Snubbing Democrats' Amendments, House Commerce Republicans Advance FTC Process Bill

Legislation that would significantly change how the FTC investigates and enforces violations and manage other practices advanced during a House Commerce Committee markup Thursday on a 30-20 party-line vote. Republicans rebuffed several major amendments offered by Democrats, who said the bill would weaken the commission (see 1605240042 and 1607120046). On the prior day, the committee passed another FTC-related bill outlawing gag clauses preventing online consumer reviews and one on amateur radio operators (see 1607130023). Ranking member Frank Pallone, D-N.J., told us after the hearing that the FTC Process and Transparency Reform Act (HR-5510) has little chance of becoming law.

"This basically guts the FTC's ability to protect consumers," Pallone said of the bill. "Democrats are going to oppose it. I'm sure the Senate Democrats would oppose it if it even passes the House and the president would veto it. So this is just a complete waste of time." He said the House might pass the bill "just as a message ... but it has no chance of becoming law." He said Republicans proposed the bill because they want to support industry and corporate interests and "don't want to have consumer protections.”

Republicans said the legislation would improve accountability and transparency within the FTC without undermining the commission's ability to protect consumers and privacy. “In passing today’s FTC reform bills, we underscore the larger goal of the subcommittee’s ongoing Disrupter Series -- to enhance our understanding of how federal policies are hindering the efficiency, transparency, and functionality of our government," said Commerce, Manufacturing and Trade Subcommittee Chairman Michael Burgess, R-Texas, who sponsored the bill, in a news release. “Our Disrupter Series revealed outdated policies that are harming innovation, and our members got to work and crafted thoughtful, targeted reforms to modernize the FTC,” said Chairman Fred Upton, R-Mich. The FTC declined to comment.

Democrats offered seven major amendments. They include: giving the FTC rulemaking authority similar to the FCC; lifting the common carrier exemption in the FTC Act that prevents the commission from bringing enforcement actions against telecom companies; giving the FTC power to enforce rules on nonprofit organizations, which it can't do now; and ensuring the commission's consent decrees against companies that target minority and veterans populations last the typical 20 years rather than being capped at eight years, which the HR-5510 does. Those amendments failed either by roll call or voice votes along party lines. During the markup, Pallone and Rep. Jan Schakowsky, D-Ill., ranking member on the Commerce, Manufacturing and Trade Subcommittee, repeatedly spoke in support of the Democratic amendments.

Schakowsky near the outset of the markup said the FTC should be strengthened but the bill "does the opposite," making it more difficult for the commission to do its work. "The bill would limit the FTC’s ability to bring cases to protect consumer privacy," she said. "It would cut the length of consent decrees that stop repeated bad behavior. It would bog down the FTC by forcing it to more frequently review and renew its actions. And it would require time consuming economic analyses for recommendations made to outside entities, effectively preventing the FTC from providing the consumer perspective.” She said cutting its enforcement power and stretching its resources would result in less consumer protection "and therefore more victims of deceptive advertising and unfair business practices.”

While Communications Subcommittee ranking member Anna Eshoo, D-Calif., said Republicans are repeatedly complimenting FTC work in consumer protection and privacy, the opposite was true and she accused them of "wrecking" the agency through the bill. "Sometimes we say hypocrisy; I think this is political cross-dressing," she said to laughs from other Democrats. She told Republicans they can't praise the FTC one week and then take it apart. "It's pretty stark to me," she said. "We can't have it both ways.”

Burgess was the only Republican who offered an amendment, which he described as technical in nature. The approved amendment, he said, would require the commission to publish an economic analysis or advice only if it has already prepared one. "If no advice or no analysis is prepared, all that is required is a statement saying so," he said.

Burgess was also the sole voice for the Republican side during the markup. He called the amendment giving the FTC rulemaking authority for data security a "slippery slope," "unnecessary" and "bad public policy." He said the amendment offered by Rep. Jerry McNerney, D-Calif., to lift the common-carrier exemption would result in duplicative and inconsistent regulations. "I don't need to spell out for you what that would do to economic growth," he said. While he said veterans should be protected against companies that seek to defraud them, he said it "creates a dangerous precedent" to call for the protection of some groups but not others. He said the amendment wasn't workable.