[Senate Hearing 117-765]
[From the U.S. Government Publishing Office]


                                                    S. Hrg. 117-765

                           STRENGTHENING THE
                  FEDERAL TRADE COMMISSION'S AUTHORITY
                          TO PROTECT CONSUMERS

=======================================================================

                                HEARING

                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 20, 2021

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
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                Available online: http://www.govinfo.gov
                
                               __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
54-106 PDF                  WASHINGTON : 2023                    
          
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                   MARIA CANTWELL, Washington, Chair
AMY KLOBUCHAR, Minnesota             ROGER WICKER, Mississippi, Ranking
RICHARD BLUMENTHAL, Connecticut      JOHN THUNE, South Dakota
BRIAN SCHATZ, Hawaii                 ROY BLUNT, Missouri
EDWARD MARKEY, Massachusetts         TED CRUZ, Texas
GARY PETERS, Michigan                DEB FISCHER, Nebraska
TAMMY BALDWIN, Wisconsin             JERRY MORAN, Kansas
TAMMY DUCKWORTH, Illinois            DAN SULLIVAN, Alaska
JON TESTER, Montana                  MARSHA BLACKBURN, Tennessee
KYRSTEN SINEMA, Arizona              TODD YOUNG, Indiana
JACKY ROSEN, Nevada                  MIKE LEE, Utah
BEN RAY LUJAN, New Mexico            RON JOHNSON, Wisconsin
JOHN HICKENLOOPER, Colorado          SHELLEY MOORE CAPITO, West 
RAPHAEL WARNOCK, Georgia                 Virginia
                                     RICK SCOTT, Florida
                                     CYNTHIA LUMMIS, Wyoming
                    David Strickland, Staff Director
                 Melissa Porter, Deputy Staff Director
       George Greenwell, Policy Coordinator and Security Manager
                 John Keast, Republican Staff Director
            Crystal Tully, Republican Deputy Staff Director
                      Steven Wall, General Counsel
                           
                           
                           
                           C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 20, 2021...................................     1
Statement of Senator Cantwell....................................     1
Statement of Senator Wicker......................................     2
    Letter dated April 20, 2021 to Hon. Maria Cantwell and Hon. 
      Roger Wicker from Neil L. Bradley, Executive Vice President 
      and Chief Policy Officer, Chamber of Commerce of the United 
      States.....................................................     5
Statement of Senator Fischer.....................................    25
Statement of Senator Tester......................................    27
Statement of Senator Moran.......................................    29
Statement of Senator Klobuchar...................................    31
Statement of Senator Cruz........................................    33
Statement of Senator Blumenthal..................................    35
Statement of Senator Blackburn...................................    37
Statement of Senator Schatz......................................    38
Statement of Senator Thune.......................................    40
Statement of Senator Peters......................................    42
Statement of Senator Rosen.......................................    44
Statement of Senator Lummis......................................    45
Statement of Senator Hickenlooper................................    47

                               Witnesses

Hon. Rebecca Kelly Slaughter, Acting Chairwoman, Federal Trade 
  Commission.....................................................     8
    Prepared statement of the Federal Trade Commission...........    10
Hon. Noah Joshua Phillips, Commissioner, Federal Trade Commission    16
Hon. Rohit Chopra, Commissioner, Federal Trade Commission........    17
Hon. Christine Wilson, Commissioner, Federal Trade Commission....    19

                                Appendix

Response to written questions submitted to Hon. Rebecca Kelly 
  Slaughter, Hon. Noah Joshua Phillips, Hon. Rohit Chopra, and 
  Hon. Christine Wilson by:
    Hon. John Thune..............................................    51
    Hon. Todd Young..............................................    52
    Hon. Shelley Moore Capito....................................    52
Response to written question submitted to Hon. Noah Joshua 
  Phillips and Hon. Christine Wilson by:
    Hon. John Thune..............................................    53
    Hon. Todd Young..............................................    53
    Hon. Shelley Moore Capito....................................    54
Response to written questions submitted to Hon. Rebecca Kelly 
  Slaughter, Hon. Noah Joshua Phillips, Hon. Rohit Chopra, and 
  Hon. Christine Wilson by:
    Hon. John Thune..............................................    55
    Hon. Todd Young..............................................    55
    Hon. Shelley Moore Capito....................................    56

 
                           STRENGTHENING THE
       FEDERAL TRADE COMMISSION'S AUTHORITY TO PROTECT CONSUMERS

                              ----------                              


                        TUESDAY, APRIL 20, 2021

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m., in room 
SR-253, Russell Senate Office Building, Hon. Maria Cantwell, 
Chair of the Committee, presiding.
    Present: Senators Cantwell [presiding], Klobuchar, 
Blumenthal, Schatz, Peters, Tester, Rosen, Hickenlooper, 
Wicker, Thune, Cruz, Fischer, Moran, Blackburn, and Lummis.

           OPENING STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    The Chair. Good morning. The Senate Committee on Commerce, 
Science, and Transportation will come to order. We are here 
this morning to have our first hearing of this 117th Congress 
with the Federal Trade Commission. So, I welcome the Acting 
Chairwoman and Commissioners to this very first hearing.
    I would like to begin with a discussion of a report 
released yesterday by the FTC. The report shines a spotlight on 
COVID-related fraud and scams preying on American consumers and 
their families during the pandemic. These bad actors are 
kicking consumers when they are already down, peddling fake 
COVID cures, trolling for personal data in order to commit 
identity theft, and selling counterfeit PPP to first 
responders. The FTC report shows a 45 percent increase in the 
number of consumer complaints filed over 2020--for 2020 over 
2019. This matches the increase in consumer complaints filed 
with the Washington Attorney General's office during the height 
of the pandemic.
    That is why we are here today, to strengthen the 
Commission's ability to fight for consumers. Unfortunately, the 
FTC's long-standing authority to return money to victims is 
endangered now at the Supreme Court. This authority, the so 
called 13(b) Authority, is the bread and butter of the FTC's 
consumer protection mission.
    For more than 40 years, 13(b) has been used by the FTC to 
return funds illegally taken from consumers. The FTC has 
returned hundreds of millions of dollars to Americans injured 
by unlawful business practices. For instance, in 2019 the FTC 
returned $34 million to consumers in a settlement with the 
Office Depot organization, which ran bogus virus scans on 
consumers' computers and used false results to persuade 
consumers to pay more for repairs. Because of 13(b), relief to 
consumers included more than $3.7 million to 58,000 residents 
of Texas, more than $800,000 to 12,000 residents from 
Tennessee, and more than $1.2 million to about 20,000 
Washington consumers.
    Similarly, in 2019, a settlement against the University of 
Phoenix, the FTC secured over $40 million in cash to over 
146,000 U.S. students, as well as student debt cancellation. 
The University of Phoenix had attracted students with a false 
claim of job opportunities, including ads that had suggested 
military--that had targeted military and Hispanic consumers. 
The FTC returned more than $1.1 million to around 3,500 
consumers in Tennessee and 3,000 consumers in Washington.
    These cases just demonstrate the need to maintain the long-
standing FTC authority. And the COVID pandemic has intensified, 
I believe, the need for that consumer protection. Since the 
beginning of the pandemic, the country has been besieged by 
scams and deception. For example, last April, the FTC sent a 
warning letter to a health clinic in Olympia, Washington, that 
was making unproven claims that it could treat COVID-19 with 
just a high dose of vitamin injections. The Seattle 
microbiologist marketed and sold unauthorized corona vaccines 
to consumers for up to $1,000 each. The FTC sent him a warning 
letter and he was later sued by our State's attorney general.
    So, all of these scams, along with the one that was 
perpetrated about making the moniker of an N95 mask when it 
really did not meet that standard, all of these things are why 
we want to make sure that the FTC has appropriate authority. 
The Commission filed a complaint last week, which used their 
new authority, that we just gave them, against another alleged 
seller of a sham COVID cure. So, we very much appreciate that 
you are using the new authority and working.
    We need honest businesses, many of them small businesses, 
should not have to compete with businesses who are using these 
unfair tactics. So, it is not only good for consumers, it is 
also good for our economy, and other businesses that are 
playing by the rules. So, I know that today we will hear much 
more about this, but we have to do everything we can to protect 
this authority, and if necessary, pass new legislation to do 
so.
    So, thank you all for being here. I will introduce you in a 
minute, but now I am turning to my colleague for his comments.

                STATEMENT OF HON. ROGER WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Thank you, Madam Chair, and indeed this is 
a distinguished panel of witnesses. It is always good to hear 
from them, and we are glad to have you back before our 
committee. I look forward to your testimonies.
    For over 100 years, the FTC has been the chief consumer 
protection agency of the United States. Its mission, stated 
plainly in the FTC Act, is to protect consumers from unfair or 
deceptive acts or practices in the marketplace, such as 
deceptive advertising, harmful technology, illegal robocalls, 
and scams. It also includes protecting consumers from 
businesses that misuse their personal data or attempt to 
process their data in discriminatory ways.
    As the distinguished Chair has already said, unfortunately, 
the COVID-19 pandemic has created new avenues for scammers and 
cybercriminals to take advantage of consumers. The 
unprecedented nature of the virus has opened the door to scams 
related to fake cures and vaccines, as well as fake virus 
tests. Most recently, the pandemic has created a market for 
counterfeit vaccination cards purportedly from the CDC. This 
adds to a long list of frauds, scams, and bad business 
practices the FTC is continually working to address.
    To combat fraud and protect consumers from unfair or 
deceptive practices in the marketplace, the FTC has 
historically relied upon its assumed authorities, under Section 
13(b) of the FTC Act. This has enabled the FTC to stop illegal 
activity or require scammers to give money back to those who 
have been defrauded. Last Congress, in anticipation of the 
Supreme Court's plans to address challenges to the scope of the 
FTC's authority under 13(b), I included a provision in my 
proposed data privacy bill, the SAFE DATA Act, that would 
clarify the Commission's authority under the laws to stop 
fraudulent activities and obtain monetary redress for 
consumers.
    This morning, I look forward to examining how Congress can 
further clarify the statute to empower the FTC, not only to 
enjoin improper behavior, but also to compensate victims for 
their losses. I also look forward to discussing how to ensure 
the proper assessment of monetary remedies, and that legitimate 
businesses are given fair notice about practices the FTC may 
deem to be unfair, as it expands its use of 13(b) to stop 
wrongdoing.
    The pandemic has further underscored the need for strong, 
uniform data privacy legislation. Over the past year, our 
normal activities of work, school, and visiting with family 
moved online to prevent further spread of the coronavirus. 
However, with no national data privacy law in place, continued 
virtual interactions could pose serious and negative risks for 
exposure, and potential exploitation, of the personal data of 
millions of Americans. I am sure Commissioners will want to 
discuss what the FTC has been doing during the pandemic to 
protect the privacy and security of personal data and what 
additional tools the agency needs to safeguard consumers' 
information from misuse.
    The FTC also plays an essential role in overseeing and 
preventing unfair methods of competition in the marketplace. 
Although the Commission's work on competition is not within the 
jurisdiction of this committee, it does impact consumer welfare 
and informs how companies may attempt to defraud, mislead, or 
discriminate against consumers in the marketplace.
    In this regard, Big Tech's dominance is of particular 
concern. This dominance has led to an abuse of their market 
power, in the form of censorship and content suppression, as 
well as the abuse of consumers' data in the form of repeated 
privacy violations and data misuse. As Justice Thomas opined 2 
weeks ago, we now have a society in which a few Silicon Valley 
CEOs decide what films you can stream, which books you can buy, 
and what scientific discourse is allowed in public. Today's 
hearing is an opportunity to discuss what more the FTC can do 
to address these matters in furtherance of its consumer 
protection mission.
    Finally, this committee has been working to develop 
bipartisan legislation to establish a national framework 
permitting college athletes to be compensated for the use of 
their name, image, and likeness--NIL. As this work continues, 
it is clear that the FTC's expertise in protecting consumers 
will be a necessary asset in ensuring compliance with any NIL 
law and guarding student athletes, and their families, from 
exploitation. I hope Commissioners will discuss what additional 
tools, resources, and personnel expertise the FTC would need if 
it takes on this important work and oversees this collegiate 
sports marketplace as part of its consumer protection mission.
    Clearly there is much to discuss today. I thank the 
Commissioners for their testimonies, and I thank the 
Commissioners for their bipartisan work. I look forward to an 
informative discussion.
    At this point, Madam Chair, I would mention that you and I 
received a letter dated this morning from Mr. Neal L. Bradley, 
on behalf of the Chamber of Commerce. He is the Executive Vice 
President and Chief Policy Officer, consisting of three pages 
addressing the issues of importance with regard to the Federal 
Trade Commission and their interpretation of Section 19 of the 
Act and Section 13(b) of the Act. And I would ask that that 
letter be added to the record, at this point.
    The Chair. Without objection.
    [The information referred to follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Wicker. Thank you.
    The Chair. Thank you, Senator Wicker. Thank you for that 
comprehensive statement. I certainly appreciate you mentioning 
those issues that I definitely am going to query the Commission 
today on data security rules because I agree there is more that 
needs to be done there. I hope that we will have a hearing in 
May on this issue of market dominance on the news because 
clearly there are so many issues there that both the DOJ and 
the FTC should be looking into. We have just been looking for 
the right time for us to get necessary work out the door so we 
can turn to that focus. But clearly, we produced a report on 
some of this last year, about their tech companies' market 
dominance as it relates to media.
    So, definitely very concerned about that and just thank you 
for your leadership on NIL. I certainly appreciate the work 
that you and your team and others, Senator Booker and 
Blumenthal, everybody has been doing on such an important 
issue. So, you are right. It is a good chance to also ask them 
about that. So, yes, I do not think, in an information age, 
there is any shortage of issues that the FTC should be more 
aggressively involved in.
    So, we are glad you are here. Let me introduce the 
Honorable Rebecca Slaughter, who is the Acting Chair of The 
Federal Trade Commission, the Honorable Noah Phillips, a member 
of the FTC, the Honorable Rohit Chopra, who is with us as 
Commissioner of the FTC, and remotely, the Honorable Christine 
Wilson. Welcome to you all again. We are glad you are here. 
Thank you for your ongoing work and, Madam Chair, we will start 
with you.

 STATEMENT OF HON. REBECCA KELLY SLAUGHTER, ACTING CHAIRWOMAN, 
                    FEDERAL TRADE COMMISSION

    Ms. Slaughter. Thank you, Chair Cantwell, and Ranking 
Member Wicker, and members of the Committee, for inviting us 
here today. I am grateful for your continued support of the 
Federal Trade Commission and for the opportunity to testify 
about strengthening our authority to protect consumers. I know 
our staff, who have been working diligently throughout the 
pandemic, share my appreciation for your interest in the work 
we are doing and the challenges we face.
    Americans are struggling. Yesterday, the Commission issued 
a report, as the Chair noted, identifying the major challenges 
consumers have faced, and continue to face, as a result of the 
pandemic--health and safety concerns, economic distress, and 
increased susceptibility to digital harm. While all Americans 
have confronted these challenges, we know that Americans from 
communities of color and lower income communities have been 
hardest hit. I will focus my remarks today on how the FTC is 
applying the resources and authority Congress has given us to 
address these concerns and highlight the areas where I believe 
strengthening our authority is most critical.
    The Commission is profoundly grateful for the funding boost 
we received in our annual appropriation, and particularly, in 
the American Rescue Plan. Even before the pandemic, the growing 
problems in both consumer protection and competition requiring 
enforcement attention, were stretching our resources to the 
breaking point. That situation was dramatically exacerbated in 
the last year. We are working quickly to use the new money to 
hire staff and strategically fund our data collection and 
outreach efforts, with a specific focus on ensuring that we are 
reaching our hardest hit communities.
    When Congress gives us new authority, we will take it 
seriously and put it to use responsibly. We welcome the COVID-
19 Consumer Protection Act, which provided us with new civil 
penalty authority regarding certain COVID-19 deceptive acts and 
practices. Just last week, only 4 months after the law was 
passed, we announced our first action seeking penalties under 
this new authority, targeting deceptive COVID-19 marketing of 
vitamin D and zinc products.
    I want to emphasize that, when it comes to our current 
efforts, I am a strong proponent of a growth mindset. I 
challenge myself and the Commission at every turn, to look at 
all the tools we have been given and find ways to deploy them 
with greater effect. I recognize, however, that there are 
limits to the growth mindset.
    The FTC faces significant obstacles when it comes to our 
authority and resources. Among the most urgent challenges we 
face is a judicial attack on our ability to provide monetary 
relief to consumers under Section 13(b) of the FTC Act. We use 
13(b) in a broad range of cases, including telemarketing fraud, 
anti-competitive pharmaceutical practices, data security and 
privacy, scams that target seniors and veterans, and most 
recently, COVID-related scams.
    Section 13(b) enforcement cases have returned billions of 
dollars to consumers, including $11.2 billion in refunds to 
consumers, during just the past 5 years. Returning money to 
consumers who have been harmed, is among the most important 
things we do. But the courts are dramatically curtailing our 
ability to deliver that relief, and right behind the cases 
challenging our redress authority under 13(b), is a line of 
cases challenging our ability to get injunctive relief. 
Enforcement actions will slow and redress for consumers will 
dry up, if Congress does not act quickly to affirm our full 
authority under Section 13(b).
    Along with 13(b), our other most pressing challenge remains 
resources. As I noted, we are incredibly grateful for the 
additional funding provided to the Commission. But we still 
remain significantly underresourced and overleveraged. Even 
before the recent merger wave, we were averaging twice as many 
annual merger filings as we had been 10 years ago, while our 
employee count remained flat. In fact, we had 50 percent more 
employees at the beginning of the Reagan Administration than we 
do today. And our filing rates keep going up.
    On the Consumer Protection side, there is similar growth in 
both breadth and depth of problems in the markets, especially 
digital markets, that require enforcement. But our ability to 
keep up with this volume to work, against large, sophisticated 
companies, without substantial increase in resources, will be 
limited.
    In addition to restoring 13(b) and augmenting resources, I 
want to note additional ways I believe Congress could 
strengthen our ability to deter legal conduct and return more 
funds to consumers. Specifically, I would welcome broader civil 
penalty authority, establishment of a consumer redress fund, 
and independent litigating authority for our civil penalty 
cases.
    In closing, I want to thank you for the opportunity to 
discuss our work and reiterate my commitment to you. When 
Congress chooses to vest the FTC with resources and authority, 
we will use it responsibly and effectively to protect the 
American people. I look forward to answering your questions.
    [The prepared statement of FTC Commissioners follow:]

           Prepared Statement of the Federal Trade Commission
I. INTRODUCTION
    Chair Cantwell, Ranking Member Wicker, and Members of the 
Committee, we are pleased to appear before you today.\1\ Despite the 
unprecedented challenges of the past year, the Federal Trade Commission 
(Commission or FTC) has endeavored to protect consumers and 
competition. A key part of this work has been combatting COVID-related 
harms. The Commission staff recently released a report describing the 
major challenges consumers face from the pandemic and the Commission's 
efforts to help: using reports from consumers to identify and respond 
to emerging unlawful practices in real time; filing more than a dozen 
law enforcement cases; directing the removal of deceptive claims 
related to COVID-19 made by more than 350 companies; and educating 
consumers and businesses through more than 100 alerts on COVID-related 
topics.
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    \1\ This written statement presents the views of the Federal Trade 
Commission. The oral statements and responses to questions reflect the 
views of individual Commissioners, and do not necessarily reflect the 
views of the Commission or any other Commissioner.
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    The civil penalty authority in the newly-enacted COVID-19 Consumer 
Protection Act\2\ and additional funding the Commission recently 
received from the American Rescue Plan will enable us to intensify our 
efforts to protect consumers from unscrupulous actors that seek to 
exploit the pandemic and its economic fallout. The Commission just 
brought its first action seeking monetary penalties under its new 
authority, targeting deceptive COVID-19 marketing of vitamin D and zinc 
products.\3\
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    \2\ Pub. L. No. 116-260, 134 Stat. 1182, Division FF, Title XIV, 
Sec. 1401(b)(1).
    \3\ FTC Press Release, In First Action Under COVID-19 Consumer 
Protection Act, FTC Seeks Monetary Penalties for Deceptive Marketing of 
Purported Coronavirus Treatments, https://www.ftc.gov/news-events/
press-releases/2021/04/first-action-under-covid-19-consumer-protection-
act-ftc-seeks (April 15, 2021).
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    In this testimony, we provide a high-level summary of the 
Commission's efforts and highlight the pressing need, in light of legal 
challenges, for Congress to affirm the FTC's authority to return money 
to consumers using Section 13(b) of the Federal Trade Commission Act.
II. COVID-19 CONSUMER PROTECTION EFFORTS
    The Commission has worked diligently to identify and address the 
effects of the COVID-19 pandemic on American consumers and businesses. 
The Commission's response to COVID-19 has included law enforcement, 
consumer education and outreach, and data collection, each of which is 
discussed in more detail below.
a. Law Enforcement
    Most recently, the FTC deployed its new authority under the COVID-
19 Consumer Protection Act to charge that a chiropractor and his 
company deceptively marketed products containing vitamin D and zinc as 
scientifically proven to treat or prevent COVID-19.\4\ This action is 
merely the latest in a long line of enforcement efforts that began 
early in the pandemic. The FTC issued its first warnings to consumers 
about COVID-19 related scams in February 2020, even before the 
declaration of a national emergency.\5\ As schemes proliferated in 
response to demand for scarce goods, to peddle treatments and cures, 
and to exploit consumers' and small businesses' financial distress, the 
FTC moved quickly to challenge deceptive claims. The agency filed its 
first action\6\ just one month after the President declared a national 
emergency concerning the COVID-19 outbreak on March 13, 2020.\7\ Since 
then, the FTC has sued entities for allegedly breaking promises to 
quickly ship personal protective equipment (PPE) and cleaning 
products,\8\ tricking consumers into paying for sanitizing products 
that were never delivered,\9\ falsely claiming that their products 
could treat and/or prevent COVID-19,\10\ and making deceptive claims 
regarding stimulus benefits.\11\ In addition, to protect consumers 
attempting to replace or supplement income during the pandemic, the 
Commission--along with 19 federal, state, and local partners--led a 
nationwide crackdown against scams making false promises of income and 
financial independence.\12\
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    \4\ See supra n. 3.
    \5\ Coronavirus: Scammers follow the headlines, https://
www.consumer.ftc.gov/blog/2020/02/coronavirus-scammers-follow-headlines 
(Feb. 10, 2020).
    \6\ Complaint, FTC v. Ponte Investments, LLC, Case No. 1:20-cv-
00177 (D.R.I.), available at https://www.ftc.gov/system/files/
documents/cases/sbacomplaint.pdf. The FTC alleged that the company 
falsely claimed an affiliation with the U.S. Small Business 
Administration (SBA) and marketed themselves to small businesses as an 
approved lender under SBA's Paycheck Protection Program (PPP).
    \7\ Proclamation 9994 of March 13, 2020, available at https://
www.govinfo.gov/content/pkg/FR-2020-03-18/pdf/2020-05794.pdf.
    \8\ Complaint, FTC v. SuperGoodDeals.com, Inc., Case No. 20-cv-3027 
(E.D.N.Y.), available at https://www.ftc.gov/system/files/documents/
cases/202_3135_supergooddeals_-_complaint.pdf; Complaint, FTC v. QYK 
Brands LLC, Case No. 8:20-cv-01431-JLS-KES (C.D. Cal.), available at 
https://www.ftc.gov/system/files/documents/cases/202_3147_qyk_brands_-
_complaint.pdf; Complaint, FTC v. Am. Screening, LLC, Case No. 4:20-cv-
1021 (E.D. Mo.), available at https://www.ftc.gov/system/files/
documents/cases/202_3158_american_screening_-_complaint.pdf; Complaint, 
FTC v. Zaappaaz LLC, Case No. 4:20-cv-02717 (S.D. Tex.), available at 
https://www.ftc.gov/system/files/documents/cases/202_3136_zaappaaz_-
_complaint.pdf.
    \9\ Complaint, FTC v. One or More Unknown Parties Deceiving 
Consumers Into Making Purchases Through: www.cleanyos.com, Case No. 
5:20-cv-02494 (N.D. Ohio), available at https://www.ftc.gov/system/
files/documents/cases/complaint_w-a_filed.pdf.
    \10\ Complaint, FTC v. Golden Sunrise Nutraceutical, Inc., Case No. 
1:20-cv-00540-DAD-SKO (E.D. Cal.), available at https://www.ftc.gov/
system/files/documents/cases/202_3146_golden_
sunrise_-_complaint.pdf; Complaint, FTC v. Ching, Case No. 2:20-cv-
03775 (C.D. Cal.), available at https://www.ftc.gov/system/files/
documents/cases/whole_leaf_complaint.pdf; Complaint, In re Ching, 
Docket No. 9394 (FTC), available at, https://www.ftc.gov/system/files/
documents/cases/d09394_administrative_part_iii_complaint.pdf.
    \11\ Complaint, In re Traffic Jam Events, LLC, Docket No. 2:20-cv-
1740,9395 (FTC), available at https://www.ftc.gov/system/files/
documents/cases/traffic_jam_events_complaint.pdfhttps://www.ftc.gov/
system/files/documents/cases/d9395_traffic_jam_complaint_final.pdf.
    \12\ FTC Press Release, As Scammers Leverage Pandemic Fears, FTC 
and Law Enforcement Partners Crack Down on Deceptive Income Schemes 
Nationwide, https://www.ftc.gov/news-events/press-releases/2020/12/
scammers-leverage-pandemic-fears-ftc-law-enforcement-partners (Dec. 14, 
2020).
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    Starting in March 2020, the FTC also launched a campaign to 
challenge companies' deceptive COVID-19 claims--directing the companies 
to cure violations and pursuing enforcement actions if problematic 
claims were not quickly removed. To date, the FTC has issued more than 
350 warning letters, many in conjunction with the Food and Drug 
Administration (FDA), to sellers and marketers that claimed that their 
products could treat or prevent COVID-19.\13\ The Commission also 
issued warning letters with the Small Business Administration regarding 
small business relief\14\ and joint letters with the Federal 
Communications Commission (FCC) to Voice Over Internet Protocol service 
providers and others ``assisting and facilitating'' illegal 
telemarketing calls, including calls to market products such as 
fraudulent home test kits.\15\ The Commission has monitored responses 
to these warning letters closely, and has been pleased to see that in 
the overwhelming majority of cases, letter recipients removed 
problematic claims quickly. The Commission is determined to pursue 
swift enforcement action against noncompliant warning letter 
recipients.
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    \13\ Copies of all of the FTC's COVID-19 related warning letters 
are available here: https://www.ftc.gov/coronavirus/enforcement/
warning-letters.
    \14\ FTC Press Release, FTC and SBA Warn Operator of SBA.com and 
Lead Generator Lendio to Stop Potentially Misleading Coronavirus Relief 
Loan Marketing, https://www.ftc.gov/news-events/press-releases/2020/05/
ftc-sba-warn-operator-sbacom-lead-generator-lendio-stop (May 18, 2020); 
Press Release, FTC and SBA Warn Six Companies to Stop Potentially 
Misleading Marketing Aimed at Small Businesses Seeking Coronavirus 
Relief Loans https://www.ftc.gov/news-events/press-releases/2020/06/
ftc-sba-warn-six-companies-stop-potentially-misleading-marketing (June 
24, 2020).
    \15\ FTC Press Release, FTC and FCC Send Joint Letters to VoIP 
Service Providers Warning against `Routing and Transmitting' Illegal 
Coronavirus-related Robocalls, https://www.ftc.gov/news-events/press-
releases/2020/04/ftc-fcc-send-joint-letters-voip-service-providers-
warning-against (Apr. 3, 2020); FTC Press Release, FTC and FCC Send 
Joint Letters to Additional VoIP Providers Warning against `Routing and 
Transmitting' Illegal Coronavirus-related Robocalls, https://
www.ftc.gov/news-events/press-releases/2020/05/ftc-fcc-send-joint-
letters-additional-voip-providers-warning (May 20, 2020).
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    In light of the eviction crisis caused by the pandemic, the 
Commission has partnered with fellow enforcers at the Consumer 
Financial Protection Bureau (CFPB) to focus on ensuring renters are not 
subjected to unlawful practices.\16\ The Commission also will continue 
its efforts to ensure that tenant screening companies comply with the 
Fair Credit Reporting Act, so that consumers who have gone or will go 
through an eviction are not further stigmatized by incomplete or 
inaccurate information as they seek new housing.\17\ The Commission is 
also monitoring and investigating conduct by multistate landlords that 
may violate the FTC Act or other laws if they evict tenants in 
violation of national, state, or local eviction moratoriums, as Acting 
Chairwoman Slaughter and Acting CFPB Director Uejio recently warned in 
a joint statement.\18\
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    \16\ Press Release, FACT SHEET: The Biden-Harris Administration's 
Multi-Agency Effort to Support Renters and Landlords, https://
www.whitehouse.gov/briefing-room/statements-releases/2021/03/29/fact-
sheet-the-biden-harris-administrations-multi-agency-effort-to-support-
renters-and-landlords/ (Mar. 29, 2021).
    \17\ An example of the FTC's efforts to protect tenants even before 
the pandemic is our case against AppFolio, in which the defendant 
agreed to settle charges that it failed to follow reasonable procedures 
to ensure the accuracy of criminal and eviction records in tenant 
screening reports and reported obsolete information. See Complaint, 
United States v. AppFolio, Inc., Case No. 1:20-cv-03563 (D.D.C. Dec. 8, 
2020), available at https://www.ftc.gov/system/files/documents/cases/
ecf_1_-_us_v_appfolio_complaint.pdf.
    \18\ Joint Statement by FTC Acting Chairwoman Rebecca Kelly 
Slaughter and CFPB Acting Director Dave Uejio (Mar. 29, 2021), https://
www.ftc.gov/news-events/press-releases/2021/03/joint-statement-ftc-
acting-chairwoman-rebecca-kelly-slaughter.
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    The Commission will remain vigilant in order to protect the public 
from harms that stem directly and indirectly from the COVID-19 
pandemic. The FTC is committed to tackling emerging threats, adjusting 
our strategies wherever necessary, and working in close coordination 
with our partners.
b. Consumer Education and Outreach
    The Commission has buttressed its law enforcement actions with 
consumer and business education. Since the beginning of the pandemic, 
the FTC has worked aggressively to dispel misinformation and confusion 
about the pandemic and related issues that have fueled COVID-related 
scams. The Commission's education campaign has several facets: consumer 
and business alerts; a multi-media campaign; substantive business 
guidance; and outreach with partners.
    Early in the pandemic, the Commission began issuing alerts warning 
consumers and the business community of COVID-related frauds. To date, 
the FTC has issued more than 100 consumer and business alerts on a wide 
range of COVID-related topics, including economic impact payments, 
health claims, online shopping, privacy in a virtual environment, 
contact tracing, government imposter scams, job scams, and 
misinformation.\19\ The FTC sends its alerts to more than 367,000 e-
mail subscribers, which include consumers, businesses, partners, and 
the media. In turn, many of these subscribers share the information 
with their communities, greatly expanding the reach of the agency's 
message. The FTC has developed a multimedia campaign with a dedicated 
website (ftc.gov/coronavirus) that contains a library of materials for 
consumers and businesses in several different languages.
---------------------------------------------------------------------------
    \19\ All of the FTC's business and consumer alerts are available at 
http://ftc.gov/coronavirus.
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    As the pandemic required many work, school, recreational, and 
social activities to transition from in-person to online and virtual 
platforms, the shift to digital life presented new opportunities for 
bad actors to exploit. The Commission worked to prevent this 
exploitation from occurring in the first instance. Accordingly, in 
April 2020, the Commission published guidance for education technology 
companies and schools regarding their duties to protect children's 
privacy and personal data--including warnings of the parental consent 
requirements for data collection imposed by the Children's Online 
Privacy Protection Act (COPPA).\20\ The FTC also took enforcement 
actions to stop digital harms.\21\
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    \20\ COPPA Guidance for Ed Tech Companies and Schools during the 
Coronavirus, https://www.ftc.gov/news-events/blogs/business-blog/2020/
04/coppa-guidance-ed-tech-companies-schools-during-coronavirus (Apr. 9, 
2020).
    \21\ Although the conduct in these matters occurred before the 
COVID-19 outbreak, the relief in these orders seeks to protect 
consumers from digital harms that have been exacerbated by the 
pandemic. See Complaint, United States v. HyberBeard, Inc., Case No. 
3:20-cv-03683 (N.D. Cal.) (enforcement of the COPPA Rule against kids 
app developer), available at https://www.ftc.gov/system/files/
documents/cases/192_3109_hyperbeard_-_complaint.pdf; Complaint, In re 
Zoom Video Comms., Inc., Docket No. C-4731 (FTC) (administrative action 
challenging claims that gave consumers a false sense of security about 
how the company protected their information), available at https://
www.ftc.gov/system/files/documents/cases/1923167zoomcom
plaint_0.pdf; Complaint, In re Flo Health, Inc., File No. 1923133 (FTC) 
(charges a developer of a period and fertility-tracking app with 
allegedly sharing consumer health information with outside data 
analytics providers after promising that such information would be kept 
private, available at https://www.ftc.gov/system/files/documents/cases/
flo_health_complaint.pdf.
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    Finally, FTC staff has engaged in national and local outreach with 
partners to reach a variety of audiences, including older consumers, 
ethnic and community media, housing organizations, re-entry groups, 
library patrons, and the military community. The staff has used 
webinars, tele-town halls, Twitter chats, Facebook Live events, and 
interviews with local and national media to reach its audiences. During 
the pandemic, FTC staff has participated in hundreds of virtual 
webinars, presentations, and interviews--in English, Spanish, and 
Mandarin. The FTC also has used new methods to reach people in 
economically and geographically diverse communities who are targeted by 
COVID-19 scam artists. For example, the FTC conducted a national radio 
media tour, mailed post cards to communities with low broadband access, 
and delivered letters to community health professionals in 5,000 rural 
and urban health clinics to help people avoid COVID-related fraud.
    As the pandemic has deepened, some new consumer financial issues 
have arisen and others have been exacerbated. To ensure we are 
responding appropriately to the issues consumers are facing, the FTC 
coordinated a series of virtual listen-and-learn sessions across the 
country. Participants have included representatives from legal 
services, social services, elder justice centers, departments of aging, 
housing counselors, Catholic Charities, the Better Business Bureau, and 
the offices of State Attorneys General. Based on input from 
stakeholders, the FTC is enhancing and expanding its COVID-19 financial 
recovery and resiliency campaign, the centerpiece of which will be a 
web-based toolkit available in multiple languages.
c. Data Collection
    The FTC's Consumer Sentinel Network collects millions of reports 
from the public about fraud, identity theft, and other consumer 
problems, and makes them available to thousands of law enforcement 
users across the country. In the weeks following the first known cases 
of COVID-19 in the U.S., the FTC developed systems to track and alert 
the public to shifts in Sentinel reporting. On ftc.gov/exploredata, the 
FTC launched public dashboards showing aggregate Sentinel data on 
reports associated with COVID-19 by age, type of fraud, and geographic 
location, with figures that are updated daily. Since January 2020 and 
as of April 7, 2021, the FTC has received more than 436,000 such 
reports, reflecting $399 million in fraud losses.\22\
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    \22\ The figures reflect reports in Sentinel that specifically 
mention words related to the pandemic, such as COVID, stimulus, N95 and 
related terms. To provide the most relevant results, some subcategories 
are excluded. For more information, visit https://public.tableau.com/
profile/federal.trade.commission#!/vizhome/COVID-19andStimulusReports/
Map.
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    The FTC's monitoring and analyses of Sentinel data reveal increased 
fraud activity in 2020. Specifically, the number of fraud, identity 
theft, and other reports to Sentinel (excluding Do Not Call) increased 
more than 45 percent over 2019 numbers, and reported losses from fraud 
grew from more than $1.8 billion in 2019 to $3.3 billion in 2020.\23\ 
Being able to use Sentinel data to spot trends has helped the FTC 
respond to emerging scams in real time--from bringing cases to halt 
fraudulent activity, to targeting alerts warning of the newest fraud, 
to addressing specific threats, such as the proliferation of identity 
theft related to unemployment insurance benefits.\24\
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    \23\ Some of the increase in complaints for 2020 is due to a new 
large data contributor, namely the FBI's Internet Crime Complaint 
Center, which added about 200,000 complaints in 2020. In addition, the 
FTC launched a re-designed website to capture consumer reports more 
easily at the end of October 2020. Nevertheless, the rise in reports is 
highly significant. From FTC's websites and call center alone, the 
surge in reports was about 970,000 in 2020, and many Sentinel data 
contributors also experienced an increase in complaint volume in 2020.
    \24\ Identity thieves targeted unemployment insurance benefits in 
record numbers in 2020. Of the identity theft reports received in 2020, 
over 400,000 came from people who said their information was misused to 
apply for a government benefit, and the overwhelming majority of these 
related to unemployment insurance. This represents a staggering 
increase of nearly 3000 percent from 2019. These reports were 
overwhelmingly about fraudulently obtained unemployment benefits 
claims, a problem that has proliferated during the pandemic. Working in 
cooperation with the U.S. Department of Justice Unemployment Insurance 
Fraud Task Force, the FTC launched www.IdentityTheft.gov/
unemploymentinsurance to provide information to the public on where to 
report and how consumers can protect their credit.
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    Ensuring that the experiences of all consumers are represented in 
Sentinel is critically important to the agency's work. To expand 
accessibility, the FTC launched a new modernized reporting website, 
ReportFraud.ftc.gov, in October 2020. The updated site includes a 
COVID-19 banner, providing an easy way for consumers to report COVID-
related issues. And, this month, the FTC launched the Community 
Advocate Center, which is part of the agency's ongoing work to 
collaborate with legal services organizations to learn about consumer 
protection needs and problems affecting the lower-income communities 
they serve. The Center provides a new way for organizations that 
provide free and low-cost legal services to report fraud and other 
illegal business practices directly to the FTC on behalf of their 
clients.
III. LEGISLATION IS NEEDED TO ENSURE EQUITABLE MONETARY 
        RELIEF UNDER SECTION 13(b) OF THE FTC ACT
    Over the past four decades, the Commission has relied on Section 
13(b) of the Federal Trade Commission Act to secure billions of dollars 
in relief for consumers in a wide variety of cases, including 
telemarketing fraud, anticompetitive pharmaceutical practices, data 
security and privacy, scams that target seniors and veterans, and 
deceptive business practices, among many others.\25\ More recently, in 
light of the pandemic, the FTC has used Section 13(b) to take action 
against entities operating COVID-related scams.\26\ Section 13(b) 
enforcement cases have resulted in the return of billions of dollars to 
consumers targeted by a wide variety of illegal scams and 
anticompetitive practices, including $11.2 billion in refunds to 
consumers during just the past five years.\27\ Section 13(b) is a 
critical tool in support of our enforcement missions, but its 
effectiveness is currently imperiled, and this uncertainty is hurting 
our ongoing enforcement efforts.
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    \25\ 15 U.S.C. Sec. 53(b).
    \26\ See, e.g., FTC Press Release, FTC Sues California Marketer of 
$23,000 COVID-19 ``Treatment'' Plan, https://www.ftc.gov/news-events/
press-releases/2020/07/ftc-sues-california-marketer-23000-covid-19-
treatment-plan (July 31, 2020).
    \27\ See https://public.tableau.com/profile/
federal.trade.commission#!/vizhome/Refunds_15797
958402020/RefundsbyCase.
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    Section 13(b) of the FTC Act is the agency's primary and most 
effective way of returning money to consumers that was unlawfully taken 
from them. The relevant portion of Section 13(b), often referred to as 
the ``second proviso,'' authorizes the FTC to sue directly in Federal 
court for violations of the FTC Act and states that ``in proper cases, 
the Commission may seek, and after proper proof, the court may issue, a 
permanent injunction.'' Beginning in the 1980s, seven of the twelve 
courts of appeals, relying on longstanding Supreme Court precedent, 
interpreted the language in Section 13(b) to authorize district courts 
to award the full panoply of equitable remedies necessary to provide 
complete relief for consumers, including disgorgement and restitution 
of money. For decades, no court held to the contrary. In 1994, Congress 
ratified its intent to enable the FTC to obtain monetary remedies when 
it expanded the venues available for FTC enforcement cases, 
strengthening the Commission's ability to bring redress cases.\28\
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    \28\ Federal Trade Commission Act Amendments of 1994, S. Rep. No. 
103-130, at 15-16, as reprinted in 1994 U.S.C.C.A.N. 1776, 1790-91. As 
the Senate Report noted, ``Section 13 of the FTC Act authorizes the FTC 
to file suit to enjoin any violation of the FTC Act. The FTC can go 
into court ex parte to obtain an order freezing assets, and is also 
able to obtain consumer redress . . . . . . The FTC has used its 
section 13(b) injunction authority to counteract consumer fraud, and 
the Committee believes that the expansion of venue and service of 
process in the reported bill should assist the FTC in its overall 
efforts.'' Id.
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    Recent judicial rulings, however, indicate a dramatic shift in how 
courts are interpreting and applying Section 13(b) in FTC cases. For 
example, in 2019, the Seventh Circuit, in FTC v. Credit Bureau Center, 
LLC,\29\ overruled its three decades of precedent and held that Section 
13(b) no longer allows the FTC to obtain monetary relief. The Credit 
Bureau Center opinion held that the word ``injunction'' in the statute 
allows only behavioral restrictions and not monetary remedies. Last 
fall, the Third Circuit, in FTC v. AbbVie,\30\ relying heavily on the 
analysis in Credit Bureau Center, similarly concluded that the 
Commission could not obtain any monetary relief under Section 13(b). In 
AbbVie, for example, the court held that the defendant drug company 
violated the antitrust laws by engaging in sham litigation to keep out 
generic competition, but nonetheless reversed the district court's 
award of $448 million meant to repay overcharged consumers. The net 
effect of the AbbVie ruling is that an adjudicated violator is 
nonetheless free to keep substantial ill-gotten profits extracted from 
consumers, based on a legal interpretation of Section 13(b) that no 
court of appeals had adopted prior to 2019.
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    \29\ FTC v. Credit Bureau Center, LLC, 937 F.3d 764 (7th Cir. 
2019).
    \30\ FTC v. AbbVie Inc., 976 F.3d 327 (3d Cir. 2020).
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    This issue is now pending before the U.S. Supreme Court, and the 
agency presented oral argument before the Court in January 2021.\31\ 
Although the Commission hopes to obtain a favorable ruling, the recent 
judicial trends exemplified by Credit Bureau Center and AbbVie are 
concerning. If the Supreme Court were to adopt the Seventh and Third 
Circuit's interpretation of Section 13(b), it would eliminate the 
primary tool that the FTC uses today to return money to consumer 
victims.
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    \31\ AMG Capital Mgmt. LLC v. FTC, No. 19-508. AMG is an appeal by 
defendants from a 2018 Ninth Circuit ruling in which the court re-
affirmed its prior precedent interpreting Section 13(b) to allow the 
FTC to obtain monetary relief. FTC v. AMG Capital Mgmt., LLC, 910 F.3d 
417 (9th Cir. 2018).
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    The uncertainty in the law is taxing the Commission's law 
enforcement resources. Defendants now routinely attempt to delay 
ongoing litigation for as long as possible in the hope that the Supreme 
Court will allow them to escape liability for any monetary relief, and 
several matters have been stayed pending the forthcoming Supreme Court 
decision.\32\ Defendants are also refusing to engage in settlement 
discussions unless the Commission agrees to abandon all claims for 
monetary relief. One defendant has gone as far as to initiate 
preemptive litigation in the Seventh Circuit to take advantage of the 
fact that the Commission already is precluded from seeking monetary 
relief under Section 13(b) there.\33\ These developments have slowed 
the resolution of our pending enforcement cases, requiring the 
Commission to expend more resources, and preventing staff from taking 
on new work.
---------------------------------------------------------------------------
    \32\ See, e.g., FTC v. Cardiff, No. 5-18-CV-02104, Dkt. # 511 (C.D. 
Cal. Oct. 9, 2020) (staying ruling on monetary relief pending 
disposition of AMG); FTC v. Match Group Inc., No. 3-19-CV-02281, Dkt. # 
54 (N.D. Tex. Oct. 9, 2020); FTC v. Lending Club Corp., No. 18-CV-
02454, 2020 WL 4898136 (C.D. Cal. Aug. 20, 2020).
    \33\ See Nerium Int'l, LLC v. FTC, No. 1:19-CV-7189 (N.D. Ill. 
filed Nov. 1, 2019) (motion to dismiss granted Aug. 31, 2020).
---------------------------------------------------------------------------
    In addition, two other recent Third Circuit decisions 
reinterpreting Section 13(b) jeopardize the FTC's ability to enjoin 
illegal conduct in Federal court. In FTC v. Shire ViroPharma, a case 
involving a drug company's alleged abuse of FDA's citizen petition 
process to delay generic competition, the court held that the FTC can 
bring enforcement actions under Section 13(b) only when a violation is 
either ongoing or ``impending'' at the time the suit is filed.\34\ That 
decision unnecessarily limits the Commission's ability to obtain 
monetary relief for consumers who have been harmed by unlawful conduct 
that occurred entirely in the past. And, in the Third Circuit's 
decision in FTC v. AbbVie, the court cited Shire ViroPharma in dicta 
while agreeing, incorrectly, that the FTC cannot sue under Section 
13(b) unless conduct is imminent or ongoing.\35\ Notably, in its motion 
to dismiss the Commission's antitrust complaint, Facebook has cited 
these decisions and argued that Section 13(b) bars the Federal court 
suit.\36\
---------------------------------------------------------------------------
    \34\ FTC v. Shire ViroPharma, Inc., 917 F.3d 147 (3d Cir. 2019).
    \35\ AbbVie, 976 F.3d at 376.
    \36\ Memorandum in Support of Facebook, Inc.'s Motion to Dismiss 
FTC's Complaint, FTC v. Facebook, Inc., Case No. 1:20-cv-03590-JEB 
(D.D.C.).
---------------------------------------------------------------------------
    These decisions hamper the Commission's longstanding ability to 
protect consumers by enjoining defendants from resuming their unlawful 
activities in cases where the conduct has stopped but there is a 
reasonable likelihood that the defendants will resume their unlawful 
activities in the future. These decisions also limit the FTC's ability 
to settle cases efficiently. Targets of FTC investigations now 
routinely argue that they are immune from suit in Federal court because 
they are no longer violating the law, despite the fact that there is a 
likelihood of recurrence, and they make these arguments even in cases 
when they stopped violating the law only after learning that the FTC 
was investigating them.
    Overall, the judicial threats outlined above are grave and, if 
Congress does not act promptly, the FTC's ability to protect consumers 
and execute its law enforcement mission will be significantly impaired.
IV. CONCLUSION
    Throughout the past year, the Commission has worked tirelessly to 
stop bad actors from exploiting the pandemic at the public's expense. 
But the Commission's work is far from over. COVID-related scams are 
likely to persist as the country continues to grapple with this 
pandemic. Combatting these scams will remain a top priority for the 
Commission, and we will continue to use every tool we have to stop this 
predatory behavior, including seeking civil penalties under the newly 
enacted COVID-19 Consumer Protection Act, where appropriate.\37\ We 
also request that Congress act to clarify Section 13(b) of the FTC Act 
and preserve the FTC's ability to enjoin illegal conduct and restore to 
consumers money they have lost. A legislative solution that addresses 
the threat to the FTC's authority to obtain redress for consumers would 
enhance our efforts to protect consumers from COVID-related harms.
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    \37\ Pub. L. No. 116-260, 134 Stat. 1182, Division FF, Title XIV, 
Sec. 1401(b)(1).
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    We look forward to continuing to work with the Committee and 
Congress, and we would be happy to answer your questions.

    The Chair. Thank you, Chair Slaughter. Now we will hear 
from Commissioner Phillips. Welcome, thank you for being here.

 STATEMENT OF HON. NOAH JOSHUA PHILLIPS, COMMISSIONER, FEDERAL 
                        TRADE COMMISSION

    Mr. Phillips. Thank you. Chairwoman Cantwell, Ranking 
Member Wicker, members of the Committee, thank you for the 
opportunity to appear before you. I am honored to testify with 
my fellow Commissioners about the important work we do at the 
FTC.
    Thanks to you, our legal and financial wherewithal to fight 
the wave of scams the epidemic brought with it is substantially 
greater. Fighting bad actions like these are the bread and 
butter of the FTC's Consumer Protection Program and deserve to 
remain a focus.
    I want to spend the few minutes that I have on Section 
13(b), in particular, as it applies to consumer protection. 
Should the court rules us--rule against us in AMG, we will need 
a fix. Without one, in too many cases where money should be on 
the table, it will not be. As you consider a fix, I believe the 
focus should be on helping consumers, not on inappropriately 
punishing businesses.
    In the last few years, some have pushed for more money 
across the board, frequently citing deterrence as the goal. 
Courts have been pretty clear that deterrence is penal in 
nature and I am concerned that disgorgement, in particular, 
will be used as a penalty, especially in cases where consumer 
harm is low. Penalties make sense when you have clear rules. 
Where rules are not clear, penalties do not work well. It makes 
sense to post the speed limit and fine you if you exceed it. It 
does not make sense to announce that you can drive at a fair 
speed, and fine you when you drive over 65.
    This concept is central to the design of the FTC. The 
agency was created to examine business practices, first 
regarding competition, later consumer protection, and where we 
deemed them violative of broad terms like unfair and deceptive, 
condemn them. This broad authority enables us to be nimble, to 
address new issues like privacy, and to help develop the law. 
We can advise Congress, as we did censuring non-disparagement 
clauses, in cases that provided a basis for the Consumer Review 
Fairness Act.
    We can also send a message to the courts, as we did with 
pay for delay agreements, on which we made important progress 
last week in the U.S. Court of Appeals for the Fifth Circuit. 
But because we are enforcing broad terms that give businesses 
less notice, we do not have general penalty authority. On the 
flip side, where a company is subject to an order, or we have 
adopted a rule, or Congress has passed a statute, or we send 
notice under 5M1B. In all of these circumstances, where rules 
are clear, penalties apply.
    Section 19, another one of our tools, provides a contrast. 
Where conduct is fraudulent or dishonest, but they not be as 
clearly defined, equitable money is available. There is less of 
a notice issue because businesses know that fraud can get them 
into trouble.
    We use Section 13(b) to stop harmful conduct in a wide 
swath of areas--fraud, pharmaceutical, antitrust cases, privacy 
and data security, mergers and deceptive advertising. The 
powers that you give us, can and will be applied broadly. But 
the appropriate remedies should not be the same in every case. 
We should have a different result for fraud, for example, than 
we do for data breach caused by unreasonable data security 
practices.
    The equitable remedies, traditionally available to us under 
13(b), are largely developed in cases involving, and perfectly 
suited to, outright fraud. For example, courts developed a 
framework for monetary relief, in which the agency starts with 
a defendant's gross receipts, as a proxy for consumer loss. 
Courts have also held that the agency is not required to offset 
the value of products that consumers receive. For pure fraud, 
it makes sense to ensure that consumers get all their money 
back. In other cases, however, the equitable result might not 
be to return every penny paid. Maybe consumers receive some, or 
even most of the value from the product of service. They ate 
the cereal. They stayed in the hotel room. And equity should 
reflect that fact.
    My concern is that, without additional clarification, in a 
13(b) fix, you will increasingly see the FTC seek to punish 
companies under the guise of disgorgement. For me, the most 
important and pressing concern is the ability, not only to stop 
ongoing fraud, but to get consumers back the money they have 
lost.
    Thank you and I look forward to addressing your questions.
    The Chair. Thank you, Commissioner Phillips. Commissioner 
Chopra, welcome. Thank you for your comments. We look forward 
to hearing them.

  STATEMENT OF HON. ROHIT CHOPRA, COMMISSIONER, FEDERAL TRADE 
                           COMMISSION

    Mr. Chopra. Thank you, Chair Cantwell, Ranking Member 
Wicker, and members of the Committee. It is an honor to be here 
with my colleagues. I appreciate efforts by you all and 
Congress to address the uncertainties surrounding the agency's 
authority under Section 13(b). But of course, we all know that 
a 13(b) fix will not fix many of the FTC's challenges.
    Time and time again, when large firms flagrantly violate 
the law, the FTC is unwilling to meaningfully pursue 
accountability. Take the example of Google, where the company's 
repeated law violations over the last decade were frequently 
met with favorable treatment from the FTC. In 2011, the 
Commission entered an order against Google to halt its unlawful 
privacy practices. But just 1 year later, the FTC announced the 
company violated it. Around the same time, there were growing 
concerns about Google's anti-competitive practices. But in 
2013, the Commission closed its antitrust investigation into 
Google, allowing the company to submit a weird, non-binding 
letter of commitments. In 2014, the FTC announced it caught 
Google breaking the law again, regarding in-app purchases by 
children. But it did not end there. The FTC then caught Google 
engaging in years of illegal surveillance of children on 
YouTube. The Commission's latest resolution, a highly favorable 
settlement, where the tech giant was even allowed to retain 
algorithms enhanced by illegally obtained data by kids.
    While the FTC is quick to bring down the hammer on small 
businesses, companies like Google know that the FTC is simply 
not serious about holding them accountable. We, together, must 
turn the page on the FTC's perceived powerlessness. First, we 
must make clear that FTC orders are not suggestions. Google is 
not the only company to engage in repeat offenses. In 2012, 
after the FTC finalized an Order with Facebook, about it its 
privacy abuses, the company violated the agreement almost 
immediately, over and over again. But in 2019, Facebook was 
able to extract a settlement from the FTC that gave the company 
a lot to celebrate. The FTC did not require Facebook to make 
any material changes to its business model or its user 
surveillance. The FTC even handed out special immunity 
provisions for Facebook's top executives. The settlement was a 
devastating setback for consumer privacy.
    Congress and the Commission must implement major changes 
when it comes to stopping repeat offenders. Since the 
Commission has shown it might lack the will, sometimes, to 
enforce agency orders, Congress should allow victims and state 
attorneys general to seek injunctive relief in court, to halt 
violations of FTC orders.
    Second, we must make sure that the FTC is meaningfully 
deterring wrongdoing in the first instance. The Commission 
often agrees to no money-no fault settlements, even in cases of 
egregious fraud, like, fake review and Made in USA scams, where 
bad actors simply agree to follow the law going forward. And 
when the FTC does seek money from wrongdoers, it can be 
insufficient. Under Section 13(b), if a bad actor defrauds you 
of $1 million, the most they can be required to pay is $1 
million. This is not a deterrent, particularly when the 
probability of getting caught is so low.
    We must take action now to trigger additional remedies, 
such as penalties and damages, without imposing any new 
requirements or uncertainty on businesses. In addition, 
Congress can authorize the FTC to seek civil penalties in a 
broader range of cases, including for knowing violations of 
Section 5, and other dishonest or fraudulent conduct.
    Last but not least, we must address the abuse of Section 
230 of the Communications Decency Act. Tech companies 
aggressively exploit Section 230 to evade accountability. And 
even when the immunity does not apply, the lack of clarity 
taxes public resources and slows down enforcement. I am 
particularly concerned that e-commerce marketplaces are 
becoming a haven for counterfeit and unsafe goods, including 
fake PPE and medicines to treat COVID-19.
    Members of this committee have put forth a number of 
proposals for Section 230 reform, including removal of the 
immunity in laws by civil law enforcement, like the FTC. I 
strongly support Congressional efforts to reign in these 
excesses, which can put brick and mortar small businesses, and 
local newspapers and journalists at a competitive disadvantage.
    In conclusion, COVID-19 and the endless scandals involving 
large technology firms have reminded us, we must work together 
to ensure the FTC has the tools and uses all of them to protect 
American families and honest businesses from these abuses.
    Thank you so much and I look forward to your questions.
    The Chair. Thank you, Commissioner Chopra. Now we will turn 
to our last witness, Commissioner Christine Wilson, who is 
joining us remotely, welcome.

STATEMENT OF HON. CHRISTINE WILSON, COMMISSIONER, FEDERAL TRADE 
                           COMMISSION

    Ms. Wilson. Thank you. Chairman Cantwell, Ranking Member 
Wicker, and members of the Committee, I am pleased to appear 
before you today, albeit remotely. I would like to discuss 
three areas this morning in which Congress can support the 
FTC's mission. By clarifying the FTC's authority under Section 
13(b) of the FTC Act, enacting Federal privacy legislation, and 
approaching the topic of antitrust reform judiciously.
    Recent Federal court decisions have challenged the FTC's 
ability to use Section 13(b) to obtain injunctive and equitable 
monetary relief. Defendants use these challenges--these 
decisions to challenge the FTC's authority in ongoing cases and 
settlement negotiations. We face difficulty prosecuting and 
resolving cases. Congressional clarification of 13(b) would 
help immensely.
    Stakeholders have expressed legitimate concerns about 
13(b). The absence of a statute of limitations can be cured by 
including one in legislation. Concerns about the unfounded use 
of 13(b) to get disgorgement in antitrust cases can be cured by 
setting boundaries on when the FTC will seek disgorgement. The 
factors in the FTC's now rescinded 2003 disgorgement policy 
statement provide a good roadmap. To address concerns about 
13(b) in consumer protection cases involving, not fraudsters, 
but legitimate companies selling legitimate products, albeit 
with deceptive claims, Congress could direct courts to account 
for the value of consumers retained from the product, despite 
the deception. The legitimate concerns of stakeholders can be 
addressed, while also restoring our ability to use 13(b) to 
pursue wrongdoers.
    The second topic I would like to cover is Federal privacy 
legislation. FTC Commissioners, on a bipartisan basis, have 
long urged Congress to pass privacy legislation. Consumer and 
industry groups agree. The first and best option would be for 
this Congress to enact privacy legislation. You are best 
situated to make the value judgments inherent in privacy 
legislation. And we stand ready to assist with implementing 
that legislation through role making and enforcement.
    But what if Congress has other legislative priorities? The 
FTC has been lambasted for not doing enough to protect consumer 
privacy. I disagree with those critiques, but our jurisdiction 
and tools are limited. That said, rulemaking, under Section 18 
of the FTC Act, known as Mag-Moss rulemaking, is within our 
authority. Granted, a Mag-Moss rulemaking is not the optimal 
solution, but in the absence of Congressional action, and in 
the face of continuing harm, including growing infringements of 
our civil liberties, I support Acting Chairwoman Slaughter in 
considering this path. By design, Mag-Moss rulemaking is a 
lengthy and cumbersome undertaking. I would be thrilled to 
undertake the Mag-Moss process, only to have Congress preempt 
that effort by passing privacy legislation. Absent privacy 
legislation, a Mag-Moss process would move us closer to 
providing transparency for consumers, establishing guardrails 
for businesses, and erecting safeguards for our civil 
liberties. But inaction is not an option.
    Finally, I will address calls to overhaul antitrust 
enforcement. Here, I offer a cautionary note. Calls for 
antitrust reform typically are premised on concerns about so-
called Big Tech. But there are many types of concerns, 
including consumer privacy, content moderation, and anti-
competitive conduct. Some commentators aggregate these concerns 
to support breaking up large tech companies. The better 
approach I submit, is to address each concern with appropriate 
tools. Privacy concerns require privacy legislation and content 
moderation concerns may require reforms to Section 230. That 
leaves competition concerns.
    I believe our antitrust laws are sufficiently broad and 
flexible to address the dynamic tech sector. In the 1990s, DOJ 
won its antitrust case against Microsoft, the dominant tech 
firm of that era. Today, DOJ, FTC, and State AGs have filed 
suit against Google and Facebook, using existing antitrust law. 
With all due respect, let us see how these changes go before 
making sweeping changes. This judicious approach is important 
because many proposals threaten to wreak havoc on our broader 
economy by politicizing antitrust enforcement, stifling 
innovation and R&D, and driving prices higher, at a time when 
many of our fellow Americans still suffer economic fallout from 
the pandemic.
    What kind of incentives do we want to create? Incentives to 
invest in R&D and charge low prices? Or to engage in free 
writing and regulatory gamesmanship? I am not saying our 
current approach is perfect. I support retrospectives to 
determine whether we are making the right calls in merger 
review. I support greater transparency on the part of the 
agency, not only when we bring cases, but when we decline to 
bring them. And Congress can play a role by clarifying that the 
same standard applies to FTC and DOJ merger challenges, 
providing more funding for the agencies, including through 
merger filing fee adjustments and giving the FTC authority over 
non-profits and common carriers.
    In closing, we welcome the opportunity to provide technical 
assistance to Congress on these issues, and I look forward to 
answering your questions.
    The Chair. Commissioner, thank you so much, and again, 
thank you to the whole Commission for joining us. And I see 
that you all--well, you are before Congress. Why not take the 
opportunity to be broad on all the things that are challenging 
in your day-to-day functions. So, we appreciate that. But we 
really do want to focus in on this issue of disgorgement and to 
make sure that we really are addressing this appropriately. So, 
I just want to ask all the Commissioners--all of you support 
the FTC's use of disgorgement?
    Ms. Slaughter. Yes.
    Mr. Phillips. Senator, as I indicated in my opening 
statement, I think that there are--disgorgement creates, kind 
of, a problematic model for us. I think restitution is where we 
ought to focus for consumer protection.
    The Chair. So, you do not like the word, but you believe 
that consumers should be compensated for some of the harm.
    Mr. Phillips. Yes.
    The Chair. Thank you.
    Mr. Chopra. Yes. I think when a company violates the law 
and steals from people, or profits from it, the least we should 
do is make them forfeit that.
    The Chair. Commissioner Wilson?
    Ms. Wilson. Yes. I support monetary redress----
    The Chair. OK.
    Ms. Wilson. For consumers.
    The Chair. Great. So, the reason I am saying this is 
because, one thing I want to point out is that, if the Supreme 
Court makes a decision and we need to do something to further 
clarify the law, I do not want to spend a lot of time. Now, 
having seen these COVID cases in my state, I--in the fraud 
cases, I should say. I do not want to leave a lot of time to go 
on. I do not want a free reign atmosphere. So, Chair Slaughter, 
how do you think we best address that? Would you say you and 
the Commissioners are pretty much in sync about the solutions 
there?
    Ms. Slaughter. Well, thank you for the question, Madam 
Chair. Listen, we have a Commission full of smart, engaged 
people who have different views on a number of topics, but 
also, a fair amount of common ground. And I think we can offer 
you our individual views, and we can defer to Congress in terms 
of making the determination.
    But where I think we all agree, and I will certainly 
capitalize on what you said, is the need to act quickly. Even 
while the Supreme Court case is pending, the uncertainty around 
13(b) is affecting our work and affecting our cases. It is 
making it harder for us to get that redress to consumers. It is 
outright barred in some circuits, and other defendants are just 
saying, let us wait and see. We do not want to negotiate. We do 
not want to get into these conversations. It is making it 
harder for us to stop illegal conduct, and it is making it 
harder for us to make your constituents whole, when they have 
been harmed.
    So, I would certainly urge you to act quickly and act 
comprehensively, to make sure that we are providing relief to 
consumers and, as my colleagues have indicated, deterring 
illegal behavior. Because what we really want is for consumers 
not to get hurt in the first place,
    The Chair. Exactly. Thank you, that is so well said. I have 
had my own experience with another agency, the Federal Energy 
Regulatory Commission, on the Enron cases and literally, people 
were not implementing rules against market manipulation. So, we 
gave them a new authority and they used it. And guess what? 
They better policed the markets. And so, I think these are 
important tools.
    So, I hope--I appreciate the letter from the Chamber, but I 
hope they are not insinuating the first time COVID authority 
should not have been passed. I am assuming, Commissioner 
Phillips, you support the first-time authority. I do not want 
to take up too much time, but you support that first time 
authority on COVID penalties, that we gave the Commission?
    Mr. Phillips. I do. I thank you for it. I recently voted 
for the case where we used it.
    The Chair. Right. So, my point is, this kind of strong tool 
can be a big deterrent in a marketplace where there are so many 
legitimate actors, and yet, there are some bad actors that 
plague the whole sector. And so, I very much--I want to get 
everybody on the data security rulemaking, if I could. Does 
everybody support a data security rulemaking by the FTC? 
Commissioner Slaughter?
    Ms. Slaughter. I do. I think it is something we need to 
explore.
    Mr. Phillips. I would prefer if Congress would pass a data 
security statute, but I would support, you know, subject to the 
meets and bounds of the rule, a rulemaking.
    Mr. Chopra. Yes. I think we need to codify rules that give 
clear sense of what is expected and trigger real consequences 
for violations.
    The Chair. Thank you. Commissioner Wilson?
    Ms. Wilson. Yes, I would absolutely support Acting Chair 
Slaughter moving forward with a Magnusson-Moss rulemaking on 
consumer privacy and agree with Commissioner Phillips that 
having Congress move forward with Federal privacy legislation 
would certainly be the optimal solution.
    The Chair. Yes, I was asking----
    Ms. Wilson. But as a fall back.
    The Chair. I was asking about data security. Listen, 
Senator Wicker and I are doing our best to solve a lot of very 
thorny problems of the information age. I guarantee you it is 
bigger than both of us. It is going to take a lot of--a lot of 
effort to get the context. I actually do not think the policies 
are that are hard. It is just the context, right? The context, 
just as we did moving quickly on COVID because everybody came 
to an agreement. Oh, this is absurd to allow people to go 
around and market this in the middle of a pandemic, right? So, 
we all came together. That was pretty easy. You know, in the 
privacy case, the information age is playing out. But--no 
doubt.
    But so--but, Commissioner, I was asking, actually about 
data security, as opposed to the large privacy context. Are you 
for a rulemaking by the FTC, with or without Congress' help, 
for data security?
    Ms. Wilson. Yes, I would support that.
    The Chair. Thank you. Senator Wicker.
    Senator Wicker. Well, thank you, Madam Chair. This letter, 
dated April 20, is now a part of the record. And it is a bit 
unfair because the Commissioners have seen it only briefly 
before the hearing began. But let me just ask--maybe I will 
start with you, Commissioner Phillips. The letter says, ``The 
issue for the FTC is that the text of the statutes allow the 
FTC to seek and courts to grant monetary relief only under 
Section 19, not Section 13(b). By using--'' It goes on to say, 
``By using 13(b) the FTC has foreclosed its ability to seek 
monetary damages''. What do you say to that?
    Mr. Phillips. I think, to some extent, what the statutory 
text says is what the court is going to decide in AMG. I think, 
for our purposes, the question is under what circumstances we 
should get money and how it should be calculated. Where I--just 
based on my brief review of the letter, I do not think money 
should be limited to fraud cases.
    Senator Wicker. But does the use of 13(b) foreclose the 
Commission's ability to seek any monetary damages?
    Mr. Phillips. That is not the position we have taken in 
court, no.
    Senator Wicker. Madam Chair?
    Ms. Slaughter. No, I do not think it does. And I would just 
note, I have not had a chance to review the letter in detail, 
but even just skimming it, I see a number of really problematic 
assertions and interpretations of the law, with which I think, 
at least I strongly disagree, and I----
    Senator Wicker. But--and let me just ask you to do that on 
the record. But with regard to that sentence, that the courts 
can grant monetary relief only under Section 19. By using 13(b) 
you foreclose the ability to seek monetary damages.
    Ms. Slaughter. Candidly, Senator, I do not really 
understand what that means.
    Senator Wicker. OK, I see, all right.
    Ms. Slaughter. So, I would have to review it and understand 
the argument a little better.
    Senator Wicker. No, again, it is fair for you to, all four 
of you to respond on the record, and so, I ask you to do that. 
Well, disgorgement versus restitution versus compensation. Help 
me real briefly, Commissioner Phillips, is there a distinction 
there? Or are all four of you on the same page, in terms of the 
way we write this?
    Mr. Phillips. I think colloquially, at least the way I am 
using disgorgement, we are talking about the disgorgement of 
ill-gotten gains. It is the profits. There is a difference 
between that and restituting to consumers, redressing them for 
the harms that they have suffered.
    Sometimes these are the same numbers, right? Every money I 
pay into a fraud, there is no value. But you were asking the 
question earlier about, sort of, legitimate businesses. If I 
sell you a hotel room--I will take the Wyndham case. I sell you 
a hotel room for a night, but you do not have adequate data 
security. The harm that you suffer, right, is the hotel room 
minus the data security, starting as the courts have us do in 
the context of fraud under 13(b), with 100 percent, the whole 
value of the hotel room. I do not think that is the right way 
to do it.
    Senator Wicker. Mr. Chopra, are you and Commissioner 
Phillips having a little disagreement about that distinction?
    Mr. Chopra. Well, I guess it is--I think the definition is 
right. I agree with him. I think, in my view, when a company 
has egregiously violated the law, we might not always be able 
to figure outsee who the specific victims are. But that does 
not mean they should be able to get--you know, keep some of 
those ill-gotten gains.
    The FTC, I mean, many of its Made in USA fraud cases, for 
example, accompany labels of good as Made in America, but it is 
really made in China. We often give these, kind of, no money 
orders in the past, because it is hard to figure out who the 
victims are. But in my view, of course, they should have to 
forfeit the gains from this illegal practice, and even pay 
penalties.
    Senator Wicker. OK. Now, let us start--let me--let me ask 
Commissioner Wilson a different question. And goodness, we only 
have a minute here, but Commissioner Chopra mentioned, very 
emphatically, mishandling by this Commission and the Google 
matter and the Facebook matter. And I want to see if we can get 
responses. It may take longer than that, Madam Chair. But 
particularly, from Commissioner Wilson and Commissioner 
Phillips. What do you say to the very emphatic statements that 
Commissioner Chopra made about the Facebook and Google 
decisions?
    Ms. Wilson. Thank you for the question. Senator Wicker, I 
have not reviewed in detail the 2013 recommendation memos to 
the Commission from the legal and economic staff. But I would 
like to make clear that a staff recommendation memo is not the 
end of my inquiry when I decide whether I will support a staff 
recommendation. I typically review the testimony and the 
documents that are cited in the recommendation memos. I review 
submissions from the parties. And I have significant 
interactions with staff, in terms of oral briefings and the 
parties, in terms of their advocacy.
    So, even if I had spent a fair amount of time with the 
memos that have now been published, I do not have all of the 
information I would require to determine whether the earlier 
Commission decision was correct. And I would say there is a 
risk when reassessing a recommendation many years later. At the 
time, many decisions regarding competition cases, there is an 
assessment of likely future events. There is uncertainty 
regarding the outcome of those future events. And so, when 
reviewing a case recommendation many years later, we have the 
benefit of seeing the actual outcomes and the later known 
outcomes may mask the true level of uncertainty that was 
important when the decisions were made.
    Senator Wicker. Commissioner Phillips, respond, if you 
will, to what Mr. Chopra said.
    Mr. Phillips. Sure, and just to clarify, my understanding 
about your question is, you are asking about the settlement of 
the Google YouTube case, the COPPA case, and the Facebook 
privacy case.
    Senator Wicker. I am asking you to respond to the testimony 
of Mr. Chopra.
    Mr. Phillips. Sure. In those cases, which were penalty 
cases, in one case because of a rule applying to COPPA, and the 
other one an FTC order, penalties are appropriate and the 
amounts that we collected exceeded any reasonable estimation, 
in my view, of the profits of the companies. The 13(b) question 
is different because we are not looking at the same scenario. 
We are not looking at those clear rules. And in my view, I 
think we ought to aim at redressing consumer harm. That ought 
to be our lode star.
    Senator Wicker. Well, OK. Madam Chair, I have exceeded my 
time. Let me make an observation. The Commissioners typically 
submit a unified statement for the record as witness testimony. 
Which it does indicate the matters on which they agree. But 
then, they come in here and their testimony, while tactful and 
ladylike and gentlemanly, is far different. And it would just 
seem to me that it would be helpful to me, as a member of the 
Committee, if we got in advance, as we usually do with other 
Commissions and with other panels, a real sense of the 
differences of opinion. And I will not ask you to rule on that, 
because I do not know that we can. But to me, it would be 
helpful if Commissioners would submit the real testimony that 
they are going to give, so that we have a chance to go over 
that and try to be prepared for the give and take.
    So, thank you, Madam Chair.
    The Chair. Well, I thank you, Senator Wicker, for that 
observation. And I think I am understanding your point, or at 
least, I should say that my interests are to move quickly, if 
the Supreme Court does act on this case because you can have 
lots of things struck down for a variety of reasons. Does not 
mean you still does not believe in the authority. That is why I 
have asked the Commissioners whether they all believe in this 
authority. They do.
    The question is, what is the legal framework for it and, 
yes, I think it is astounding that Facebook has paid $5 billion 
in fines. But that is based on previous orders by the FTC that 
they then violated and were, in other instances of the law, 
that were violations. So, yes, I think we have to be clear what 
we are talking about, as it relates to 13(b), the right legal 
framework if we need, you know, difference. But, to me, the 
case law is there and very relevant. This has been a tool that 
has been used for decades. We certainly do not want to throw it 
out. I have anxiety over the fact that we could have 
disagreement about this.
    So, yes, I agree that getting the Commission to, at least, 
look at language, if we ended up having to propose it instead 
of them coming up with it. Which, you know, you cannot say that 
it is really their function. I mean, they should be doing 
rulemaking, in my opinion. So, yes, they could also give us 
fixes to 13(b). But if they do not, I guarantee you we will 
propose something and ask them for their input. And yes, we 
should have it in advance of having a formal discussion. So, I 
agree with your main point there. So, I do think that this is 
very important and very timely, so----
    Do we have--Senator Fischer is next.

                STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. Thank you, Senator Cantwell. The COVID-19 
pandemic caused incredible challenges this past year. One thing 
that kept spirits up, though, was cheering on our college 
sports teams from home. So, the student athletes across the 
country continued to train and compete during these difficult 
circumstances, when they could, often while wearing masks or 
with empty stands.
    Last year, former FTC Chairman Simons issued supportive 
words for national Name, Image, Likeness legislation for 
student athletes. He stated his long-standing concern the 
students are not getting what they should get, in terms of 
compensation. Ms. Slaughter, do you share this concern, 
particularly given existing FTC authorities should protect 
student athletes under SPARTA?
    Ms. Slaughter. Thank you, Senator, for the question. Yes, I 
am very concerned about exploitation of student athletes.
    Senator Fischer. Thank you. Commissioner Phillips, as 
states continue to enact NIL legislation to ward off recruiting 
disadvantages, do you believe a uniform national framework 
could effectively protect student athletes?
    Mr. Phillips. Yes, I do, Senator.
    Senator Fischer. Thank you. Ms. Slaughter, in remarks you 
made back in February, you highlighted the need for strong data 
privacy legislation at the Federal level, that the pandemic 
only pushed more of our work, our children's education, and 
even our personal interactions online, exasperating data risks. 
I appreciate the FTC's work to use its existing authorities to 
guard against consumer harms in this space. However, in what 
key ways could passage of a Federal data privacy law strengthen 
how the FTC protects privacy? And does passing such a law 
remain a priority for you?
    Ms. Slaughter. Thank you, Senator. I take very seriously 
our obligation to look at the authority Congress has already 
given us, as Chair Cantwell reflected, and make sure we are 
using it as well as we can. And to that end, the authority that 
we have to look at privacy issues right now, from a rulemaking 
perspective, would be under Section 18 or the Magnuson-Moss 
Act.
    I agree with what Commissioner Phillips said earlier, that 
clear rule are good. They are good for businesses. They are 
good for consumers. It is valuable to have clear rules for the 
marketplace. So, I want us to use the authority that Congress 
has already given us, as well as possible. But, as Commissioner 
Wilson noted in her opening, the rulemaking authority we have 
under data privacy right now is much more cumbersome than the 
traditional Federal rulemaking authority under the 
Administrative Procedures Act.
    And so, I would very much appreciate, and continue to think 
it is a priority for Congress to pass data privacy legislation 
that would give us more clear rulemaking authority, impose 
civil penalties on violators for all the reasons Commissioner 
Chopra and others have discussed, that penalties can really 
incentivize compliance, which is what we want. We do not want 
companies to violate the law to begin with. And then, I also 
think it is important for Congress to consider how meaningful 
limitations on how data is collected and used are important, 
rather than leaving us stuck in a notice and consent framework, 
which is how most of our law operates today. I think that that 
inadequately protects consumers, puts too much burden on them, 
and allows violations to continue rather rampant in the 
markets.
    Senator Fischer. You spoke of the usefulness of the FTC 
requiring consumer notice in recent privacy cases that involve 
that false marketing. And you stated that notice can be 
effective in letting consumers vote with their feet. However, 
does the effectiveness of notice, in this scenario, depend on a 
marketplace that has healthy competition?
    Ms. Slaughter. Yes, Senator, that is exactly right. And 
this is actually why I think we cannot fully separate our 
consumer protection mission from our competition mission. I 
think that these issues are very much intertwined. And when 
there is not healthy competition in a market, then consumers do 
not have any choice but to consider to use a particular product 
or service, even if the terms of that use are things with which 
they are uncomfortable. So, I think you are right that these 
issues are very closely connected.
    Senator Fischer. Thank you. Thank you, Madam Chair.
    The Chair. Thank you, Senator Fischer. Well, that brings up 
a question, as it relates to--at what point--so, I asked 
everybody whether they supported doing a rulemaking on data 
security and everybody said yes. OK, but obviously, you do not 
have one. So, now we have also had a discussion about what you 
have and do not have, as far as a framework. And you would 
rather us have a framework. I agree. We should give those 
frameworks. But then, there becomes a role and responsibility 
for all of you to act in doing your job.
    So, this question by Senator Fischer, like, well, what is 
going to--you know, where do you draw the line? So, I do not 
know but maybe we will start with you, Mr. Chopra.
    Mr. Chopra. Yes, Senator, I think we----
    The Chair. So, if you all want to and we are not giving you 
that framework, then why not do it? At least as it related to 
that very narrow thing. And the reason why I say that is 
because I think everybody is pretty uniform across the United 
States of America that thinks that data security and data harm 
is happening to them, when you think of the Equifax and the 
Multiplicity of things. And I think that the Federal Trade 
Commission has done some great work, as it relates to telling 
companies, this is not acceptable data security hygiene for a 
company handling this much data and information, on behalf of 
consumers. You cannot have, you know, three junior IT people 
running data security for you. You have to build an 
infrastructure.
    So, the Commission has been good about that, but why not 
just keep going? If this is such a large issue, and you all 
have answered yes, why not keep going?
    Mr. Chopra. Yes, Madam Chairwoman, whether it is Equifax, 
Marriott, or so many others, this is not just about identity 
theft. This is also about Chinese state surveillance. There is 
more and more attacks that are more national security oriented, 
and the harms are very great. I say, we should have started 
already. And, Madam Chairwoman, Ranking Member Wicker, if 
Congress passes a law, that is good, too. But I think getting 
started quickly will even help us implement any law that 
Congress might pass, or we may use our own authorities to move 
forward.
    The Chair. Thank you. I think we have Senator Tester is 
next. Senator Tester? Or is Senator Tester with us?

                 STATEMENT OF HON. JON TESTER, 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. OK, sorry--sorry about that, Madam Chair. I 
assumed I was way down the list. But thank you very, very much. 
I appreciate the opportunity.
    So, this is a question for the panel. Look, the scams 
around COVID have been amazing. You guys, probably, are fully 
aware of them, requesting personal information and $50 for a 
home test, and, you know, money for this, money for that. And 
there are a number of bills up there. But the fact is, Montana, 
my state, is a large population. We tend to be a little 
elderly, a lot of veterans, homes with limited amount of access 
to the internet, in some cases. Many of the reported scams in 
Montana happen via telephone and some phony contract. Look, you 
get it. It stinks. It smells. I do not know what kind of vermin 
do this kind of work, but we have got to get our arms around 
it.
    So, my question is, how is the FTC planning to reach rural 
consumers to educate them about these COVID-19 scams? Who wants 
to go first? Any of you?
    Ms. Slaughter. Thank you, Senator. I am happy to start with 
the answer to that question. I think you are right. The COVID-
19 scammers, like all other scammers, are preying on our most 
vulnerable populations. That includes veterans. It can include 
people in rural communities who are harder to reach. And so, 
making sure that our outreach efforts are targeting those 
populations, in addition to our law enforcement efforts, is a 
real priority for us.
    In terms of reaching rural populations, we have, in 
addition to doing all of our online outreach, we have also sent 
physical post cards out. We recently set up a community 
advocate center to make sure that our work and our resources 
are accessible to people who are not following our blog posts 
or engaging with us on Twitter. So, working with advocates is--
and working with state attorney's general and making sure we 
are understanding what is going on in communities across the 
country, so that we can respond appropriately, is very much 
incumbent on us.
    And I would just add that there was particular money 
dedicated, in the American Rescue Plan, COVID money to do some 
of this outreach and that is one of the things that we are 
putting to work right away.
    Senator Tester. Anybody else want to----
    Mr. Phillips. Sure, Senator. I agree with everything the 
Acting Chair said. Very quickly, when the pandemic began we 
started doing events, also, with AARP, with the EJCC, 
stakeholder groups that are particularly focused on 
communicating to the elderly. That new money that you approved, 
and we all thank you for it, just to elaborate a little bit on 
what the Acting Chair said, that money goes to printing books, 
right? And creating advertisements that we can send to all 
sorts of stakeholders to help get messages out, to protect 
themselves from scams against identity theft. It is very 
important.
    Senator Tester. OK. I am going to move on to my next 
question, because I am limited in time. Before I leave, though, 
I just want you to know, I get probably six phone calls a day 
on this thing, robocalls. And please figure out how we can 
knock these guys down. I mean, it is unbelievable. I got one 
yesterday that was just over the top bad. So, if you could help 
on that.
    Look, I am a farmer. I go back every weekend. I have been 
farming since I was basically 15 years old. I used to be able 
to take a pair of pliers and a screwdriver and work on my 
tractor. Now, if my tractor breaks down, I have to call the 
dealer because I do not have the software or the programs. They 
have a, I guess, a patent on that stuff, so that I cannot fix 
my tractor, OK? And we have got bills to fix this, but I am 
wondering what the FTC has done to protect consumers from anti-
competitive policies on right to repair, since we spoke last 
August?
    Mr. Chopra. So, Senator, I am happy to start. The FTC has a 
law called the Magnuson-Moss Warranty Act, which prevents some 
of the anti-competitive tying. I think we need to start ramping 
up our enforcement there because, clearly, there are those who 
are breaking the law. But, Senator, we will also be doing more 
on this, in my view, to tackle places where the law does not 
cover. This is not just about tractors. It is about our 
electronics. It is even about military equipment, and even 
manufacturing and service equipment in medical facilities. We 
have to take this on, and we have to do it quickly.
    Senator Tester. Anybody else?
    Ms. Wilson. Yes, Senator Tester, this is Christine Wilson. 
Sir, you and I talked last year during our oversight hearing 
about our struggles to fix tractors and chippers. I absolutely 
agree with you that this is an issue during the workshop that 
we held with a variety of different stakeholders. We received 
valuable input on this issue.
    I agree with Commissioner Chopra that we should be looking 
to use both our consumer protection and our competition 
enforcement to address these issues. I believe that, too 
frequently, we have competition issues, efforts by 
manufacturers to limit downstream competition for the repair of 
vehicles and electronics, and those are dressed up as consumer 
protection issues. I think we need to pierce that veil and move 
forward with enforcement on the antitrust side and the consumer 
protection side.
    Senator Tester. Well, I want to thank you, Ms. Wilson and I 
want to thank you, Mr. Chopra, for your responses to that. We 
just need to do something because there is so much 
consolidation going on in rural America right now. And I know 
Mr. Chopra talked about, you know, medical communities, and all 
that, and that is very, very important, also, probably just as 
important. But if we want to have people live in rural America, 
we have got to stop crap like this, or it is just going to 
further evacuate rural America.
    Thank you, both. Thank you, Madam Chair.
    The Chair. Senator Moran is next.

                STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran. Chairwoman Cantwell, thank you very much. 
Pleased to have the FTC in front of our committee today. Thank 
you for making that possible.
    Commissioners, earlier this year you announced legal action 
against three brokers based in New York, who allegedly used 
automated software to illegally buy tens of thousands of 
tickets for concerts and sporting events, and then, resold them 
at higher prices. This action represents the first ever 
utilization by the FTC of the authorities provided to it under 
the BOTS Act, which I introduced with Senator Schumer and it 
became law in 2016. So, first of all, thank you for utilizing 
the authorities we granted you. The question, it could be for 
all, but I have several other questions I would like to get to. 
I would just like an update. Do you have the necessary 
authorities that you need to pursue these kind of price gouging 
opportunities? This unfair trade practice, exhibited by those 
who buy things and sell them at much higher prices, utilizing 
the computer?
    Ms. Slaughter. Thank you, Senator. As you know, this is an 
issue that is close to my heart, as well, and I was really 
happy that we were able to bring these cases. It is another 
example of Congress speaking recently, telling us that 
something is a priority, giving us authority, and us going out 
and using that authority as Congress intended. Hereby, using 
civil penalties to make sure that the cost of breaking the law 
is higher than the benefit that the companies derive from it. 
So, you have given us that authority, in this particular case, 
and we are going to continue to look for ways to use it, and we 
appreciate it.
    Senator Moran. So, you have what you need, Commissioner?
    Ms. Slaughter. I think on these questions, particularly 
about BOTS, yes. I do not think that that gets, necessarily, to 
the entirety of the issues in the ticket markets, which also 
implicate competition concerns, as well. But that is where we 
need to be applying our antitrust tools, as well as our 
consumer protection tools.
    Senator Moran. Me and my staff welcome any input that you 
would have in how we could be of help in that regard.
    My state, like many, earlier this year experienced severe 
cold weather. It occurred in the month of February. It drove up 
increased demand for natural gas throughout our region. This 
weather left--that weather impacted municipal gas utilities in 
their communities, who had no choice but to purchase gas at 
significantly inflated prices, by the magnitude of hundreds of 
the percentage more than the normal cost at that time of year. 
And now, we are left with the consequences of trying to pay 
those bills. In February--February 22, the Energy Regulatory 
Commission--Federal Energy Regulatory Commission, FERC 
announced an investigation. I am just interested, Chairwoman 
Slaughter, is there any interest in this topic at the FTC?
    Ms. Slaughter. Thank you, Senator. I think it is fair to 
say that energy markets are important to us for a number of 
reasons. And what you are talking about, particularly, sounds 
to me a lot like price gouging, which is a real problem, one 
that has not historically been addressed under the FTC Act. But 
I am very interested in making sure that we are really using 
the full breadth of the law that we have to attack market 
practices that are unfair to consumers as a method of 
competition. And price gouging can sound in that space, as 
well. So, I think it would be a new effort for us, but that 
does not mean it is not one that we should explore.
    Senator Moran. I think Senator Blumenthal and I have 
explored this topic of price gouging with the FTC before and 
maybe it was also in our appropriations process with the FTC 
before us. But again, let me know, or my staff know, if there 
is something that you would request of me.
    Finally, 13(b) authority, there is a case pending before 
the Supreme Court that could severely impact the FTC's ability 
to obtain monetary relief, when the Commission has reason to 
believe a company is violating, or is about to violate, a FTC 
statute--a statute that the FTC enforces. If the FTC's 
understanding of Section 13(b) is held by the Supreme Court to 
be incorrect, there will be a significant impact on the FTC's 
ability to force companies to pay restitution to defrauded 
customers. While the FTC will still be able to get an 
injunction against a company's behavior, it would no longer be 
able to collect those damages.
    While the FTC's 13(b) authority has been debated in recent 
months, I propose to give the FTC other important authorities 
to enforce privacy obligations in my Consumer Data Privacy and 
Security Act, introduced last year, soon to be reintroduced 
again, with continuing efforts with Senator Blumenthal, to see 
if we can find a bipartisan solution, along with Senator 
Cantwell, to accomplish that. That legislation includes first 
time civil penalty authority and new rulemaking powers.
    How important is it for these new authorities to the FTC's 
ability to be able to enforce Federal privacy law? And do you 
support the inclusion of new authorities in Federal privacy 
legislation?
    Ms. Slaughter. Thank you, Senator. I would be happy to 
review the specific provisions of the Act--the bill that you 
are talking about. But as a general matter, yes, I think new 
authorities, new remedies, would be very helpful in Federal 
data privacy legislation.
    Senator Moran. Are you prepared to ask Congress to respond, 
should the Supreme Court rule in a way disfavorable to the 
authorities the FTC currently believes it has?
    Ms. Slaughter. Yes. In fact, Senator, we have already asked 
Congress to respond. The five sitting FTC Commissioners, on a 
bipartisan basis last fall, all wrote together to ask you to 
act quickly to restore the 13(b) authority. Chair Cantwell has 
talked already this morning about the importance of acting 
quickly. And I would just encourage you not to wait for the 
Supreme Court to rule because the uncertainty around our 13(b) 
authority is already affecting our cases and hurting consumers.
    Senator Moran. I would express to you and to Chairman 
Cantwell, Ranking Member Wicker, that I am certainly prepared 
to engage in that process.
    The Chair. Thank you.
    Senator Moran. Thank you all for being with us this morning 
and I look forward to seeing you in person in the future. Look 
forward to seeing you in front of our Appropriations 
Subcommittee as we determine, not only the authorities in the 
Commerce Committee, but the funding in the Appropriations 
Committee for the FTC.
    The Chair. Thank you, Senator Moran. Senator Klobuchar.

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Chair Cantwell and 
thank you to all of you Commissioners.
    I know this was brought up by you, Chair Slaughter, and 
that is the resource issue. As we are looking at the FTC, which 
I am pleased that you are doing this, taking on these tech 
cases and specifically the Facebook case--not to mention all 
the other work you have right now--I believe that we cannot 
take this biggest companies in the world on with duct tape and 
Band-aids. And that is why Senator Grassley and I actually have 
a bill to change the merger fees and the way that they have 
been assessed. And we have not done this for decades and he is 
firmly behind this bill, as are many other Republicans and 
Democrats, which actually lifts the burden on some of the 
smaller companies merging. But on the mega mergers, $5 billion 
and over, adds fees so that it would bring in significant money 
for your agencies.
    And just to understand, as I make the case for this bill, 
which I believe may be moving faster than we thought, it seems 
merger filings are starting to bounce back. What are your 
expectations regarding the FTC's merger review workload over 
the next 12 months? Guess I would ask you, Chair.
    Ms. Slaughter. Thank you so much, Senator, for the question 
and for your support and interest in these issues. You are 
absolutely right about the scope of the work in front of us, at 
the cost of doing it, and the demand on our resources. As I 
pointed out in my opening testimony, even before a recent 
merger wave that we are now in, we have had--we have been 
averaging about twice as many merger filings annually as we did 
10 years ago, and our employee count has remained flat. That 
means twice as much work for the same amount of people. That is 
difficult.
    And then, in the last--over the last year, we saw a dip in 
merger filings through the beginning of the pandemic. But over 
the last, I would say, 6 months, they have been extraordinarily 
high. We had over 300 filings in the month of March. That is 
the second highest number, second only to over 400 in the month 
of November. And so, these numbers are continuing. They are 
continuing to be high, and it is not just high numbers of 
filings. That is, sort of--you know, if you think about simple 
statistics and proportions, that also means more cases that 
require enforcement action. We do not want to leave any of 
those cases on the table, and so, your work is really helpful 
to getting us there.
    Senator Klobuchar. Thank you. Well, we are hoping to move 
this quickly and, as you know, we have had wide bipartisan 
support for it.
    Commissioner Chopra, you have done a lot on privacy, along 
with many of the Commissioners and along with our Chair, 
Senator Cantwell, Senator Blumenthal, and many others. Do you 
believe the FTC needs rulemaking authority to ensure that the 
agency is equipped to serve as the primary enforcer of Federal 
privacy legislation? Just talk a little bit about that.
    Mr. Chopra. Yes, we have some. We need enhanced one if we 
could. It will move faster that way. And ultimately, we need 
rules that are easy to follow, easy to enforce, and that can 
trigger real penalties for those who violate the law when it 
comes to invading our privacy. I think our no money 
settlements, when it comes to privacy violations, have not 
really deterred misconduct, particularly from the biggest tech 
companies.
    Senator Klobuchar. And do you agree that consumers should 
have the ability to access their data and control how it is 
used, including the right to opt into their sensitive personal 
data being used?
    Mr. Chopra. Consumers need a lot more rights, particularly 
when it comes to control and there needs to be a lot more 
accountability for those who violate it.
    Senator Klobuchar. Very good. Anyone can take this, but 
could you elaborate on the FTC's enforcement efforts and how 
they would be hampered if they--if you lost the power to seek 
disgorgement and what effect on consumers that would be? I do 
not know if you want to take that Commissioner Phillips, 
Wilson, whoever would like to answer that.
    Mr. Phillips. Thank you, Senator. Let me focus, in 
particular, on the redress of losses that consumers experience. 
I think we are seeing today pushback from companies because of 
the legal uncertainty of 13(b). I think, if the court rules 
against us, we are going go to be unable to give people back 
money that they have lost, and that is authority that we should 
have.
    Senator Klobuchar. Exactly, and that is--you are talking 
here about this 9th Circuit case. Correct, I think if 9th 
Circuit is affirmed, the FTC could seek, sorry, disgorgement, 
but the 7th Circuit disregarded years of precedent when it said 
that Congress did not provide for monetary relief, and now the 
3rd Circuit has agreed. So, we have got a major situation going 
on.
    Mr. Phillips. Well, as you know, Senator, there are a bunch 
of different cases dealing with several different issues. So, 
there is the availability of money, there is the timing of when 
we can go in and use 13(b). I think we are going to get some 
clarity, one way or the other, in AMG. And I think, if we do 
not get the answer that we want, we definitely are going to 
need a fix from you.
    Mr. Chopra. Senator, briefly, a court actually set aside a 
$448 million judgment against a pharmaceuticals company that 
engaged in an anti-competitive scam and that money is now not 
recoverable. We do need Congress to act, and we do need the FTC 
to really live up to hold some of these large firms 
accountable.
    Senator Klobuchar. So, what you are saying to me is, maybe 
instead of using fancy legal terms, like disgorgement, we 
should actually talk about the actual money that should be 
going to help consumers. Thank you for that advice.
    Thank you, everyone.
    The Chair. Thank you. Senator Cruz.

                  STATEMENT OF HON. TED CRUZ, 
                    U.S. SENATOR FROM TEXAS

    Senator Cruz. Thank you, Madam Chair. Welcome, 
Commissioners and it is always good to see the FTC here. I 
spent two wonderful years at the FTC. There are a lot of 
terrific men and women who work there at the Commission.
    As you know, I have deep, deep concerns, in particular 
about Big Tech. I think Big Tech today represents the greatest 
accumulation of power--market power and monopoly power over 
information that the world has ever seen. And the players in 
Big Tech are getting more and more brazen. They behave as if 
they are completely unaccountable and, at times, they behave 
more like nation states than private companies. I think the 
Commission has not done nearly enough to reign in the abuse of 
power of Big Tech.
    When it comes to content moderation, they are absolutely a 
black box. They refuse to answer questions. In the Senate, we 
have promulgated questions to Big Tech over and over again 
about their content moderation decisions. Who are they 
blocking, specifically? What are the numbers? Under what 
circumstances? What are the remedies? What is the 
decisionmaking? And Big Tech's standard answer to all of that 
is essentially, jump in a lake. That they do not have to 
answer.
    We saw, before the prior election, Big Tech take an even 
greater step and block the New York Post. Shut down the 
Nation's fourth largest print newspaper, because Big Tech 
disagreed with a story that they had put out. That market 
power, with zero transparency and zero accountability, I think, 
it is dangerous. And I think it is dangerous for free speech. 
It is dangerous for free and fair elections.
    In your collective judgment, what can and what should the 
Commission do to reign in the abuse of power for Big Tech?
    Mr. Chopra. Senator Cruz, there is no question that these 
firms wield enormous power over our lives, over our economy, 
and over our democracy. I was happy that the FTC voted to issue 
a complaint against Facebook and its anti-competitive 
practices. But it is clear, there was a lot of missed 
opportunities to reign it in before. And local journalists, 
media have been destroyed by many of these practices.
    We have to do more. Congress has to do more when it comes 
to abuses of Section 230. And we also have to get to the bottom 
of the black box algorithms that they have. The FTC has issued 
some orders to understand some of those content curation 
practices, how those algorithms make decisions, and ultimately, 
we need to hold them accountable for when they violate the law.
    Ms. Wilson. Senator Cruz, this is Christine Wilson. If I 
can have just a moment to respond, as well. I agree with you 
that there are significant concerns about content moderation, 
content curation. As Commissioner Chopra indicated, 
Commissioner, now Acting Chair Slaughter, and Commissioner 
Chopra and I worked together to design the 6(b) study that 
Commissioner Copra referenced. And I think that is, perhaps, 
the most important task that the FTC is undertaking right now.
    As to the question of whether the FTC currently has 
authority to address these issues. Can content suppression be 
an unfair practice under our Consumer Protection and 
Competition Mandates? I believe that if firms act in ways that 
are contrary to their material representations, or terms of 
service, it could be an unfair or deceptive act. I do not want 
the FTC to be the speech police. We are not equipped to judge 
political speech. But it is within our authority to determine 
whether companies are living up to their promises to consumers.
    As for questions of unfair competition. If firms agree to 
censor a specific and disfavored perspective, it could raise a 
question of whether there was an illegal agreement, under 
Section 1 of the Sherman Act. So, for example, if different 
social media companies take down similar content in the same 
24-hour period, that could raise a question about whether 
companies reached a potential illegal agreement behind the 
scenes, to silence certain perspectives. Obviously, parallel 
conduct is necessary, but not sufficient, to prove an antitrust 
violation. But I would be interested in taking a look at some 
of these simultaneous takedowns to determine whether there is 
an underlying agreement that was driving those actions.
    Ms. Slaughter. Senator, I just wanted to add that I agree 
with you that we need to be really concerned about the exercise 
of market power by these extremely large companies. I think--I 
was pleased to support the complaint we had against Facebook. I 
share the concerns Commissioner Chopra articulated earlier 
about our resolutions of the order enforcement case against 
Facebook earlier, and the YouTube case against Google, because 
I was concerned that it would not adequately incentivize 
companies to start following the law. Neither of them would 
adequately incentivize companies to start following the law.
    And going back to the topic of this hearing, I think we 
need to think about the role platforms have to play in the 
dissemination of COVID scams, for example. This is another 
area--Commissioner Chopra pointed to Section 230. I think this 
is an area where we see the scams popping up again and again 
and again on these platforms. And 230 can inhibit our ability 
to hold platforms accountable for being the marketplace of bad 
action, instead of good ideas.
    Senator Cruz. Well and let me encourage you. I think there 
is particular value the Commission can add, in terms of 
transparency, in terms of addressing the black box. So, for 
example, Big Tech claims there is not political bias. Well, 
they happen to have a monopoly on all the information and data 
you would look to to assess whether there is political bias.
    And so, I have asked repeatedly, in the 2020 election 
cycle, how many Republican candidates for office did you block 
posts from? How many Democratic candidates? There is an answer. 
It is a concrete number. They have it. They refuse to give it. 
Simply making that information public, for multiple cycles, 
what they are doing, I think would be incredibly beneficial, 
reigning in the abuse of power. And I think the Commission has 
ample authority to require those disclosures right now.
    Ms. Slaughter. Well, can I just--I just want to point out, 
Senator, I, as Commissioners Wilson and Chopra indicated, very 
much supported and think the 6(b) study that we are doing on 
social media platforms is extremely important. I would like it 
to have result in us adding some transparency to the 
marketplaces. But the 6(b) statute specifically prohibits us 
from disclosing certain information that we receive as a part 
of those studies, you know, where it is tied to particular 
companies. So, we can comment on market trends, but I want to 
be mindful of the limitations of our statutory authority, which 
we obviously cannot go over. So--and set expectations 
reasonably there.
    The Chair. Well, thank you. We definitely--I mentioned 
earlier we are going to have a hearing about abuse of market 
power later in May. And so, I appreciate your question and 
definitely--I might add an addendum. I think it is not only, go 
jump in a lake. It is, go jump in a lake and I will pay $5 
billion in fine because I am making so much money it does not 
matter. And so, when it is both of those, I think we really 
have to do something. So, thank you for your questions. Senator 
Blumenthal.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thanks, Madam Chair. We really do have 
to do something, and my fear is that Big Tech is watching. It 
is paying tens of millions of dollars to lobbyists. It has 
learned the Microsoft lesson, which is do not wait to be sued. 
And the message they are sending back to the heads of those 
companies is, more talk, we are good, business as usual.
    So, I want to say, amen to Commissioner Chopra's 
observations about the need for action. And I think that there 
should be another takeaway from this hearing, which is, that if 
Ted Cruz and Richard Blumenthal can agree on excessive power 
and abuse of power, there will be some action. And that 
includes Section 230 because, as you have said very well, 
Acting Commissioner Slaughter, vaccine cards onsites, sold 
there with knowledge by the tech platforms is knowledge of an 
illegal act. The mere selling of those cards is a violation of 
law, and only their immunity protects them.
    So, put aside content suppression. Put aside the 
algorithms. Put aside all of the other potential violations of 
law. We have a here and now. There is an immediate threat to 
public health. Fake vaccine cards being sold. Can the FTC do 
something?
    Ms. Slaughter. Thank you, Senator. I think this is a 
perfect example of one of the challenges that we face that is 
real and material, for exactly the reasons that you talk about. 
When Senator Tester was speaking earlier about robocalls, one 
of the things that I think about that issue is similar to this, 
which is, we can and should go after the individual scam 
artist. Sometimes, they are beyond our reach; sometimes they 
are not. We will get them. It is Whack-a-mole. It is the same 
as with the vaccine card scammers. We should go after as many 
of them as we can. But if they still have the platform on which 
to operate, and we cannot hold the platform accountable for 
that, then the scams will proliferate----
    Senator Blumenthal. Let me just make a suggestion. I 
apologize for interrupting. Seems to me that if the sale of 
fraudulent and fake vaccine cards, representing a real threat 
to public health, is a violation of criminal law, it ought to 
be a referral to the Department of Justice. Which does not 
implicate immunity.
    Ms. Slaughter. No, I think that that is right. I think that 
if we ever saw anything that indicated a criminal violation we 
should and would refer it to the Department of Justice.
    Senator Blumenthal. Well, let me make a suggestion that you 
consider doing it. I think that there is more than ample reason 
to make that kind of referral, and I will hope that you will 
consider doing it.
    Voice. Senator--Senator----
    Senator Blumenthal. Let me raise another area, privacy. I 
want to follow up on the Chairman's questions about--or the 
Ranking Member's question about the FTC's oversight of consent 
decrees. Earlier this month, stolen data--stolen data, on 533 
million Facebook users, was leaked to the public. Facebook 
said, well, it is old news. The theft occurred in September 
2019. Yes, the violations of privacy are now, but we are not 
going to notify anyone. It also reneged on its promises to 
separate What's App information from Facebook. Facebook is now 
forcing users to consent to sharing, or else it will disable 
their accounts in a month. I want to ask, is the Commission 
prepared to investigate Facebook's failure to notify users of 
those privacy violations, as a possible violation of the 
consent decree and reversal of privacy commitments to What's 
App users. These consent decrees are meaningless unless they 
are enforced.
    Ms. Slaughter. That I 100 percent agree with you on. I 
cannot talk about any particular fact pattern, but I will tell 
you that I believe we can and should and will be investigating 
every potential violation of consent decrees that we see 
against these large companies, for exactly the reason that you 
articulated. If we are not following up on our orders, then why 
have them in the first place.
    Senator Blumenthal. Will you being reviewing, 
comprehensively, all of your past consent decrees so you can 
assess whether or not they have been violated?
    Ms. Slaughter. Yes, I think that is important, but I think 
it is important to prioritize the consent decrees we have with 
the largest companies, where the biggest harm is at stake.
    Mr. Chopra. Senator, it has become a rite of passage among 
Silicon Valley behemoths that they can get an FTC order and, 
apparently, many of them feel they can just violate it. So, I 
think we need to not only look if it is an order violation--
even if it is not, there needs to be some accountability for 
wrongdoing.
    I have also argued that, if the FTC continues to be 
perceived as unwilling to enforce its own orders, we may need 
to do--Congress may need to do what was done in the Packers and 
Stockyards Act to make sure that individuals can sue in court 
to halt violations of those orders.
    Senator Blumenthal. I agree wholeheartedly. Individuals 
ought to have a right to go to court if, for whatever reason, 
the FTC is failing to enforce its own orders. Thank you all for 
your service and I look forward to working with you and hearing 
from you at a Subcommittee Hearing that we are having next 
week, on COVID related frauds, including fake vaccine cards. 
Thank you.
    The Chair. Thank you. Senator Blackburn.

              STATEMENT OF HON. MARSHA BLACKBURN, 
                  U.S. SENATOR FROM TENNESSEE

    Senator Blackburn. And thank you, Madam Chairman. And I 
really appreciate this hearing today so much.
    Commissioner Chopra, I want to start with you. First of 
all, thank you for your call last week and the conversation 
about the CFPB. Senator Cruz just touched on reigning in Big 
Tech, which, as you know, that is something that the FTC should 
be doing more of. And I am working with others on what I just 
term, a Virtual Youth Protection Agenda. The Virtual Youth 
Protection Agenda addresses privacy, data security, online 
antitrust, and then, also, some work in Section 230. And 
holding Big Tech to account, where they overstep the line, in 
230, where they abuse the privacy rights of individuals is 
something that, I think, that the FTC has to pay more attention 
to.
    You look at the Facebook settlement. Five billion dollars, 
it should have been $50 billion. They have built their worth as 
a company by utilizing data. When you are using these Big Tech 
platforms, you are the product.
    So, I would love to hear from you, just for a minute before 
we move on. What else can the FTC do to reign in Big Tech? What 
are the additional tools that you need?
    Mr. Chopra. Well, I think we have to use a lot of the tools 
we already have. We already have a policy statement on 
deceptively formatted advertisements, where they can be held 
accountable for their algorithmic promotion of content. We 
already have existing orders against Google, against Facebook, 
against Twitter, and the list goes on and on. We should enforce 
them.
    But, Senator, we do need help, I think, from Congress to 
offer more clarity to reign in the abuses of Section 230. It is 
being used to traffic unsafe, counterfeit goods with impunity. 
And there has to be something done to make sure that our 
economy is safe. That brick-and-mortar businesses can fairly 
compete and that we actually can have a Democratic society that 
is not--that is free and fair and not mostly dictated by a 
handful of companies.
    Senator Blackburn. OK, let me ask you this. In 2016, I 
worked in a bipartisan manner, bicameral we passed the BOTS 
Act. And I know that Senator Moran mentioned this just a little 
bit earlier. So, as we continue to monitor the entertainment 
industry, is there anything else this committee should be aware 
of--things that you all have learned, as we look at the 
entertainment industry and as we look at what is happening with 
the BOTS and then, likewise, with the BOTS Act? And then, could 
that template of the BOTS Act be used in other applications or 
for other industries?
    Ms. Slaughter. Thank you, Senator. You are right. We have 
brought our first BOTS Act case. It is important and I think 
BOTS Act does provide an important template for other 
industries, in a couple of ways. Bots are not just a problem in 
ticket sales. They go well outside that. And so, it might 
provide a template for looking at the use of Bots to circumvent 
meaningful limitations in other areas.
    But the other way I think the BOTS Act is a useful 
template, is that it gives us specific civil penalty authority. 
So, we do not have to engage in tortured negotiations about 
what particular harm to individual consumers, where we have a 
stick that we can use to deter bad actions. So, I think it is 
useful there.
    In terms of other questions in the ticket industry, I 
would--I do not think Bots are the entirety of the problem that 
we have in ticket markets. And I would encourage Congress and 
the Committee to look also at the competition questions that 
are involved and the concentration in entertainment markets, 
and also, in practices like whitelisting sites, where consumers 
think they are going to one site to get a ticket, but it 
actually is a fake site.
    So, those are things that we need to look at from an 
enforcement perspective, but I also think they merit the 
attention of Congress, as well.
    Senator Blackburn. Thank you. We will continue to work with 
you on that. My time is about up. I have got a 13(b) question. 
I will submit that to you for an answer. And Madam Chairman, 
thank you so much.
    The Chair. Thank you, Senator Blackburn. Senator 
Hickenlooper, then followed by Senator Thune. Oh, I am sorry. 
Senator Schatz followed by then, Senator Thune.

                STATEMENT OF HON. BRIAN SCHATZ, 
                    U.S. SENATOR FROM HAWAII

    Senator Schatz. Well, I thank you, Chair Cantwell, Vice 
Chair Wicker, and thank you to all the Commissioners.
    I want to start with Commissioner Chopra. An FTC study 
found that one in five people had an error on at least one of 
their credit reports and five percent of consumers had errors 
that were economically damaging to them. In this business, even 
a small error rate means millions of Americans are denied jobs 
or housing. People pay more for credit or are denied loans all 
together. This industry can and does ruin lives with millions 
of simple errors. It can put innocent people in a hole that is 
impossible to get out of.
    So, what do we need to do, Commissioner Chopra? Do you have 
the authorities that you need, under statutory law? Is there 
more the FTC can be doing? Is there more that Congress can be 
doing?
    Mr. Chopra. So, Senator, when I ask people, ``How much 
error do you tolerate in your bank account balance?'' the 
answer is zero percent. But when it comes to credit reports, we 
see so many of them are rife with errors and it is not just the 
credit reports. It is also tenant screening reports. It is also 
employment background check reports. And increasingly, we have 
a new type of industry, where companies are collecting massive 
amounts of data. Data brokers, including the Big Tech 
companies, that may be rife with errors, as well.
    So, this is, like, has so much impact on our lives and we 
need to make sure that there is meaningful enforcement of the 
Fair Credit Reporting Act, and all of our laws. We are at the 
50th anniversary of the FCRA. Some things have worked well; 
some things have not. And I do think we need to have 
conversations about what more can be done to reign in the 
errors that are riddled throughout credit reports and data 
brokers.
    Senator Schatz. Commissioner, excuse me, Chairwoman 
Slaughter, I want to thank you for the great work that the 
Commission does and on a bipartisan basis. My question is 
basic. Where are you with resources? From the authorizing and 
appropriating committee's standpoint, a lot of us will be 
arguing about the policy changes that we all think are 
necessary. We will be introducing legislation. But it seems to 
me that you have plenty of authority and not enough 
technologists and lawyers and analysts. And I am wondering if 
you can tell me, what are your needs in order to execute on the 
laws that are already on the books?
    Ms. Slaughter. I really appreciate the question, Senator, 
and your support and interest. You are right that resources is 
one of our major issues, maybe the biggest issue with which we 
struggle right now. When you think about the demands on the 
Commission across the breadth of our mission areas, from 
competition through consumer protection, we are not, I think, 
as well equipped as we even come close to needing to be to 
tackle them in meaningful ways.
    We had 50 percent more employees at the beginning of the 
Reagan Administration than we do today. And when you think 
about how our mission has grown, data privacy was not really a 
thing we talked about at the beginning of the Reagan 
Administration. Competition looked entirely different from an 
enforcement perspective there. And what the markets looked like 
was totally different.
    So, yes, we need a lot more resources. And I just want to 
put a fine point on it. The absence of resources means that our 
enforcement decisions are harder. If we think that we have a 
real case, a real law violation, in front of us, but a 
settlement on the table that is, maybe, OK but does not get the 
job done, we have to make difficult decisions about whether it 
is worth spending a lot of taxpayer dollars to go sue the 
companies who are going to come in with many, many law firms 
worth of attorneys and expensive economic experts versus taking 
that settlement. I think doing those suits is the right thing 
to do, in a lot of cases, but we have to be open-eyed about 
what that means, in terms of where else we would have to forego 
enforcement.
    And then, the last point I would make to your point about 
expanding technologists and other kinds of expertise, I think 
that is also exactly right. We need to build out our analytical 
skill sets, so that we are not just relying on attorneys and 
economists, but we have more technologists--more other kinds of 
analysis that we bring to bear on the cases that we bring and 
the investigations that we do. So, we are really, 
comprehensively understanding the markets that we are 
addressing.
    Senator Schatz. Thank you. And final quick question, 
Section 230 is increasingly used as a defense against the 
Federal Government in civil actions, which is hindering FTC and 
DOJ. Is there something you think we can do about that, like 
pass the legislation that John Thune and I have introduced?
    Ms. Slaughter. Yes, I think that your legislation makes a 
really important step forward and I am particularly 
appreciative of the exemption that it gives for civil law 
enforcement, from 230. We have talked a couple times today 
about the ways 230 has been used to immunize platforms from 
dealing with illegal conduct that is happening on their sites. 
And COVID scams are a great example of that problem. So, yes, I 
think that would be helpful.
    Senator Schatz. Thank you very much.
    The Chair. Thank you, Senator Schatz. Senator Thune.

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Madam Chair. And Senator Schatz 
asked my first question and----
    Senator Schatz. I am sorry, John.
    Senator Thune. That is--and, Madam Chair--Acting Chair, you 
answered it. So, I appreciate that. We are really interested in 
moving something that would address Section 230 in a way that 
is thoughtful, I think, in terms of reforms, but do get at this 
shield that is used repeatedly. And I would argue now, with 
these platforms, continue to moderate content in a way that was 
not intended when the law was passed back in 1996. So, I think 
it is time for some reforms and Senator Schatz and I would love 
to get this scheduled and voted on, Madam Chair.
    Let me then flip to this question. In 2018, I had requested 
the FTC use its Section 6(b) authority to study consumer 
information data flows of large technology companies, and I was 
pleased to see that the FTC, last February, issue 6(b) orders 
to several major tech companies.
    Acting Chair Slaughter, could you provide an update on the 
Commission's work, with respect to the 6(b) orders issued to 
Facebook, Apple, Alphabet, including Google, Amazon, and 
Microsoft, in February 2020? And as Congress continues to 
identify ways to protect consumer data, do you believe this 
initiative will help shed light on the data practices of these 
large tech companies? And I would welcome the thoughts of any 
other Commissioners, as well.
    Ms. Slaughter. Thank you, Senator. I believe the 6(b) to 
which you are referring from last February actually targeted 
the acquisitions--the non-reportable acquisitions of those 
companies. And I think that is also a really important area of 
Commission attention and study. When you see companies do many 
serial acquisitions, that are below the HSR reporting 
threshold, we do not get to see each of those as they are 
happening. But the big picture of how those consolidations can 
happen, those rollups happen as a result can be really 
meaningful for competition and merits our attention. So, that 
information has been gathered and analysis is ongoing.
    At the same time, last--or, not at the same time. A little 
bit after that, last fall, we issued a separate 6(b)--set of 
6(b) orders to nine social media and video streaming platforms, 
looking at these questions of data collection and use and 
algorithms, and I think we have referenced it a couple times 
before. That, I think, is going to provide really meaningful 
input to the Commission that will help inform how we address 
these big picture questions that sound, in both competition and 
consumer protection. And I am hopeful that we can produce 
something that is also useful to Congress and the public, 
because I think transparency here is important. But of course, 
in both of these cases, we have to be mindful of the 
limitations, in Section 6(b) about what information we can make 
public. So, my goal would be to make as much public as we 
legally can. But we have to, of course, mind our statutory 
limitations.
    Mr. Phillips. Senator, I did not support that latter 6(b). 
I felt that it was underinclusive as to the targets and 
overinclusive as to topics. I felt that it looked at too much 
at the same time. And so, having to respect the anonymity that 
is legally required, we would not be able to get the kind of 
data that we need, on how the data flow. But I absolutely agree 
that studying data flows in the economy, from big firms, also 
from small firms, is a good use of our authority.
    Mr. Chopra. Senator, if I could just add, part of this 
study will--should also solicit documents about including 
content curation and content moderation type practices, 
including how it is done algorithmically. My personal view is 
that that study is very important but waiting for--we should 
not wait for it to conclude to fix Section 230. I think Section 
230 is an urgent priority to get reform and I do support, 
especially as an initial step, not subjecting civil law 
enforcement for firms to raise that immunity as a defense.
    Senator Thune. OK, great, thank you.
    Ms. Wilson. Senator Thune, this is Christine Wilson. If I 
could just add, I do agree with what Acting Chairwoman 
Slaughter said about both of these 6(b) studies. I think it is 
important to look at the sub-HSR acquisitions that are 
occurring, not just in Big Tech, but in other areas, as well, 
for example, kidney dialysis and other industry rollups that 
are occurring, and I fully support efforts of the FTC to do 
that.
    But I also echo the importance of the 6(b) study regarding 
information flows. That is a study that Commissioners Chopra 
and Slaughter and I worked on while Chairman Simons was still 
there. I do think it is the single most important thing that 
the FTC is doing right now. And we will certainly use that 
information to inform both our enforcement and policy efforts, 
as well as our technical assistance to Congress. Perhaps this 
is one area where Commissioner Phillips and I disagree. I do 
not think we need to report out the information to make it 
useful to us. I think just having that information, even if we 
cannot publish it because we cannot necessarily anonymize it 
effectively, is still going to help us refine our enforcement 
approach.
    Senator Thune. Madam Chair, my time is expired, but if I 
could just ask if, at some point, you could answer this 
question. I think Senator Tester, perhaps, asked a similar 
question already, but that is the enactment of the TRACED Act, 
which was, you know, we passed in December 2019. You have seen 
a drop in robocall complaints, I understand, and I would, at 
some point, if you could elaborate on some of the recent 
enforcement actions that you have taken with respect to 
robocalls, that would be great.
    The Chair. Thank you. Thank you, Senator Thune.
    Senator Thune. Thank you, Madam Chair.
    The Chair. Yes, we should follow up on that information 
both, you know, at home and on mobile devices. So, Senator 
Peters is next, and I think we have a couple of members in the 
queue. Senator Rosen and Senator Hickenlooper. I do not have 
anybody else on this side. if there are, please let us know. 
But Senator Peters, if you could ask you question and then, 
call on Senator Rosen. I am going to step out for just a 
minute. But if you could get those two done, that would be 
great. Thank you. Senator Peters.

                STATEMENT OF HON. GARY PETERS, 
                   U.S. SENATOR FROM MICHIGAN

    Senator Peters. Thank you, Madam Chair. Acting Chairwoman 
Slaughter, earlier this month Michigan's Attorney General 
shared a press release warning that Michiganders of a COVID-19 
vaccine reward scam that was occurring in our state. 
Individuals receiving the fraudulent post-vaccine survey, e-
mails and texts were congratulating them for getting the 
vaccine, so they now qualified for a free reward. All you have 
to do is pay for shipping and handling. Give me your credit 
card. And the reward never shows up. And it was going on in a 
pretty wide basis.
    Reports suggest the scammers may have targeted their 
victims using vaccine card selfies. But the vaccine cards do 
not have, as you know, e-mails on them or phone numbers on 
them. So, it is questionable whether or not that was the 
source. So, but my question to you, has the FTC investigated 
whether these scammers have purchased vaccine information or 
used data bases of personal information, like phone number and 
e-mail addresses, from data brokers in order to target these 
victims?
    Ms. Slaughter. Thank you, Senator. I cannot comment on any 
particular fact pattern of investigation, but I will tell you 
that we are very much prioritizing investigating all complaints 
we hear about COVID-related scams. And working closely with 
State attorney's general and consumer advocates is really 
important for us, as well, not only to gather the information 
that we need to do appropriate law enforcement, but also get 
the information out to communities to make sure people do not 
fall for these scams to begin with. So, we need to be doing 
both of those things.
    Senator Peters. Well, I have introduced in the past, and 
plan to reintroduce, a Data Broker List Act, which is going to 
increase transparency and security of personal data. It will 
require data brokers to register and maintain comprehensive 
security system. You may be familiar with.
    My question to you is, would increasing transparency around 
data brokers' activity make it easier for the FTC to track 
scammers, like the ones we are talking about, who are targeting 
innocent citizens?
    Ms. Slaughter. Thanks, and I apologize for not addressing 
the data broker point of your original question. When I was 
listening to it, it felt to me a little bit like an FTC issue 
spotting law school exam because you pointed to all sorts of 
different issues, including the data broker universe, which 
operates in an extremely opaque background. Where people have 
no, not only, knowledge of, but also choice about what 
information is collected, by whom, how it is sold. So, I think 
transparency is absolutely a minimum step that we need there. 
We also need accountability for these companies. And we need 
consumers to have more authority to decide who gets to have 
their information in the first place, so that we do not have 
this, sort of, infrastructure that feeds the advertising 
surveillance ecosystem, in ways that are really harmful to your 
constituents and others.
    Senator Peters. So, I gather from that answer, more 
transparency is something that we definitely need, you fully 
support.
    Ms. Slaughter. Yes. Short answer, yes. I think more 
transparency would be great. Thank you, Senator.
    Senator Peters. Well, no, I appreciate the law school 
answer, as well. But definitely, we will continue to work on 
the transparency, and I appreciate your efforts in that area.
    Another question for you is that the COVID-19 pandemic has 
also caused an increase in government contracts, to address the 
needs for Americans, as we recover from this crisis. 
Unfortunately, there have been numerous instances of bad actors 
that have taken advantage of the emergency to improperly 
influence the Federal procurement contracts and grant making. 
They have been using a number of unscrupulous tactics to try to 
get around some of the competitiveness provisions that exist in 
contracting practices.
    I am Chairman of the Homeland Security and Government 
Affairs Committee. We have oversight jurisdiction of Federal 
contracts. And I want to certainly ensure that the Federal 
procurement practices protect contractors and taxpayers, from 
any kind of anti-competitive activity.
    So, my question to you, ma'am, is what is the FTC doing to 
enforce against contractors who are improperly influencing 
Federal contracting?
    Ms. Slaughter. Thank you, Senator, for the question. I 
think it is an interesting one. Contracting--government 
contracting, in this particular context, is not one that comes 
up all the time. But I think, as you describe it, 
misrepresentation and illegal conduct, in association with 
getting government contracts, is illegal and is something that 
we can and should investigate. So, wherever we can get 
complaints and get information, that is something we can apply 
our investigatory resources and law enforcement tools to. And 
so, I would be happy to take a look at whatever complaints you 
can send our way.
    Mr. Chopra. Senator, could I just add that I think the 
consolidation that we have seen in the defense industry has 
been very problematic for public procurement. We are spending 
more and more money for some of the same exact services and 
making sure that the FTC polices those defense mergers with the 
DOD is absolutely critical.
    We also need to put a stop to bid rigging. And I think, 
actually, that should be best done criminally. When contractors 
coordinate on their bids, that is a--could be a criminal 
violation and it should be pursued as such.
    Senator Peters. Right. I appreciate that. Thank you, for 
all of you for your testimony here today. I would like to 
recognize Senator Rosen, for your questions.

                STATEMENT OF HON. JACKY ROSEN, 
                    U.S. SENATOR FROM NEVADA

    Senator Rosen. Well, thank you, Senator Peters, and I 
really appreciate this oversight hearing today. And I want to 
thank Acting Chairwoman Slaughter and all the Commissioners, 
for being here and for their hard work.
    But I would like to build upon Senator Peters' concerns 
over consumer fraud, as it relates to identity theft. Because, 
last year, when the Commission appeared before the Committee 
during the height of the pandemic, I shared my concerns with 
you about rampant consumer fraud individuals and families are 
facing around the country, especially in my home state of 
Nevada. Consumer fraud, especially acute because the pandemic 
hit our economy harder than almost any other State. The 
scammers capitalized on the hardship of the unemployment of 
Nevadans, using stolen personal information derived from 
countless data security breaches, phishing attacks, 
impersonation scams that were meant to steal their unemployment 
relief, and of course, then, their stimulus payments.
    So, Chairwoman Slaughter, could you please update the 
Committee on any new steps the FTC has taken to address the 
significant rise in identity theft during the pandemic? And 
could you also, maybe, mention what specific additional 
resources we could do to educate the public of these online 
threats and risks? Or what resources you might need to go after 
these fraudsters online?
    Ms. Slaughter. Thank you, Senator. Well, first I will start 
by thanking you, in particular, for the money that you 
appropriated to the FTC in the American Rescue Plan, which 
included specific allocations to do more COVID-related scams 
enforcement and to do more consumer education. We are working 
quickly to put that money to use, to hire staff, to expand our 
outreach. Because we want, in the first instance, to stop 
people from getting scammed to begin with, and then, to go 
after scammers who still manage to find victims.
    And so, I think that it is incredibly important. You are 
absolutely right that scammers are capitalizing on people's 
desperation. That is adding injury to the already profound pain 
and suffering that people are experiencing right now. And so, 
we are very much committed to going after it. You are right 
that identity theft has been one of the big areas we have seen 
an increase. And it is one where we need to use the money that 
you have given us to expand our outreach in education, hire 
more staff, and bring more enforcement actions.
    Senator Rosen. Thank you. I want to build on identity theft 
and fraud, particularly as it is relating to our veterans. 
Nevada is home to over 225,000 veterans, nearly 20,000 service 
members, and certain scams are more likely to target members of 
our military, or our veterans. According to the Nevada Attorney 
General's office, the most common scams include fraudulent 
mortgage relief programs, high-interest military loan scams, of 
course again, identity theft. And Nevada ranked 4th in 2020 for 
the highest per capita cases of reported identity theft.
    So, veterans in my state, of course they can turn to the 
Nevada Attorney General's Office of Military Legal Assistance 
and they do get free legal assistance there, to anybody who is 
active duty, reserve, National Guard. And they are doing 
excellent work to protect our veterans. But, Chairman 
Slaughter, could you share with us how your office is working 
with the Department of Veteran's Affairs, as well as our State, 
local, and non-profit veteran's organizations, to get the word 
out to address these illegal scams that are targeting our 
military and our veterans, please?
    Ms. Slaughter. Thank you, Senator. You are absolutely 
right. The veterans and military service members are a 
particular target of scams, in part because of how frequently 
they have to move around. And that is something that has been 
in the Commission's attention for a long time. But activating 
those partnerships with other enforcement agencies, whether it 
is the VA, State attorneys general, or as you pointed to, 
advocates on the ground, is really important to make sure we 
are seeing everything we need to see, we are reaching the 
people we need to reach.
    Just last month, maybe the end of the month before, the FTC 
launched the Community Advocate Center, which is designed, in 
part, to help us better connect with advocacy organizations 
that are reaching populations that we are not reaching well, 
through our online outreach or other programs that we have been 
using, historically. So, that is one way that I think we want 
to particularly address veterans' groups.
    Veterans are also a priority in our Every Community 
Initiative, where we are trying to target enforcement efforts. 
So, I appreciate the question and can commit that it will 
continue to be a priority for the agency.
    Senator Rosen. I appreciate the hard work that you are 
doing. We have no shortage of folks that are going to try to 
take advantage of others, and we have beat them to the punch 
with education, information, and resources.
    So, I yield back my time. Thank you.
    Senator Peters. Well, thank you, Senator Rosen. Senator 
Lummis, you are recognized for your questions.

               STATEMENT OF HON. CYNTHIA LUMMIS, 
                   U.S. SENATOR FROM WYOMING

    Senator Lummis. Thank you, Mr. Chairman, and thank you, 
Commissioners, for appearing before the Committee today.
    My questions are going to start to focus on BOTS. As you 
know, there has been a tremendous rise in e-commerce during 
COVID. And during this time, there has also been a big spike in 
the use of BOTS. BOTS were used to buy up entire supplies of 
physical goods that were made scarce during the pandemic, such 
as, toilet paper and other paper products. What is the FTC's 
level of concern related to these types of uses of BOTS? And 
this is for any Commissioner that chooses to answer.
    Mr. Chopra. Senator, I appreciate the question. Anytime 
that technology is being deployed to corner the market and rip 
people off, that obviously is a huge concern. The Commission 
currently enforces a law about ticket BOTS, which I will let 
some of my colleagues talk about. But here is what we are 
seeing on some of these platforms. People making mass 
purchases, engaging in price gouging. And that is something we 
have to think about the incentives of those tech platforms to 
properly police and we need to be working with the State 
attorneys general to crack down on some of the worst of it. But 
obviously, more authority would be useful in addressing that 
concern.
    Senator Lummis. So, do you consider some of these practices 
to be anti-competitive? And since consumerism in general seems 
to be switching, and perhaps over the long-term, to a more 
digital model, what can states do, and what can you help states 
do, to take on these issues?
    Mr. Chopra. Well, generally speaking, Senator, when 
companies or scammers use, you know, to intercept any sort of 
computer system to allow them to purchase all goods and not let 
others fairly compete, that actually could be a violation of 
some of our computer fraud laws. I am happy to answer a 
question for the record. When it comes to whether it is anti-
competitive, I believe there are certainly some real 
implications there. But we absolutely need to do more, when it 
comes to working with states on this issues. Because we need a 
free market that is competing on price and quality, not being 
cornered by criminals using technology.
    Mr. Phillips. Senator, just briefly, to add to what 
Commissioner Chopra said. I think one thing we do need to look 
out for, and to work with states to look out for, to the extent 
there are participants in the market that are using the guise 
of computer programs to work together to bid rig, or corner 
markets, or whatever it is, then you can very easily tip into 
anti-competitive territory.
    Ms. Slaughter. And I will just jump in, too, to point out, 
Commissioner Chopra referenced the ticket BOTS Act. That gives 
us very specific and clear authority to go after the use of 
BOTS to circumvent distribution measures in ticket markets. But 
we do not have that same clear, direct authority in other kind 
of markets. So, while I believe we should be thinking 
creatively and aggressively about how the FTC Act, generally, 
or some of our other specific statutes might apply, in any 
circumstance where Congress makes very clear that particular 
conduct is illegal and should be pursued under the FTC Act, 
that makes it a lot easier for us to do that, especially when, 
as with the BOTS Act, that is coupled with civil penalties, so 
that there is a real incentive for companies to comply.
    Senator Lummis. So, do you think that a statutory response 
is warranted here?
    Ms. Slaughter. I think it would make it much easier for us 
to bring enforcement actions against the kind of conduct about 
which you are concerned.
    Senator Lummis. OK. Thank you. Thank you very much. Are 
there particular sectors that are being targeted more than 
others for scams during COVID-19?
    Mr. Chopra. So, Senator, we have seen a huge uptick in all 
sorts of complaints, particularly when it comes to government 
benefits. I think, because of the continuous data breaches, 
over and over again, there are more ways for people to steal 
identities and to defraud the government and to even steal 
people's identities.
    You know, we know that our military service members and 
veterans report identity theft and other fraud at a much higher 
rate. We know that seniors are particularly vulnerable. So, 
there are pockets of places where we know, but there is so much 
we do not know. So, it is important that we really figure out 
the sources of where this fraud is propagating. I am concerned 
that many of the widespread frauds are being trafficked online. 
And we need to look at how some of those large firms are 
policing their platforms.
    Senator Lummis. Well, thank you very much, Commissioners. I 
appreciate your testimony today. Mr. Chairman, I yield back.
    The Chair. Thank you. Senator Hickenlooper.

             STATEMENT OF HON. JOHN HICKENLOOPER, 
                   U.S. SENATOR FROM COLORADO

    Senator Hickenlooper. Thanks so much. I appreciate that, 
Madam Chair, and thank you for holding such an informative 
session today.
    I have another question for Ms. Slaughter, if I can. I 
understand that, in 2018, the FTC's Division of Consumer and 
Business Education launched a Cybersecurity Education 
Initiative, directed and focused to support small businesses. 
As a small business owner, myself for many years, I recognize 
how important it is that small businesses be able to address 
some of the real challenges that we are facing right now. And 
that is--I think that is--what the FTC was doing was a great 
step in that direction.
    So, Chair Slaughter, I would love to hear what feedback you 
have, for those small businesses, for the FTC. In Colorado, we 
have a National Center for Cybersecurity we set up 
independently, in conjunction with the military, but the goal 
being to help small businesses, but also, local municipalities. 
So, what you have heard from small business. I am going to try 
to think about how it might also apply to small, you know, 
counties, small cities and towns, as well.
    So, anyway, does a--I guess I would love to hear a little 
bit of the feedback and then, if you have any plans on 
incorporating this feedback into some form of technical 
assistance that could go out to the small business community? 
Thanks.
    Ms. Slaughter. Thank you, Senator. You are right. Small 
businesses have been targeted, continue to be targeted, and we 
know that they can be real victims of scammers and bad actors, 
and anti-competitive conduct, the same way individuals can be. 
And so, protecting them is an important priority, and just as 
you reflected, that starts with educating them and outreach. 
So, the programs that you referenced, I think, are important, 
having to do with data security. The Start with Security and 
Stick with Security education programs can be helpful to small 
businesses because they can be especially susceptible to data 
vulnerabilities and things like ransomware attacks. And we want 
to avoid that happening to begin with.
    We also know that small businesses can be susceptible to 
scams related to government benefits. So, for example, the PPP 
program was something where we saw small business scams attach 
to, at the beginning of the pandemic.
    So, continuing to do outreach and education for small 
businesses, not only about cybersecurity, but also about scam 
protection, remains a priority for us. And again, I want to 
thank Congress for the recent money you appropriated to us to 
help do more of that outreach and education.
    And then, sorry, let me just add, I want to make sure that 
we are following up--it is not just educating businesses for 
how to avoid scams, but we are following up to pursue companies 
that violate the law in ways that harm small businesses. 
Whether it is scams or anti-competitive conduct, or anti-
competitive mergers, we need to be staying on top of those 
issues and doing everything we can to help small businesses not 
get hurt to begin with, and then, help them get relief if the 
injuries do occur.
    Mr. Chopra. Senator, can I just add to the Acting 
Chairwoman's--I totally agree that we also need to help small 
businesses get restitution when they have been harmed by some 
of these data breaches. Too often, we basically think, well, 
let us just tell them to stop, but do not do anything to help 
the victims. More and more small businesses are in need of 
password managers, security keys, and other protocols to help 
them protect themselves. And we need to do more when those 
small businesses are victimized, when their confidential 
business information is stolen, and to help them really 
compete.
    Senator Hickenlooper. Great, thank you. Thank you, Mr. 
Chopra. And I will yield back my time. I think this is 
illustrative of how much has been done, but also, how much work 
we still have to do, in terms of trying to safeguard small 
businesses, individuals, everybody from all these scams and 
fraudulent efforts to use cybersecurity to attack us.
    The Chair. Thank you. Well, we are definitely--we will 
definitely have more time with the Commission on those issues 
in the future. So, I thank all my colleagues for participating 
today. I do not know if we have anybody else. But while we are 
doing, I guess, a last call with our colleagues to see if there 
is anybody else who is interested in making a question, I just 
want to clarify a couple things from the hearing.
    First, we did give the Commission anti-manipulation 
authority. You do have that authority for wholesale markets. 
When we gave you that authority, we thought you would do a 
better job of policing the impacts of gas prices in certain 
market segments of the United States, which seem to have 
perpetually high prices. I do not--but so, as people talked 
about price gouging today, what do we think the difference is, 
or authority that you have that you have not used, and an 
authority on price gouging? Could somebody elaborate?
    Mr. Chopra. So, with respect to the Energy Market 
Manipulation Rule, that covers, I believe, wholesale markets.
    The Chair. Yes.
    Mr. Chopra. The FERCs authority has some--there is some 
parallelism to that. Most of our work has actually been in the 
retail gas area. We have limited authority on price gouging. 
And unlike the states, we do not have a general authority on 
price gouging. That is really at the State level. But I agree. 
I think we need to be thinking hard about what our future 
footprint is in the energy markets to make sure that consumers 
have choice and energy is affordable.
    The Chair. Well, as I mentioned, this has been a very 
successful tool for FERC, as it relates to its market-based 
authority. For the FTC, I think what happened to us is, one 
summer we had the highest gas prices in the Nation in Spokane, 
Washington. And we were like, why do we have the highest gas 
prices in the Nation? It made no sense.
    And we asked the FTC to track that supply chain of why, 
because a lot of people--in the Puget Sound area we have high 
gas prices because--well, one of the issues is all our oil is 
from the Alaska market. And so, it is an isolated market, and 
you can have issues with that. So, it is not as effective as a 
more robust market. In this case, though, Spokane was not 
getting its oil from Alaska. So, the FTC we asked you to do a 
report.
    So, all I am saying is, to me, we are still here today with 
lots of issues about price gouging and as a manipulation 
authority, I would hope you would look at that and just--we can 
get clarity in the future about what else we need.
    So, with that, I do not think we have anybody else in the 
queue. So, the record will remain open for two weeks. I thank 
all of the Commissioners for being here. You can see we had a 
robust session of questions from our colleagues, on a variety 
of topics. But clearly 13(b) is most pressing, so we hope that 
we will resolve that issue one way or another. And so, the 
authority will continue to rest with the FTC to take aggressive 
action. And we ask that senators submit questions for the 
record by May 4th and that you help us by returning anything as 
quickly as possible, but no later than two weeks after that 
date.
    So, that concludes our hearing. Again, thank you for to the 
Commissioners for your attendance. We are adjourned.
    [Whereupon, at 12:09 p.m., the hearing was adjourned.]

                            A P P E N D I X

     Response to Written Questions Submitted by Hon. John Thune to 
  Hon. Rebecca Kelly Slaughter, Hon. Noah Joshua Phillips, Hon. Rohit 
                   Chopra, and Hon. Christine Wilson
    Question. Currently, per an order from the Centers for Disease 
Control and Prevention (CDC), a moratorium is in effect for residential 
evictions through June 30, 2021. On April 13, 2021, the CDC issued an 
updated FAQ document stating the following.
    Do landlords have to make their tenants aware of the CDC order and 
Declaration?
    The Order itself does not require landlords to make tenants aware 
of the Order and Declaration. But other relevant law, for instance the 
Fair Debt Collection Practices Act and the Federal Trade Commission 
Act, may require landlords, or their agents, to do so. Under these 
statutes, evicting tenants in violation of the CDC, state, or local 
moratoria, or evicting or threatening to evict them without apprising 
them of their legal rights under such moratoria, may violate 
prohibitions against deceptive and unfair practices. Landlords must 
otherwise comply with all requirements of the Order. Also, even if not 
legally required, landlords are encouraged to tell their tenants about 
the Order.
    Can you please describe the specific authority the FTC has in 
enforcing the CDC's eviction moratorium, as the aforementioned FAQ 
excerpt very broadly references laws under the FTC's jurisdiction?
    Answer. The Department of Justice has the authority to enforce the 
CDC's eviction moratorium order\1\; it may initiate criminal 
proceedings as appropriate for violations of the order, seeking 
imposition of the criminal penalties provided under 18 U.S.C. 
Sec. Sec. 3559, 3571; 42 U.S.C. Sec. 271; and 42 C.F.R. Sec. 70.18.
---------------------------------------------------------------------------
    \1\ The U.S. District Court for the District of Columbia vacated 
the CDC's eviction moratorium order, but has stayed that decision 
pending appeal.
---------------------------------------------------------------------------
    The Federal Trade Commission (``FTC'') has the authority to enforce 
Section 5 of the FTC Act and the Fair Debt Collection Practices Act 
(``FDCPA''). Section 5 of the FTC Act prohibits unfair or deceptive 
acts or practices in or affecting commerce. 15 U.S.C. Sec. 45(a)(1). An 
act or practice is unfair if it causes or is likely to cause 
substantial injury to consumers which is not reasonably avoidable by 
consumers themselves and not outweighed by countervailing benefits to 
consumers or to competition. 15 U.S.C. Sec. 45(n). An act or practice 
is deceptive if it involves a material representation, omission or 
practice that is likely to mislead a consumer acting reasonably in the 
circumstances. See Federal Trade Commission Policy Statement on 
Deception, appended to Cliffdale Assocs., Inc., 103 F.T.C. 110, 174-83 
(1984).
    The FTC's authority to enforce the FDCPA includes the authority to 
enforce any rule promulgated thereunder by the Bureau of Consumer 
Financial Protection (``CFPB''). The CFPB recently issued an interim 
final rule, effective May 3, 2021, which addresses debt collector 
conduct associated with the CDC moratorium.\2\ Under the interim final 
rule, debt collectors, as defined by the FDCPA, seeking to evict 
certain tenants for non-payment of rent must provide those tenants with 
clear and conspicuous notice that the consumer may be eligible for 
temporary protection from eviction under the CDC moratorium. The notice 
must be provided on the same date as the eviction notice, or, if no 
eviction notice is required by law, on the date that the eviction 
action is filed. Debt collectors must provide the notice in writing.
---------------------------------------------------------------------------
    \2\ See https://www.consumerfinance.gov/about-us/newsroom/cfpb-
rule-clarifies-tenants-can-hold-debt-collectors-accountable-for-
illegal-evictions/.
---------------------------------------------------------------------------
                                 ______
                                 
     Response to Written Question Submitted by Hon. Todd Young to 
  Hon. Rebecca Kelly Slaughter, Hon. Noah Joshua Phillips, Hon. Rohit 
                   Chopra, and Hon. Christine Wilson
    Question. The Cancer Moonshot is incredibly important to this 
country and early cancer detection is a critical part of opening up new 
opportunities to develop new therapies. I understand that GRAIL has 
made a breakthrough and developed a multi-cancer early detection test 
that can detect more than 50 cancers in an asymptomatic patient and is 
entered into a transaction agreement with Illumina, Inc.
    Can you elaborate on why the FTC is challenging this transaction?
    Answer. On March 30, 2021, the FTC filed an administrative 
complaint and authorized a Federal court lawsuit to block Illumina, 
Inc.'s proposed acquisition of GRAIL, Inc. (``Grail''). The complaint 
alleges that the proposed acquisition would likely diminish innovation 
in the United States market for multi-cancer early detection (``MCED'') 
tests, and likely reduce the choice and quality of these tests and make 
these life-saving products more expensive. In other words, the 
complaint alleges that the acquisition is likely to harm consumers in 
the United States.
    According to the complaint, MCED tests could detect up to 50 types 
of early-stage cancer, most of which are not screened for at all today, 
saving millions of lives around the world. Grail is one of several 
competitors racing to develop and ultimately commercialize these liquid 
biopsy tests, which analyze a patient's blood or other fluid through 
DNA sequencing. Illumina is the only provider of next-generation DNA 
sequencing (``NGS'') platforms that are a viable option for Grail and 
other MCED test developers in the United States. Illumina's NGS 
platforms are an essential input for developing and commercializing 
MCED tests. Grail and each of its MCED test competitors must rely on 
Illumina's NGS platforms to research, develop, launch, and sell their 
MCED tests successfully.
    As the only viable supplier of an essential input, Illumina has 
several tools that it could use to harm Grail's MCED test competitors. 
For example, Illumina could raise prices charged to Grail competitors 
for NGS instruments and consumables; impede Grail competitors' research 
and development efforts; or refuse or delay executing licensing 
agreements that all MCED test developers need to distribute their tests 
to third-party laboratories.
    The complaint alleges that the proposed acquisition would give 
Illumina both the incentive and ability to disadvantage MCED test 
developers that pose a significant competitive threat to Grail, and to 
limit the competitiveness of any MCED product that it expects to 
compete closely with Grail's MCED test. Because Grail's MCED test 
rivals have no choice but to use Illumina's NGS platforms, they would 
not be able to divert from Illumina if it raises their costs or 
otherwise disadvantages them.
    The complaint also alleges that even if a viable substitute to 
Illumina's NGS platforms entered the market, it would take years for 
MCED test developers to switch to a platform other than Illumina's 
because they would have to reconfigure their tests to work with the new 
NGS platform, and in some circumstances, conduct new clinical trials.
    The administrative trial is scheduled to begin on August 24, 2021.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Shelley Moore Capito to 

  Hon. Rebecca Kelly Slaughter, Hon. Noah Joshua Phillips, Hon. Rohit 
                   Chopra, and Hon. Christine Wilson
    Question. As you may know, many states are adopting or considering 
legislation as to how companies must communicate the ingredients that 
make up their cleaning products. While the purpose of these efforts 
make sense, I am concerned that a patchwork of regulation across the 
country will cause confusion for consumers and create an unnecessary 
burden on businesses.
    How would a national standard on cleaning product's ingredient 
communication benefit consumers in terms of the ability to access 
clear, consistent information regardless of where they live or where 
they purchase cleaning products?
    Answer. As a general matter, national standards benefit consumers 
by providing a baseline of information to which they are entitled 
regardless of where they live or where they purchase.
    They also benefit businesses by providing transparent guidelines 
about compliance with Federal law. Especially in the absence of strong 
Federal standards, states understandably will act to provide benefits 
to their residents.
    The Environmental Protection Agency has particular expertise and 
related regulatory requirements on cleaning products and chemicals; 
therefore, we would welcome their opinion on the effects of specific 
labeling or disclosure standards in this area. In the past, FTC staff 
has provided assistance to EPA and other agencies on developing 
consumer labels and would do so if needed in this area.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
          Hon. Noah Joshua Phillips and Hon. Christine Wilson
    Question. Currently, per an order from the Centers for Disease 
Control and Prevention (CDC), a moratorium is in effect for residential 
evictions through June 30, 2021. On April 13, 2021, the CDC issued an 
updated FAQ document stating the following.
    Do landlords have to make their tenants aware of the CDC order and 
Declaration? The Order itself does not require landlords to make 
tenants aware of the Order and
    Declaration. But other relevant law, for instance the Fair Debt 
Collection Practices Act and the Federal Trade Commission Act, may 
require landlords, or their agents, to do so. Under these statutes, 
evicting tenants in violation of the CDC, state, or local moratoria, or 
evicting or threatening to evict them without apprising them of their 
legal rights under such moratoria, may violate prohibitions against 
deceptive and unfair practices. Landlords must otherwise comply with 
all requirements of the Order. Also, even if not legally required, 
landlords are encouraged to tell their tenants about the Order.
    Can you please describe the specific authority the FTC has in 
enforcing the CDC's eviction moratorium, as the aforementioned FAQ 
excerpt very broadly references laws under the FTC's jurisdiction?
    Answer. The Department of Justice has the authority to enforce the 
CDC's eviction moratorium order\1\; it may initiate criminal 
proceedings as appropriate for violations of the order, seeking 
imposition of the criminal penalties provided under 18 U.S.C. 
Sec. Sec. 3559, 3571; 42 U.S.C. Sec. 271; and 42 C.F.R. Sec. 70.18.
---------------------------------------------------------------------------
    \1\ The U.S. District Court for the District of Columbia vacated 
the CDC's eviction moratorium order, Ala. Ass'n of Realtors v. U.S. 
Dep't of Health and Human Services, No. 1:20-cv-03377-DLF (D.D.C. filed 
May 5, 2021), but has stayed that decision pending appeal, Ala. Ass'n 
of Realtors v. U.S. Dep't of Health and Human Services, No. 1:20-cv-
03377-DLF (D.D.C. filed May 14, 2021).
---------------------------------------------------------------------------
    The Federal Trade Commission (``FTC'') has the authority to enforce 
Section 5 of the FTC Act and the Fair Debt Collection Practices Act 
(``FDCPA''). Section 5 of the FTC Act prohibits unfair or deceptive 
acts or practices in or affecting commerce. 15 U.S.C. Sec. 45(a)(1). An 
act or practice is unfair if it causes or is likely to cause 
substantial injury to consumers which is not reasonably avoidable by 
consumers themselves and not outweighed by countervailing benefits to 
consumers or to competition. 15 U.S.C. Sec. 45(n). An act or practice 
is deceptive if it involves a material representation, omission or 
practice that is likely to mislead a consumer acting reasonably in the 
circumstances. See Federal Trade Commission Policy Statement on 
Deception, appended to Cliffdale Assocs., Inc., 103 F.T.C. 110, 174-83 
(1984).
    The FTC's authority to enforce the FDCPA includes the authority to 
enforce any rule promulgated thereunder by the Bureau of Consumer 
Financial Protection (``CFPB''). The CFPB recently issued an interim 
final rule, effective May 3, 2021, that addresses debt collector 
conduct associated with the CDC moratorium.\2\ Under the interim final 
rule, debt collectors, as defined by the FDCPA, seeking to evict 
certain tenants for non-payment of rent must provide those tenants with 
clear and conspicuous notice that the consumer may be eligible for 
temporary protection from eviction under the CDC moratorium. The notice 
must be provided on the same date as the eviction notice, or, if no 
eviction notice is required by law, on the date that the eviction 
action is filed. Debt collectors must provide the notice in writing.
---------------------------------------------------------------------------
    \2\ See CFPB Rule Clarifies Tenants Can Hold Debt Collectors 
Accountable for Illegal Evictions (Apr. 21, 2021), https://
www.consumerfinance.gov/about-us/newsroom/cfpb-rule-clarifies-tenants-
can-hold-debt-collectors-accountable-for-illegal-evictions/.
---------------------------------------------------------------------------
                                 ______
                                 
     Response to Written Question Submitted by Hon. Todd Young to 
          Hon. Noah Joshua Phillips and Hon. Christine Wilson
    Question. The Cancer Moonshot is incredibly important to this 
country and early cancer detection is a critical part of opening up new 
opportunities to develop new therapies. I understand that GRAIL has 
made a breakthrough and developed a multi-cancer early detection test 
that can detect more than 50 cancers in an asymptomatic patient and is 
entered into a transaction agreement with Illumina, Inc.
    Can you elaborate on why the FTC is challenging this transaction?
    Answer. On March 30, 2021, the FTC filed an administrative 
complaint and a Federal court lawsuit to block Illumina, Inc.'s 
proposed acquisition of GRAIL, Inc. (``Grail''). The Commission has 
since authorized staff to dismiss the Federal court complaint seeking a 
preliminary injunction, due to proceedings in Europe that currently bar 
the parties from consummating the transaction.
    The administrative process continues.
    The administrative complaint alleges that the proposed acquisition 
would likely diminish innovation in the U.S. market for multi-cancer 
early detection (``MCED'') tests, and likely reduces the choice and 
quality of these tests and make them more expensive. The case is an 
example of the anticompetitive harms that were described by the FTC and 
DOJ's recently issued Vertical Merger Guidelines.
    According to the complaint, MCED tests could detect up to 50 types 
of early-stage cancer, most of which are not screened for at all today, 
saving millions of lives around the world. Grail is one of several 
competitors racing to develop and ultimately commercialize these liquid 
biopsy tests, which analyze a patient's blood or other fluid through 
DNA sequencing. Illumina is the only provider of next-generation DNA 
sequencing (``NGS'') platforms that are a viable option for Grail and 
other MCED test developers in the United States. Grail and each of its 
MCED test competitors must rely on Illumina's NGS platforms to 
research, develop, launch, and sell their MCED tests successfully.
    As the only viable supplier of an essential input, Illumina has 
several tools that it could use to harm Grail's MCED test competitors. 
For example, Illumina could raise prices charged to Grail competitors 
for NGS instruments and consumables; impede Grail competitors' research 
and development efforts; or refuse or delay executing licensing 
agreements that all MCED test developers need to distribute their tests 
to third-party laboratories.
    The complaint alleges that the proposed acquisition would give 
Illumina both the incentive and ability to disadvantage MCED test 
developers that pose a significant competitive threat to Grail, and to 
limit the competitiveness of any MCED product that it expects to 
compete closely with Grail's MCED test. Because Grail's MCED test 
rivals have no choice but to use Illumina's NGS platforms, they would 
not be able to divert from Illumina if it were to raise their costs or 
otherwise disadvantages them.
    The complaint also alleges that even if a viable substitute to 
Illumina's NGS platforms were to enter the market, it would take years 
for MCED test developers to switch to a platform other than Illumina's 
because they would have to reconfigure their tests to work with the new 
NGS platform, and in some circumstances, conduct new clinical trials.
    The administrative trial is scheduled to begin on August 24, 2021.
                                 ______
                                 
Response to Written Question Submitted by Hon. Shelley Moore Capito to 
          Hon. Noah Joshua Phillips and Hon. Christine Wilson
    Question. As you may know, many states are adopting or considering 
legislation as to how companies must communicate the ingredients that 
make up their cleaning products. While the purpose of these efforts 
make sense, I am concerned that a patchwork of regulation across the 
country will cause confusion for consumers and create an unnecessary 
burden on businesses.
    How would a national standard on cleaning product's ingredient 
communication benefit consumers in terms of the ability to access 
clear, consistent information regardless of where they live or where 
they purchase cleaning products?
    Answer. As a general matter, national standards benefit consumers 
in terms of the ability to access clear, consistent information 
regardless of where they live or where they purchase. They also benefit 
businesses engaged in commerce in more than one state, which only need 
to abide by one standard, and avoid conflicts among standards that do 
not align. The Environmental Protection Agency has particular expertise 
on these issues and regulatory requirements related to cleaning 
products; therefore, we would defer to their opinion on the effects of 
specific labeling or disclosure standards in this area. In the past, 
FTC staff has provided assistance to EPA and other agencies on 
developing consumer labels and would do so if needed in this area.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
  Hon. Rebecca Kelly Slaughter, Hon. Noah Joshua Phillips, Hon. Rohit 
                   Chopra, and Hon. Christine Wilson
    Question. Currently, per an order from the Centers for Disease 
Control and Prevention (CDC), a moratorium is in effect for residential 
evictions through June 30, 2021. On April 13, 2021, the CDC issued an 
updated FAQ document stating the following.
    Do landlords have to make their tenants aware of the CDC order and 
Declaration?

        The Order itself does not require landlords to make tenants 
        aware of the Order and Declaration. But other relevant law, for 
        instance the Fair Debt Collection Practices Act and the Federal 
        Trade Commission Act, may require landlords, or their agents, 
        to do so. Under these statutes, evicting tenants in violation 
        of the CDC, state, or local moratoria, or evicting or 
        threatening to evict them without apprising them of their legal 
        rights under such moratoria, may violate prohibitions against 
        deceptive and unfair practices.

    Landlords must otherwise comply with all requirements of the Order. 
Also, even if not legally required, landlords are encouraged to tell 
their tenants about the Order.
    Can you please describe the specific authority the FTC has in 
enforcing the CDC's eviction moratorium, as the aforementioned FAQ 
excerpt very broadly references laws under the FTC's jurisdiction?
    Answer. The Department of Justice has the authority to enforce the 
CDC's eviction moratorium order; it may initiate criminal proceedings 
as appropriate for violations of the order, seeking imposition of the 
criminal penalties provided under 18 U.S.C. Sec. Sec. 3559, 3571; 42 
U.S.C. Sec. 271; and 42 C.F.R. Sec. 70.18.
    The Federal Trade Commission (``FTC'') has the authority to enforce 
Section 5 of the FTC Act and the Fair Debt Collection Practices Act 
(``FDCPA''). Section 5 of the FTC Act prohibits unfair or deceptive 
acts or practices in or affecting commerce. 15 U.S.C. Sec. 45(a)(1). An 
act or practice is unfair if it causes or is likely to cause 
substantial injury to consumers which is not reasonably avoidable by 
consumers themselves and not outweighed by countervailing benefits to 
consumers or to competition. 15 U.S.C. Sec. 45(n). An act or practice 
is deceptive if it involves a material representation, omission or 
practice that is likely to mislead a consumer acting reasonably in the 
circumstances. See Federal Trade Commission Policy Statement on 
Deception, appended to Cliffdale Assocs., Inc., 103 F.T.C. 110, 174-83 
(1984).
    The FTC has the authority to enforce the FDCPA and any implementing 
regulations. The Consumer Financial Protection Bureau recently issued a 
rule, effective May 3, 2021, which addresses debt collector conduct 
associated with the CDC moratorium. Under the interim final rule, 
third-party debt collectors, as defined by the FDCPA, seeking to evict 
certain tenants for non-payment of rent must provide those tenants with 
clear and conspicuous notice that the consumer may be eligible for 
temporary protection from eviction.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Todd Young to 
  Hon. Rebecca Kelly Slaughter, Hon. Noah Joshua Phillips, Hon. Rohit 
                   Chopra, and Hon. Christine Wilson
    Question. The Cancer Moonshot is incredibly important to this 
country and early cancer detection is a critical part of opening up new 
opportunities to develop new therapies. I understand that GRAIL has 
made a breakthrough and developed a multi-cancer early detection test 
that can detect more than 50 cancers in an asymptomatic patient and is 
entered into a transaction agreement with Illumina, Inc.
    Can you elaborate on why the FTC is challenging this transaction?
    Answer. On March 30, 2021, the FTC filed an administrative 
complaint and authorized a Federal court lawsuit to block Illumina, 
Inc.'s proposed acquisition of GRAIL, Inc. (``Grail''). The complaint 
alleges that the proposed acquisition would likely diminish innovation 
in the U.S. market for multi-cancer early detection (``MCED'') tests, 
and potentially reduce the choice and quality of these tests and make 
them more expensive.
    According to the complaint, MCED tests could detect up to 50 types 
of early-stage cancer, most of which are not screened for at all today, 
saving millions of lives around the world. Grail is one of several 
competitors racing to develop and ultimately commercialize these liquid 
biopsy tests, which analyze a patient's blood or other fluid through 
DNA sequencing. Illumina is the only provider of next-generation DNA 
sequencing (``NGS'') platforms that are a viable option for Grail and 
other MCED test developers in the United States. Grail and each of its 
MCED test competitors must rely on Illumina's NGS platforms to 
research, develop, launch, and sell their MCED tests successfully.
    As the only viable supplier of an essential input, Illumina has 
several tools that it could use to harm Grail's MCED test competitors. 
For example, Illumina could raise prices charged to Grail competitors 
for NGS instruments and consumables; impede Grail competitors' research 
and development efforts; or refuse or delay executing licensing 
agreements that all MCED test developers need to distribute their tests 
to third-party laboratories.
    The complaint alleges that the proposed acquisition would give 
Illumina both the incentive and ability to disadvantage MCED test 
developers that pose a significant competitive threat to Grail, and to 
limit the competitiveness of any MCED product that it expects to 
compete closely with Grail's MCED test. Because Grail's MCED test 
rivals have no choice but to use Illumina's NGS platforms, they would 
not be able to divert from Illumina if it raises their costs or 
otherwise disadvantages them.
    The complaint also alleges that even if a viable substitute to 
Illumina's NGS platforms entered the market, it would take years for 
MCED test developers to switch to a platform other than Illumina's 
because they would have to reconfigure their tests to work with the new 
NGS platform, and in some circumstances, conduct new clinical trials.
                                 ______
                                 
Response to Written Question Submitted by Hon. Shelley Moore Capito to 
  Hon. Rebecca Kelly Slaughter, Hon. Noah Joshua Phillips, Hon. Rohit 
                   Chopra, and Hon. Christine Wilson
    Question. As you may know, many states are adopting or considering 
legislation as to how companies must communicate the ingredients that 
make up their cleaning products. While the purpose of these efforts 
make sense, I am concerned that a patchwork of regulation across the 
country will cause confusion for consumers and create an unnecessary 
burden on businesses.
    How would a national standard on cleaning product's ingredient 
communication benefit consumers in terms of the ability to access 
clear, consistent information regardless of where they live or where 
they purchase cleaning products?
    Answer. The Environmental Protection Agency has particular 
expertise on these issues and regulatory requirements related to these 
products; therefore, we would defer to their opinion on the effects of 
specific labeling or disclosure standards in this area. In the past, 
FTC staff has provided assistance to EPA and other agencies on 
developing consumer labels and would do so if needed in this area.

                                  [all]