FTC Votes 3-2 on Party Lines to Expand Staff Investigatory Powers

The FTC voted along party lines in passing eight omnibus resolutions designed to increase investigative powers for agency staff, the agency announced Tuesday. Cracking down on manufacturer restrictions on independent, third-party repairs was one area of focus.

The resolution on repair restrictions "enhances the FTC’s ongoing investigations" into allegedly bad manufacturer behavior on service practices and "builds on" the agency's unanimously approved July 21 policy statement aimed at consumers' right to self-repair (see 2107210061), it said: "It would cover a wide range of anti-consumer and anti-competitive abuses and facilitate staff’s impending investigation of violations of the Magnuson Moss Warranty Act’s anti-tying provisions."

Democratic Chair Lina Khan and Commissioners Rohit Chopra and Rebecca Kelly Slaughter voted yes to the resolutions. Republican Commissioners Noah Phillips and Christine Wilson voted no. All five members agreed to make the recommendations public.

The omnibus resolutions will allow staff to issue civil investigative demands and subpoenas “without delays,” said Khan and Slaughter. They highlighted specific areas of “serious public concern” for which the investigative resolutions will apply, including repair restrictions, dark patterns, “black-box” algorithms and discriminatory biometrics. They dismissed Republicans’ claims that the resolutions remove commission oversight of investigations, noting no enforcement action can proceed without majority support from commissioners. They said the agency has 56 omnibuses in place, many with bipartisan support. “Given the agency’s severe resource constraints, finding ways to make our processes more efficient and streamlined is paramount,” they wrote.

The resolutions will “improve the agency’s ability to order documents and data in investigations and fills a notable gap in the Commission’s long list of enforcement authorizations developed over many years,” said Commissioner Rohit Chopra. Like Slaughter and Khan, he highlighted issues with military-connected families that are targeted by scammers. He specifically cited a need to protect service members’ personal data on social media, including geolocation data.

“Removing Commission oversight of investigations does virtually nothing to make those investigations more effective but does mean less input and oversight from the Commission,” dissented Phillips and Wilson. The resolutions create less accountability, more room for mistakes and open the door for political decision-making, they said. Congress didn’t authorize single commissioners or staff the authority to bless compulsory process, but the eight resolutions, and seven previously approved by Democrats, undo Congress’ will, they said: “Unilateral approval from the chair or his or her chosen commissioner is sufficient.” They questioned Democrats’ motive in addressing an increase in merger filings, saying the counterintuitive actions actually increase agency workload.

“These resolutions enable the FTC to take swift action against a whole host of illegal conduct in important areas of concern to the Commission,” said Competition Bureau acting Director Holly Vedova. The joint recommendations came from that bureau and the Consumer Protection Bureau.