Yesterday’s FTC Announcement: Reminder of Broad Commission Authority; Portent of Things to Come for FDA Regulated Companies?February 13, 2020
Yesterday’s announcement by the U.S. Federal Trade Commission (“FTC”) that it was issuing so-called “6(b) Orders” to heavyweights in the tech industry at first glance, might not seem relevant to most readers of the blog, but it is. As the announcement reminds us, “Section 6(b) of the FTC Act . . . authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose.” We’ve previously posted about the FTC’s use of 6(b) authority to compel information from companies on their practice in marketing food to children. Moreover, because of the “vital importance of quality healthcare services at competitive prices to every American consumer” the statement of FTC Commissioners Wilson and Chopra in connection with the announcement regarding big tech specifically asks the Commission to “next” use its 6(b) authority to focus on the healthcare sector, specifically calling out pharmaceutical companies, hospitals, and dialysis chains. These FTC Act 6(b) orders, seek significant amounts of documents and data from those who receive them. For example, the FTC’s Order to Alcoholic Beverage Manufacturers sought detailed information “on the effectiveness of voluntary industry guidelines for reducing advertising and marketing to underage audiences.” Recipients of 6(b) orders need to understand their rights and responsibilities. The FTC’s own website explains the basics:
As with subpoenas and CIDs, the recipient of a 6(b) order may file a petition to limit or quash, and the Commission may seek a court order requiring compliance. If a party fails to comply with a 6(b) order after receiving a notice of default from the Commission, the Commission may commence suit in federal court under Section 10 of the FTC Act, 15 U.S.C. Sec. 50. After expiration of a thirty-day grace period, a defaulting party is liable for a penalty for each day of noncompliance. Id.; Commission Rule 1.98(f), 16 C.F.R. Sec. 1.98(f).
As a refresher, the FTC consists of five Commissioners, no more than three of which can be members of the same political party. Commissioner Wilson is one of three Republicans and Commissioner Chopra, one of the two Democrats currently on the Commission. Given the seeming bipartisan interest in the healthcare sector, it seems reasonable to expect a 6(b) order later this year. In any event, we’ll continue to monitor this and other FTC developments.