FTC Authority Grab Troubling for Consumers and Competition
NetChoice cautions against expanding FTC rulemaking authority

(Washington, D.C.) – NetChoice opposes the Federal Trade Commission’s attempt to shrug off long-standing restrictions that guard against harmful over-regulation. In testimony delivered to the U.S. Senate Commerce Committee, the FTC requested a repeal of the Magnuson-Moss rules, which were enacted 35 years ago to place safeguards against FTC over-regulation.
 
“The FTC has a vital and challenging job in protecting American consumers,” said Steve DelBianco, executive director of NetChoice. “But we’re now faced with a situation where the public needs to be protected from an FTC with carte blanche regulatory authority.”  
 
When Congress passed the Magnuson-Moss Act in 1975, it checked the FTC’s exceptionally broad powers over “unfair or deceptive” acts by creating the current transparent rulemaking process.
 
The congressional action was a specific reaction to FTC attempts to ban broad categories of advertising and assertions that it could even use its “unfairness” power to regulate the employment of illegal aliens and punish tax cheats and polluters.  
 
NetChoice fears that if the existing safeguards are repealed, an unchecked FTC might use its new powers to regulate the notice and choice regime under which online users consent to data practices – often in exchange for free services.  These arrangements have helped enable current business models for e-commerce and online services.
 
“And while commissioner Leibowitz finds the long standing rules”medieval,” we fear that their repeal would require consumers and online retailers to don chainmail to fend off the inevitable barrage of overreaching regulations,” said DelBianco.
 
The FTC’s request for expedited regulatory authority is a top offender on NetChoice’s iAWFUL list. The list details state and federal laws that represent the greatest threats to a free and efficient Internet. The full iAWFUL list, complete with bill descriptions, is available at http://www.iAWFUL.com. Twitter users can follow iAWFUL developments on the NetChoice feed (@NetChoice). Expanded information is also available on the NetChoice blog at http://blog.netchoice.org