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This article was originally published in The Tan Sheet

Executive Summary

FTC REAUTHORIZATION BILL MARKUP BY ENERGY & COMMERCE COMMITTEE is scheduled for June 8. The bill to reauthorize the Federal Trade Commission (HR 2243) was cleared by the House Energy & Commerce/transportation subcommittee on May 28 with no amendments. The subcommittee held a hearing on May 26 ("The Tan Sheet" May 31, p. 7). The bill contains no restrictions on the commission's use of an "unfairness" standard in its regulation of advertising. Current law bans the use of such a standard in FTC rulemaking. The unfairness standard is considered to be a final obstacle to passage of an FTC reauthorization bill this year. The last FTC reauthorization legislation to be passed was 12 years ago. HR 2243 is co-sponsored by Energy & Commerce Committee Chairman John Dingell (D-Mich).). In a May 24 introductory statement on the legislation, the bill's sponsor, Rep. Al Swift (D-Wash.), said that "the last unresolved issue holding up the reauthorization of the FTC is the question of what should be the proper authority of the FTC in regulating advertising. I believe that this issue can be resolved in a manner that does not harm the consumer protection mandate of the FTC." He said he looks forward "to working constructively with all interested parties to achieve that end, to listen to their ideas, and to work with them to resolve outstanding issues that have held up the FTC reauthorization." The advertising industry favors a continuation of the ban on the unfairness standard. Another alternative might be to allow use of the unfairness standard but to set a specific definition of what is considered "unfair." A proposal regarding unfairness is not expected to be offered by the subcommittee until the bill reaches the conference stage with the Senate, according to staff. Corresponding legislation has not yet been introduced in the Senate. Among its provisions, HR 2243 would allow FTC orders to become effective 60 days after being served regardless of any petition for review, and to authorize FTC to use civil investigative demands to supplement its subpoena authority in antitrust investigations. FTC Chairman Janet Steiger supported the basic provisions of the bill at the May 26 subcommittee hearing. Reauthorization would "confirm that Congress believes in our mission," she maintained, and would ensure that FTC has the "resources it needs to fulfill that mission" ("The Tan Sheet" May 31, p. 7). Steiger also urged the inclusion of three additional provisions not contained in the bill, including: "broadening the venue for district court actions brought" by FTC; "expanding the commission's civil investigative demand authority to permit it to compel production of physical evidence"; and authorizing FTC "to prosecute criminal contempt actions against defendants who violate court orders resulting from actions filed by the commission."

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