The US Federal Trade Commission (FTC) has announced a series of new reviews scheduled for 2022 regarding key FTC guides and rules. Consumer-facing businesses should pay close attention to these reviews. While FTC reviews are periodic and can be routine, they can also result in fundamental changes to how the FTC approaches enforcement of key issues. Review periods can also provide an opportunity for impacted businesses to submit public comment and opinion to the FTC for consideration.
The FTC’s ongoing and upcoming reviews were highlighted in the Biden administration’s recently released Fall 2021 Unified Agenda of Regulatory and Deregulatory Actions; this publication highlights federal agencies’ regulatory action plans for the coming year. The FTC’s Statement on Regulatory Priorities announced that the agency will undertake a thorough review and examination of the guidance provided in, and the enforcement of, the following key guides and rules:
- Guides Against Deceptive Pricing: These Guides address types of pricing representations, such as marketer representations that a price is a “sale” or “discount,” comparisons to others’ prices or manufacturers’ retail prices and representations about special prices based on the purchase of other goods or services (e.g., “buy-one-get-one” offers).
- Guide Concerning Use of the Word ‘Free’ and Similar Representations: This Guide sets forth requirements when using the promotional device of offering “free” merchandise or services. When making such offers, the Guide requires all terms and conditions be set forth clearly and conspicuously at the outset of the offer to avoid any reasonable probability that the terms might be misunderstood.
- Guides for the Use of Environmental Claims (Green Guides): The Green Guides provide the general principles applying to all environmental marketing claims; how consumers will likely interpret certain claims and how marketers can substantiate such claims; and how marketers can qualify such claims to prevent deception of consumers.
- Business Opportunity Rule: This Rule requires business opportunity sellers to give prospective buyers particular information to aid in their evaluation of a business opportunity. The FTC intends to initiate review of this Rule by late 2021.
- Amplifier Rule: This Rule creates uniform test standards and disclosures for consumers to make more meaningful comparisons of amplifier equipment performance attributes. The FTC plans to submit a recommendation for further Commission action on review of this Rule by February 2022.
In addition to those newly announced reviews, the report also discussed the following ongoing FTC reviews:
- Children’s Online Privacy Protection Rule (COPPA): COPPA imposes requirements on operators of websites or online services directed to children under age 13 as well as on operators of websites or online services that have actual knowledge that they are collecting personal information online from a child under age 13. FTC staff is continuing to analyze and review the public comments; however, the period for comment on COPPA ended in late 2019.
- Guides Concerning the Use of Endorsements and Testimonials in Advertising (Endorsement Guides): These guidelines are designed to help businesses and other advertisers of TV, print, radio, blogs, word-of-mouth marketing, etc., and they ensure they meet truthful and not misleading standards. Although the period for public comment on the Guides ended in 2020, FTC staff is still reviewing these comments.
- Guides for Select Leather and Imitation Leather Products (Leather Guides): The Leather Guides address misrepresentations about the composition and characteristics of certain leather and imitation leather products. The Guides mandate disclosure of non-leather content for material that appears to be, but is not, leather. FTC staff intends to submit a recommendation for further Commission action by the end of 2021.
- Rule Concerning the Use of Prenotification Negative Option Plans (Negative Option Rule): The Negative Option Rule helps consumers avoid recurring payments for products or services they did not intend to order and permits them to cancel such payments without unwarranted obstacles. In 2019, the FTC issued an Advance Notice of Proposed Rulemaking regarding the Rule, but the agency noted its next expected action is “undetermined” as it “stud[ies] various options.”
- Telemarketing Sales Rule: This Rule requires telemarketers to make specific disclosures of material information, prohibits misrepresentations, sets limits on the times telemarketers may call consumers, prohibits calls to consumers who have asked not to be called again, and sets payment restrictions for the sale of certain goods and services. The FTC’s review of this Rule began in 2014; the agency’s staff stated it intended to make a recommendation to the Commission in November 2021.
While President Biden’s Executive Order on Antitrust garnered a lot of headlines, the agenda and recent announcements by the FTC indicate that 2022 will see an equally aggressive pursuit of consumer protection issues.