things such as whether and how funeral providers should be required to display or distribute their price information online and through other electronic means. All has been quiet since the workshop.

Business Opportunity – After the issuance of an <a href="https://www.ftc.gov/news-events/news/press-releases/2022/11/ftc-explores-changes-possible-expansion-its-business-opportunity-rule">Advance Notice of Proposed Rulemaking</a> (ANPR) in November 2022 that asked a range of questions about this rule, we have seen no further activity.

Franchise Rule – This rulemaking <a href="https://www.ftc.gov/news-events/news/press-releases/2019/02/ftc-seeks-public-comment-part-its-review-franchise-rule">kicked off back in 2019</a> and saw a <a href="https://www.ftc.gov/news-events/news/press-releases/2020/09/ftc-hold-virtual-workshop-november-10-franchise-rule">2020 workshop</a>, and in June 2023, the agency issued a related <a href="https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-seeks-public-comment-franchisors-exerting-control-over-franchisees-workers">request for information</a> that asked a range of questions about franchise relationships. Notably, the press release on that one certainly suggested substantial agency concerns about this industry.

Eyeglass Rule – This one is a bit industry-specific, but in December 2022, the FTC issued <a href="https://www.ftc.gov/news-events/news/press-releases/2022/12/ftc-proposes-updating-eyeglass-rule-require-prescribers-get-signed-confirmation-when-providing">proposed changes to this rule</a> that would, among other things, require signed confirmations for prescriptions. A <a href="https://www.ftc.gov/news-events/events/2023/05/clear-look-eyeglass-rule">workshop</a> was held in May 2023, and it has been all quiet since then.

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And with that cliffhanger, please stay tuned for part two, where we will explore a bunch of additional rules.

Keeping Up with the FTC Rulemakings – Part One

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