FTC Shakeup May Be Welcome News For Online Product Marketers

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Originally posted by Digital Law Group

The president appears to be making good on his promise to cut government regulations, as the Federal Trade Commission is the latest body to get “Trumped.” Maureen Ohlhausen of the FTC, a critic of government regulation, has been appointed the interim chair by President Trump. She replaces Edith Ramirez who will be resigning today, February 10, 2017.

Ohlhausen will be bringing a new focus to the FTC; specifically, an emphasis on pursuing claims based on actual consumer harm, not just whether a regulatory violation occurred. For example, on a recent $2.2M settlement with Vizio regarding the software in its T.V.s that tracked viewing activity of 11 million consumers without their knowledge, Ohlhausen agreed that although Vizio’s actions were deceptive, she seemed to oppose the notion that television viewing activity constitutes sensitive information. Ohlhausen also stated that the FTC needs to reexamine how it defines “substantial injury” to consumers and focus on the misuse of historically sensitive private consumer information, including health and financial information, information on children and social security numbers.

Not wasting anytime in this regard, Ohlhausen just announced that Jessica Rich, Director of the Bureau of Consumer Protection, is leaving the agency on February 17 and is being replaced by Thomas Pahl. During Rich’s tenure, the FTC brought numerous actions against businesses that resulted in billions of dollars being returned to consumers. These awards may soon be a thing of the past as Pahl, like Ohlhausen, supports deregulation.

While deceptive marketing practices will still be on the FTC’s radar, the good news for marketers is that Ohlhausen is not a proponent of how cavalierly investigations have been initiated; nor does she believe in the total disgorgement of profits of companies found to be in violation of (some) consumer protection laws.

Ohlhausen is just the interim chair, but it is rumored that Trump has a couple of like-minded candidates for the permanent position, including Sean Reyes, a former attorney general of Utah. Dietary supplements are the largest industry in Utah (worth over $7B annually). If selected, Reyes could be much welcome news for nutraceutical marketers. In fact, Utah Senator Orrin Hatch helped draft the 1994 Dietary Supplement Health and Education Act which regulates product claims, labeling, etc., and he is a strong supporter of the industry.

Regardless of who is chosen to permanently chair, recent moves should be encouraging to most product marketers and nutraceutical producers alike, though they may be less protective of consumer interests.

For questions or more information regarding the above content, email DLG@DigitalLawGroup.com

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