At a recent speaking engagement at the University of California Berkeley School of Law, David Vladeck, Director of the Federal Trade Commission’s Bureau of Consumer Protection, said that the FTC is creating a legacy of enforcement that changes expectations and baselines. Vladeck used strong words to describe the FTC’s hardline stance on enforcement, saying that the FTC has “sent a signal to the fraudster community” that “if you engage in this kind of fraud, we’re going to take everything you have and then try to burn down your house.” He noted that the FTC has obtained in the last three years more than 300 redress orders worth hundreds of millions of dollars for consumers, and that it has obtained 150 occupational bans against bad actors. Berkeley law professor Ted Mermin also spoke at the engagement. According to Mermin, under the Obama administration, the FTC has been more aggressive than it has been over the last 35 years in bringing judicial actions, bringing an average of 57 actions annually, far more than any other President over that time (the next closest was President George W. Bush with 36 actions annually).
While Vladeck’s strong words seem to be focused on consumer scams and other types of fraud, reputable businesses should also take note, particularly with respect to their advertising practices. As companies continue to come up with innovative ways to reach their customers (see, for example, Twitter’s new targeted advertising tool), it is important that they understand the regulatory landscape in which they operate. As a baseline, advertisers should ensure that their ads are not misleading, and that their corresponding privacy policies are current and truthful. However, it is also important for the FTC to understand the realities of a competitive landscape and refrain from creating a chilling effect on innovation and competition by over regulation and aggression.