In April, a unanimous ruling by the U.S. Supreme Court declared that the Federal Trade Commission (FTC) had been improperly utilizing Section 13(b) of the FTC Act. In an opinion authored by Justice Breyer, regarding AMG Capital Management v. Federal Trade Commission, the court stated that “no one imagined that Section 13(b) of the FTC Act would become an important part of the Commission’s consumer protection program. […] By contrast, the Commission’s broad reading would allow it to use Section 13(b) as a substitute for Section 5 and Section 19…. that could not have been Congress’ intent.” Continuing, Justice Breyer clearly summed up the limitations of Section 13(b) by stating: “Section 13(b) does not explicitly authorize the Commission to obtain court-ordered monetary relief.”
That ruling is now being overturned through the restoration of Section 13(b) in a bill passed by the House on Tuesday. The Consumer Protection and Recovery Act passed 221-205, split almost entirely down party lines. Those in opposition to the bill expressed concern for “broad overreach” by the FTC and a need for statutory guardrails that would safeguard due process and protect legitimate businesses from being unfairly targeted or punished.
The White House publicly supported the bill in a statement saying, “The Administration applauds this step to expressly authorize the FTC to seek permanent injunctions and pursue equitable relief for all violations of law enforced by the Commission and ensure that the cost of illegal practices falls on bad actors, not consumers targeted by illegal scams.”
The bill will now go to the Senate.
