FTC to Operate Through Friday; Industry, Advocates Lament Potential Delays

The FTC has funding to operate through 11:59 p.m. EST Friday, a spokesperson said Thursday. The agency previously said it would operate through at least mid-day Friday if there were a lapse in funding (see 1812210048). The agency’s latest contingency plan shows it operating at about 23 percent in a shutdown. Employees working Friday can complete shutdown responsibilities before the end of the work day, the spokesperson said.

Corporations awaiting FTC merger reviews could have potential deals jeopardized by filing delays caused by the shutdown, said Davis Wright antitrust lawyer Douglas Litvack, an ex-FTC Competition Bureau attorney. The shutdown also will delay efforts to end fraud and other activity harmful to consumers, said Jules Polonetsky, CEO of Future of Privacy Forum, a coalition of industry, academia and consumer advocates.

Litvack suggested the shutdown won’t significantly affect enforcement of antitrust and consumer protection laws. He worked at the FTC during the 2013 government shutdown, which lasted 16 days. The FTC will delay all cases it can, he said, which won’t alter enforcement outcomes. Transactions could be jeopardized because they depend on financing and hard deadlines, he said. Hart-Scott-Rodino-related litigation and merger activity is considered “essential” agency activity in many cases.

The 2013 shutdown was “incredibly frustrating” for the agency, said Hunton Andrews consumer protection attorney Phyllis Marcus, former Advertising Practices Division chief of staff. A tremendous amount of thought and resources are put into planning for a shutdown, which takes away from completing the agency’s mission, she said. It’s illegal for non-essential employees to continue working, she added.

Non-essential employees aren’t allowed to do even minor work like check emails, said former FTC Consumer Protection Bureau Financial Practices Division Assistant Director Duane Pozza, now a partner at Wiley Rein. He suggested industry groups that have time-sensitive activity before the commission get in touch with officials.

January’s government shutdown lasted three days, and February’s ended in a day. If history is a guide, this shutdown shouldn't last long, said Hinch Newman internet advertising and marketing compliance attorney Richard Newman. From a consumer protection and advocacy standpoint, the shorter the shutdown the better, he said, arguing it might benefit companies the FTC is investigating: “I would imagine that those in the regulatory crosshairs would prefer that a shutdown continue indefinitely.”

The shutdown won’t affect high-profile probes of Facebook and Equifax, Litvack said. Polonetsky said delays will have a negative impact on consumers. FTC staff is conducting dozens of investigations, some of which could be “precedent setting on major tech issues and others where consumers are being defrauded by telemarketers and spammers,” he emailed. “The shutdown delays efforts to end these frauds and means more consumers will be ripped off.”

Shutdown Notebook

One casualty of the ongoing federal shutdown could be policy discussions at CES, which starts Jan. 8 in Las Vegas. Few government officials are likely to make the trip, with travel curtailed in many cases until the government is fully reopened. Among the scheduled speakers are FCC Commissioner Brendan Carr and FTC Commissioner Rebecca Kelly Slaughter.

CTA looks forward to “welcoming a large number of U.S. and International government officials at CES,” an official said. “If the shutdown coincides with the dates of CES, U.S. government officials will make their own travel determinations consistent with the rules of their branch or agency.” The FCC didn’t comment Thursday.

The Senate and House both held pro forma sessions Thursday, but there were no immediate signs of pending action to end the shutdown. "No votes are expected in the House this week," House Majority Whip Steve Scalise, R-La., said in a notice to lawmakers. "As the House awaits Senate action on remaining FY19 appropriations, we will aim to provide 24 hours' notice ahead of any expected votes in the House."

The FCC and General Services Administration asked the U.S. District Court for the District of Columbia Thursday for a stay in ongoing litigation by a freelance journalist over Freedom of Information Act requests filed with the agencies seeking details about use of electronic comment submission tools (see 1812030034). In the docket 17-cv-01835-CRC filing (in Pacer), the agencies said without an appropriation to DOJ, the assistant federal attorney on the case can't work.