FTC Enforcement Powers Face Serious Challenge

FTC_Man_Controlling_TradeThe Federal Trade Commission (FTC) has long asserted broad authority to sue businesses for engaging in unfair or deceptive acts or practices.  But a recent federal court decision (Federal Trade Commission v. Shrire Viropharma Inc.) calls that authority into serious question.  If upheld on appeal, the decision could lead to major changes in the way FTC carries out its enforcement responsibilities.

The decision focused on § 13(b) of the Federal Trade Commission Act (FTCA).  That statute authorizes FTC to seek injunctive relief in federal court against anyone who “is violating, or is about to violate” a law enforced by FTC.  FTC has long contended that § 13(b) also authorizes actions against entities based on past violations, even in the absence of evidence that the entity “is about to” commit new violations.  A Delaware federal district judge’s rejection of that contention has thrown a monkey wrench into FTC’s enforcement apparatus. Continue reading “FTC Enforcement Powers Face Serious Challenge”