An oversight hearing to examine the Federal Trade Commission.

Good morning. The Senate Committee on Commerce, Science and Transportation will come to order. Uh, I appreciate everyone being flexible with the time. I know we were gonna uh gavel in at ten, but there was a Senate Foreign Relations Committee mark-up that was also at ten, so. Part of the joys of this job is trying to be two places at once, so thank you for everyone for the flexibility in shifting this a little bit later. Uh, I wanna welcome Federal Trade Commission Chairman Andrew Ferguson and Commissioner Mark Metter. Thank you both for being here today. Uh, let me begin by congratulating Chairman Ferguson. In just one year, the FTC has returned more than three point two billion dollars in ill-gotten gains to consumers. More than the commission returned during the entire Biden administration, more in one year, than the Biden administration did in four. And just this morning, the FTC is filing a settlement with major advertising firms that had effectively colluded to boycott conservative news sites. Whether advancing free speech or preparing to enforce the landmark Take It Down Act, which holds big tech accountable for deepfake revenge porn, or stopping deceptive ticketing practices, It's clear you've been busy. It's a job well done, and I look forward to hearing more about the FTC's recent successes. In nineteen fourteen, Congress created the FTC in line with President Woodrow Wilson's vision of an expert, independent and impartial agency that would supposedly put politics aside. Congress delegated broad authority to protect consumers from unfair or deceptive acts or practices and unfair methods of competition. It intentionally did not define or articulate these terms, believing that a flexible, adaptable FTC could use its expertise to develop them through case-by-case enforcement with courts serving as the check. But President Wilson's fever dream of an omnipotent bureaucracy, precisely weighing benefits and costs free from grubby politics, has not come to pass. At times, the FTC has stretched its powers far beyond Congress's mandate, inserting itself in nearly every sector of the economy in ways unaccountable to the public. Rather than rely on Article three courts, the supposed backstop, the FTC has used its administrative courts. Rather than prove its case in court, the FTC is too often sued to swiftly settle. imposing detailed, forward-looking obligations and consent orders that read more like legislation than case-specific remedies. Given the FTC's broad investigative powers, businesses that dispute allegations of wrongdoing often have no choice but to comply rather than risk the reputational harm that can stem from a public fight. There have been times when the FTC has exercised such tools judiciously. There's no doubt the FTC's antitrust and consumer protection missions remain critical. I saw firsthand when I headed the FTC's Office of Policy Planning, working alongside skilled staff on complex issues of technology, competition, and consumer protection. But when Congress delegates broad powers to an agency without guardrails or limits and without conducting consistent oversight, that agency inevitably will test and expand its authority. It's why during the Biden administration, FTC Chairwoman Lina Khan went well outside the agency's legal authority, and instead pursued a weaponized political agenda. It was hardly the first time the FTC unlawfully expanded its author authority. Notably, in the nineteen sixties and seventies, amid a period of FTC, massive overreach, and rulemaking binges. Even the Washington Post dubbed the agency the quote "national nanny". How did Congress respond then? It exercised its own authority and refused to fund a rogue agency until the agency instituted reforms. That history is instructive. In light of the Supreme Court's decision in EPA versus West Virginia, and in low bright as well, Congress has a clear responsibility to review the authorities of each agency, including the FTC, to more carefully define and limit them. That's how we keep agencies accountable to the American people. It's shocking, then, that it's been nearly six years, the entirety of the Biden administration and the Democrat-controlled Senate, since the FTC commissioners appeared before this committee for an oversight hearing. Instead of asking hard questions of the FTC, Congress has treated it like a regulatory genie. Whenever a problem emerges, particularly one involving new or rapidly evolving technology, we make a wish and say let the FTC handle it. For example, Congress has considered legislation to have the FTC regulate the totality of the internet through sweeping data privacy rules. ai setting up f the ftc as the national speech police and college sports replacing the role of universities in the n c double a when congress does give ftc new authorities or responsibilities it never seems to revisit the existing broad powers the ftc has misused in the past the last time congress meaningfully acted to restore accountability at the ftc was nineteen ninety six. Thirty years is long enough for Congress to go without seriously considering FTC reform. One clear area of need is consent decree reform. Time and again, the Commission has saddled companies and their workers with multi-decade orders that go far beyond correcting for any alleged misdeed. Done right, consent decree reform has the potential to eliminate red tape, lower prices for consumers, increase investment, create jobs, grow the economy, prevent censorship of American speech, and hold bureaucrats accountable. I'm hopeful that my colleagues and I might be willing to work together on this. I will say there are other areas where the FTC can and should do more within its core areas of expertise. This committee has already acted by passing the Take It Down Act. And many of my colleagues on both sides of the dais, put forward thoughtful practical bills to crack down on deceptive and hidden fees, address bots in the ticketing market, and better protect Americans from frauds and scams. As I noted, during the Biden administration, this committee did not conduct a single oversight hearing into the FTC. Even though this is the Trump administration and it will present an opportunity for senators of the opposing party to ask costal questions, This committee believes oversight is a responsibility. It's why we've had already an FTC oversight hearing and why we're having this FTC hearing. Because the Senate is going to do its job. I will say today I look forward to hearing from Chairman Ferguson and Commissioner Metter on how they are working to rebuild the FTC's morale and legitimacy. One of the saddest legacies of Chairwoman Kahn was the FTC, an agency with lawyers and economists who who loved their work, the morale plummeted. And when the agency lost sight of its statutory mission and instead became a partisan attack dog, that understandably had a negative effect on the professionals who work there. So I look forward to hearing how the FTC is now focused on faithfully enforcing those laws that congress has enacted rather than stretching beyond them. Right, can you remember, Cantwell?

Thank you, Mister Chairman, and uh good morning to the witnesses here today. Obviously the FTC is our primary agency for continuing to protect consumers, promote competition, and to stop unfair and deceptive practices. So neutering the FTC, as this administration has done, should have gotten a response and outcry by everyone for the fact that this is should be a bipartisan organization nominated by whoever is president at that time. I would like to begin by noting who's not here today. Commissioner Rebecca Slaughter, former Commissioner uh Bedoya. They're not here because President Trump illegally fired them without cause, in direct violation of the Federal Trade Commission Act and the Supreme Court precedent. The FTC, which are predecessors on the Senate Committee on Interstate Commerce, helped draft say that the commissioners can only be fired for inefficiency, neglect of duty, or malfeasance in office. And yet the president fired commissioners Slaughter and Bedoya for no reason at all. Congress designed the FTC to be an independent agency so that it would serve the public good, not the president's allies or donors or special interests. Congress rightly understood that impartial decision-making was critical to the credibility and effectiveness of the FTC. It also recognized that bipartisan perspectives would contribute to better outcomes. That is why Congress required that no more than three of the five commissioners come from one party. And commissioners were given staggered seven-year terms to ensure that they had enough time to learn the issues and promote continuity at the FTC. Despite Congress' clear direction, President Trump has eviscerated the FTC's independence and eliminated the voices of dissent. And that means for over a year there have been no Democrats on the commission. That's not much of a bipartisan commission. And yes, Mr. Chairman, we did have oversight over the FTC. In fact, we conducted meaningful oversight. One example is when the F in April twenty twenty one, a hearing on the full slate of FTC commissioners to oversee how the commission was combating pandemic fraud during COVID. Afterwards, the FTC took actions based on the information and returned tens of millions of dollars to taxpayers in september. We held a hearing on two republican nominees, also uh uh when the president's uh a legal firing. So, yes, we have had oversight. I want to uh make a statement for commissioner Slaughter and explain that the uh commissioners are critical to pushing the commission, quote, quote, pushing the commission to be more effective, quote, and to provide transparency and accountability in the agency's end quote. I am concerned that one critical question commissioner slaughter raised in her statement, the FTC's decision to settle with a dating website service match and ok cupid without restitution or civil penalties. These companies deceived consumers and violated their privacy. But instead of putting consumers first and insisting on restitution of penalties as part of the settlement, the FTC simply ordered match and ok cupid not to be deceptive in the future the ftc should be vigorous in protecting consumer privacy the laws and on deception the ftc slap on the wrist settlement failed on both fronts so i want to thank commissioner slaughter for attention to that issue and i want to be clear the problem here is not just that commissioner slaughter and bedoya were illegally removed the problem is that instead of being a consumer watchdog the ftc is now turned into And every agency with jurisdiction should be laser focused on the affordability crisis. Grocery prices are up thirty percent since January, twenty twenty, outpacing both wage growth and overall inflation. In my state, a family of four now pays an average of one thousand two hundred dollars a month for groceries if they can afford it. And over the last thirty years, we've seen grocery industry become more and more consolidated and grocery chains have used anti-competitive practices to keep competing grocery stores out of their local community. For example, Albertson's in Bellingham closed in twenty sixteen. It created a food desert in Birchwood neighborhood. Albertson's then included a land restriction when it sold its property to prevent another grocery store from actually moving in. Albertson's ultimately removed their restrictions after the Washington attorney general opened an investigation about whether they had violated And earlier this year, Washington state became the first state to ban restrictive covenants that ultimately raid fruit food prices by decreasing competition in local markets. But instead of combating grocery retail prices that can raise food prices, or protecting consumers from surveillance pricing, the FTC instead voluntarily dismissed a suit against Pepsi for alleging, allegedly, concluding with Walmart to raise its wholesale prices for other grocery retailers. Telling this dismal tell tellingly this dismal dismissal came shortly after Pes- Pepsi made a major contribution to the president of the United States. What American consumers really want is the FTC to make sure that bad actors are not exploiting things, including oil prices today, and I will in the future reintroduce my legislation that gives the FTC even more authority in going after oil markets. American consumers, for the commissioners who were here uh the northwest and most of the west coast is an isolated market which means anytime you have a shortage we pay extra prices there's no relief coming so in that isolated market it's easier to have manipulation um and while the scams have grown exponentially over the last five years the ftc has been operating without its so-called thirteen b authority to get money back for departed consumers for more than forty years this was used as the ftc's return funds that were illegally taken from consumers uh between twenty sixteen and twenty twenty the ftc returned uh more than eleven billion dollars to consumers when they had this authority but when the supreme court struck down that authority um they've returned just two billion dollars to consumers so i will be asking questions about that and continue to focus on what we can do to get the consumer protections, particularly in a market of inflation, how we can get empower the ftc to be even more aggressive. Thank you, Mister Chairman.

Thank you to ranking member Cantwell.

And I would just like to add A statement for commissioner slaughter to the record.

Uh, without objection, it will be added to the record. Uh, I will note also for the record that this hearing, uh, includes all of the currently serving commissioners on the ftc on march eighteenth twenty twenty five president trump fired the two democrat commissioners ftc commissioner rebecca slaughter and olvera bodoya uh in doing so immediately prompted litigation which the president knew that it would uh since that time commissioner bodoya has formally resigned and taken another job so i i cannot imagine any universe a former commissioner no longer serving and working elsewhere would be included in the hearing and and commissioner slaughter brought litigation challenging the firing that litigation was initially successful she prevailed in the us district court for d. c. and she also prevailed in the d. c. circuit but the d. c. circuit is not the final voice and in september twenty twenty five chief justice roberts put a stay on the d. c. circuit's decision which allowed president trump's firing to stand supreme court court heard oral arguments in december of twenty twenty five in trump versus slaughter uh and a decision is expected in the next couple of months uh i believe the court is likely to uphold the the firing and in particular uh that the case of humphrey's executor is gonna be overturned i think it should be overturned as i read uh article two of the constitutional executive power is vested in one president of the united states uh and i think humphrey's executor was a mistake the court made i believe this court is going to correct but the bottom line is neither commissioner bodoyer nor slaughter are current commissioners of the court they have both been uh terminated and and the supreme court has stayed any order to the contrary um with that i want to introduce our witnesses

mr. chairman if i could just mr. chairman do you believe in a bipartisan commission and do you believe in the nominations of presidents or do you think in the future we're just gonna continue this process and prosecute individual commissioner so that you can have a commission controlled by one party

i i don't know what subsequent presidents are gonna do either republicans or democrats i don't know if they will appoint uh bipartisan commissions or not what what i do believe is the president had the authority to make the determination to fire those executive branch employees just like the president i believe has the authority to fire any other executive branch employee and and i think the court is going to overrule humphrey's executor and come to

Well, just so I could, and we'll get to our commissioners, yeah, I'm against a lot of the president's firing of various people, including thousands of scientists that could be providing us better information today so yes no doubt I disagree with the president on firings thank you.

That that is fully clarified for the record. Our first witness is Mister Andrew Ferguson, chairman of the federal trade commission. He was designated as chairman on January twentieth, twenty twenty five by president trump, and he has served on the commission since twenty twenty four. Our second witness is Mr. Mark Metter, Commissioner at the FTC. He was nominated by President Trump on January twentieth, twenty twenty five and confirmed by the Senate on April tenth, twenty twenty five. Chairman Ferguson, you are recognized for your opening statement.

Thank you, Mr. Chairman. Chairman Cruz, Ranking Member Cantwell, and members of the committee. Thank you for the invitation to testify about the Federal Trade Commission's contributions to the Trump Vance Administration's many achievements in protecting consumers. and promoting an- a competitive economy. I am particularly pleased to testify alongside my colleague and friend, Commissioner Mark Metter. His extensive experience as an antitrust lawyer in the federal government and the private sector has been a valuable tool to the commission as it executes on its mission to protect the American economy and I am grateful that this committee, and the Senate, swiftly confirmed him. Since the very first day of President Trump's second term, the commission has carried out its mission to protect the public from deceptive or unfair business practices, from unfair methods of competition by aggressively wielding the power bestowed upon us by the American people through their elected representatives in Congress. Our antitrust and consumer protection laws establish the limits of acceptable conduct in business. And Congress has charged us with ensuring no business, no matter how powerful or large, transgresses those limits. In just one year, the FTC under President Trump returned more than three point two billion dollars to American consumers. That's more relief provided to consumers in one year than the Biden administration provided in four. Our enforcement actions have rooted out illegal br- business practices that affect Americans of every stripe, whether renting a home, buying a car, subscribing to a service online, or purchasing tickets for live entertainment. Mindful of our congressional mandate, we have successfully prosecuted several business for COPPA violations, ensuring greater safety for our children and their data online. And we are litigating two groundbreaking cases under the Botts Act, the first time the Commission has ever litigated cases under that important law. And we are working assiduously to prepare for robust enforcement of one of President Trump's and this Congress's greatest legislative achievements, the Take It Down Act. Under President Trump's leadership, the FTC has also taken an aggressive approach to enforcing the law against anti-competitive mergers in conduct. In the past year, we've challenged anti-competitive mergers in conduct that would have, adversely affected competition in healthcare, housing and home construction, assisted living facilities, the oil and gas markets, military and commercial aircraft, and semiconductors. We sued Redfin and Zillow for an illegal combination that could raise rental prices across the country. We're litigating against John Deere for preventing farmers from preparing their own tractors, and we're litigating against two major pesticide manufacturers for maintaining illegal agreements that have increased the price of pesticides for American farmers. We forced America's truck manufacturers to abandon an anti-competitive agreement that would have increased the cost of shipping across the country. And we are continuing the monopolization case against meta that President Trump brought in his first term. In sharp contrast to the previous administration, which expressed hostility towards structural remedies and merger enforcement, we've had great success in securing major settlements with scores of companies that will ensure their mergers don't injure competition. Negotiating hard for structural remedies that fully mitigate potential anti-competitive harms maximizes the return on Congress's investment in the FTC's mission by freeing up resources to pursue still more anti-competitive mergers and conduct. In keeping with President Trump's directive to make health care more competitive, innovative, affordable, and higher quality, we've made a special effort to target illegal business practices in health care. including the creation of a health care task force charged with expanding our enforcement capacity and partnerships with other government agencies and law enforcement. Just a few months ago, we negotiated a landmark competition and consumer protection settlement against one of the largest pharmacy benefits managers in the country that will save Americans billions of dollars on prescription drugs, impose radical new pricing and transparency requirements, and protect thousands of community pharmacists from abusive reimbursement practices. We also brought two major merger challenges in health care markets, recently scoring a victory in federal court that blocked a proposed merger that would have eliminated competitive prices in the market for lifesaving medical devices that treat severe heart disease for Americans. And we have focused on protecting America's workers. One of my first actions as chairman was to launch an FTC wide labor task force that would help us identify and prosecute deceptive unfair and anti-competitive labor market practices. In this past year we returned n- hundreds of millions of dollars to workers who were cheated out of their hard-earned pay by false or misleading terms of employment or business opportunities. We've secured settlements permanently banning certain businesses from marketing deceptive business opportunities and imposed the largest ever penalty for a violation of the con- Commission's rule to protect franchisees. And we have freed tens of thousands of American workers from unlawful non-compete and no hire agreements. protecting their wages, mobility, and freedom to open competing businesses. The substantial accomplishments of the FTC under President Trump would not have been possible without the incredible work of our staff. Day in and day out, these noble civil servants worked tirelessly to keep our markets fair and free by enforcing our nation's antitrust and consumer protection laws. The FTC boasts some of the most talented litigators, investigators, economists, statisticians, and paralegals in the entire federal government. I consider it an honor to lead them in our common calling of protecting our fellow Americans from monopolies and fraud. Thank you again for your invitation, and I look forward to your questions.

Thank you. Commissioner Metter, you're recognized for your opening statement.

Thank you, Chairman Cruz, Ranking Member Cantwell, and members of the committee. I appreciate the opportunity to appear before you today. I'm deeply grateful to President Trump for his leadership,

and the opportunity to serve as a Commissioner on the Federal Trade Commission, the agency where I began my career as a Staff Attorney in the healthcare division. It is truly the honor of a lifetime to serve our country and the American people in this role. I also want to recognize and thank the talented and dedicated staff at the FTC. Every day they work tirelessly to protect consumers and to promote free, fair, and open competition. Their commitment to public service is unmatched, and I am proud to work alongside them. I'm also, of course, proud to work alongside Chairman Ferguson. I'm grateful for his leadership and for charting the right course for the FTC, even before I joined the commission. I look forward to continuing our collaboration in service of the American people. The FTC has a dual mission, to protect consumers from unfair and deceptive practices and to promote competition across the economy. This mission puts the FTC in a unique position as a law enforcement agency. At a time when markets are evolving rapidly and new technologies are emerging, the FTC remains guided by its mandate to protect the interests of American consumers. A key focus of our work has been prioritizing and tackling affordability issues. We have pursued corporate misconduct that drives up costs for Americans in essential sectors like health care, energy, housing, and food. Because when markets are not functioning properly, American families pay the price. And we have already seen meaningful rev- results in just the first year of this administration. Through our merger enforcement program, the FTC has successfully blocked unlawful transactions and caused parties to abandon anti-competitive deals that have threatened to raise prices, including in markets for critical medical devices. We have also secured settlements that preserve robust competition across a range of industries, including retail goods, health care services, defense, and semiconductors. At the same time, the Commission is delivering significant consumer protection wins. We have taken action against companies employing deceptive user interface designs, unfair and misleading ticketing practices, and other forms of misconduct that distort consumer choice and impose hidden costs on Americans. Of course, the FTC's effectiveness rises and falls with the quality of our enforcement tools, and Congress has provided us with many important authorities that enable our work on behalf of the American people. With that said, it would make an enormous and immediate difference for Congress to authorize the FTC to obtain equitable monetary relief for consumers under section thirteen B, of the FTC Act. For decades, the commission relied on this provision to return money to consumers cheated and harmed by illegal conduct. However, the Supreme Court, correctly in my view, made clear in its twenty twenty-one AMG decision that section thirteen B in its current form does not authorize the commission to obtain monetary redress for consumers. That decision has had far-reaching consequences. For example, in a recent case involving ILO group, formerly known as MindGeek, the operator of PornHub and other pornography websites, The commission, along with state partner Utah, charged that defendants engaged in egregious misconduct involving the distribution of child sexual abuse material and non-consensual sexual material. While we were able to secure strong injunctive relief to prevent future misconduct we were unable to obtain what would have been millions of dollars in compensation for exploited victims. As I noted at the time, the commission currently lacks the power to obtain appropriate financial relief for those victimized by such conduct. Since I joined the Commission in April, I have come to learn that this example is not an outlier. Across a wide range of cases, billions of dollars remain in the pockets of wrongdoers instead of being returned to injured consumers. This dynamic also affects what investigations and enforcement actions the FTC devotes its resources to pursue. To be clear, our staff has worked creatively and diligently to utilize the authorities that continue to permit recovery of consumers' money wherever possible, and in many cases they have succeeded. But those authorities do not always apply, and they are often less efficient and less effective. Restoring the ability to seek equitable monetary relief pursuant to section thirteen B would be one of the highest returns on investments Congress could make. Historically, for every dollar Congress appropriates to the FTC, the agency has returned many multiples of that amount to consumers. There are very few areas of government where the return on investment is so clear and direct. Without a legislative fix, we are operating with one hand tied behind our back. Bad actors know this, and in some cases are able to retain ill-gotten gains simply because we lack the authority to force them to return them. A bipartisan fix to thirteen B would restore a critical enforcement tool, and ensure that bad actors face the full consequences when undertaking illegal conduct. In the meantime, we will continue to use every tool within our existing authority to protect the American people. But unless and until Congress acts, we cannot fully deliver justice for American consumers. We urgently need your help. Thank you again for the opportunity to appear before you today. I look forward to your questions.

Thank you to both of the witnesses. Uh, all right, I wanna start on the topic of sports. We've been having a lot of discussions in Congress on how to fix the wild west of college sports. College sports as we've known it for a decade, one of the very few cultural unifiers we have right now, is in deep peril. Basic rules on student athlete eligibility, transfers, tampering and other n c double a standards to stop cheating are right now unenforceable due to constant antitrust litigation. The current system is unsustainable. Without a legislative fix. I fully expect major division one schools to begin canceling non-revenue programs and begin cutting athletic scholarships. We're seeing that happen. week after week after week. Now, some of my colleagues had suggested that the answer is the federal government should take on the role of overseer of college sports. They'd have the FTC oversee or execute many of the duties that universities and the NCAA has traditionally managed prior to recent court cases. Let's play this out a bit. Imagine the FTC taking a vote on whether to enforce a student athlete's eligibility to play. Or to file a lawsuit regarding an athlete's decision to enter the transfer portal. Or for instance, maybe the commissioners opened an investigation into the decisions of which teams are to play in the college football playoffs. By the way, I still think Texas should have. Mister Chairman, in your judgment, would expanding the role of the FTC chairman to be the new commissioner of college sports make college sports more politicized or less.

I have a strong preference not to be the commissioner of college sports, whatever you all are planning on. Look, the FTC is really good at the stuff within its core century-long competence, competition and traditional consumer protection, fraud and unfairness. Um, I think that over the course of time, the FTC has developed a reputation in some parts of Congress as sort of the place to put a grab bag of miscellanea. And I think the further that that miscellanea gets from our core competence, the less skilled and adept and expert the FTC is. Um, uh, you know, I I think Haize, for example, a a law, um, totally understand why Congress passed it, understand why they put it in the FTC, but pretty far removed from the type of thing the FTC is really good at. We've gotten good at it, but it's not our core competence. And so I think placing general regulatory authority over college sports, which has very little to do with competition and traditional consumer protection, and the FTC would not play to our strengths and would not be a particularly good use of the FTC.

So look, I agree with you that that is not uh within the core competency of the FTC and and would be a foolish policy decision that would be bad for the FTC and bad for college sports. Let's turn to a different topic. Uh, AI. During the Biden administration, the FTC pursued a notice of proposed rulemaking. relating to AI and algorithmic pricing. Although the proposal was never published, the FTC's analysis is very relevant for today's date debate about AI regulation, particularly since the FTC's proposed rules bore many similarities to state laws like Colorado and even foreign laws like the EU AI act. Based on the FTC's assumptions and research, What did the FTC economists estimate the cost of complying with the proposed FTC rule would be? Effectively functioning as a fee or tax on the use of AI.

Um, Mister Chairman, my staff has enjoyed very much working with your staff on this issue. Um, the the precise uh uh analysis of our economists is protected by delivery of process privileges, as my staff has discussed with yours. But I am able to say that the preliminary economic analysis is that the costs were staggering. And I can also say from having worked with my foreign counterparts, um, in i- i- i- and and learned a lot from their attempted implementation of the AI act, that comprehensive, early stage, generalized regulation of AI, as the AI act does in the European uh, union, is a recipe for killing innovation. Yes, we need a national framework as the President has articulated, to protect children, communities and creators as we promote AI innovation. But the approach of the AI Act in the European Union has been nothing short of a disaster for fomenting innovation in the EU.

Well, I agree with you there as well. Uh, I would note, uh, the FTC's expert opinion, and, and when I was at the Commission there were seventy-five PHD economists

Um, I believe it's a little higher than that, but a comparable number.

Uh, the FTC's expert analysis is that imposing the rule that the Biden administration wanted to impose would have imposed, I think the term you just used was " staggering costs". Uh, yesterday in my office you used a different term, you called the cost " astronomical". uh in in either level there there has been been reporting that it is that the that the costs were estimated at more than sixty five billion dollars in regulatory costs over ten years sixty five billion dollars that would be inflicted on consumers that would drive up costs and that would stifle innovation um thank you mr. chairman commissioner metter uh ranking member Cantwell you're recognized

thank you mr. chairman i i just have quickly not that i i have some very uh critical issues here on pricing for sure but um i i am sure you would agree that this agent issue of people going out and recruiting athletes with no reference of skill or representation that could be a deceptive practice and at the ftc in its normal efforts could be looking at deceptive practices by individuals who are misrepresenting themselves

Yeah, and Congress has passed a law that addresses this issue, um, the SPARTA, and we issued warning letters to a bunch of major, um,

Yeah.

colleges and universities on those lines.

We we my my colleagues here, Senator, uh, Blackburn and Cornyn and myself have follow on legislation to that. So we feel like the problem, uh, continues. Trust me, a lot of young young men and women being taken advantage of. But let's turn to this, uh, grocery price issue, which I think is really plaguing America.

so i i i actually was not aware of this issue until i became i became uh a commissioner and learned that this is also an issue that has arisen in some of our partner states um as in you know foreign countries um and so i i can't comment on the existence or specifics of ftc investigations but this is an issue that i do think warrants um careful attention about whether land covenants or other sort of like deed obligations can be used to restrict robust competition in any industry but particularly a real estate heavy industry like groceries.

Well, we we we appreciate. I mean, we we had people write write on to camera, basically said they raised prices because they could and that lack of, you know, competition because people would have to drive further. So we were definitely outraged. So take a look at Washington's law. Um, and do, Mister Meter, did you have a comment about that?

I was just going to echo that and say that, you know, these sorts of kitchen table issues are a top priority for the commission. And so anytime you raise concerns about the ability of competing grocery stores to enter or expand that's important to us and we'd be happy to take a look at it.

Well, and what about surveillance pricing? I mean, I think you guys have looked at a a a study. Um, but then somebody it's now been a year since the release of those research summaries. When do you expect a final report on the six B investigation on surveillance pricing?

So generally, um, can't talk about like ongoing, uh, uh, the like content of six B studies. I can say this. On the question of personalized pricing, a couple things. When we learned about the alleged, uh, personalized pricing experiment being conducted at instacart without consumer's knowledge we opened an investigation and shortly thereafter they cancelled the publicly announced that they were cancelling the experiment um and so i take the issue of personalized pricing seriously i have instructed staff to begin exploring whether the commission needs a policy statement on whether certain disclosures ought to be required if someone is using highly personalized pricing to set individualized prices Um, and, you know, I I again, I don't because the issue is new, because we remain uncertain about

But sometimes, you know, theft and crime, does it, you know, can be new. You just have to so I'm asking when when would you expect a final report on that investigation which would then lead you to these policies?

So I I I can't give an answer to that because I don't know. But I will say that in the rulemaking that we announced yesterday, in the ANPRM, if you go on delivery, um, grocery delivery, uh uh fee transparency that we announced yesterday. A lot of the questions that we have asked the public and industry to comment on, that will inform how we decide to proceed with the rulemaking, relates to personalized pricing in grocery and food delivery apps. This is an issue that we are taking seriously.

Mister Major.

No, I I agree with that approach. I look forward to seeing the report that staff prepares, uh, and can echo Chairman Ferguson's comments that this is a top priority for us.

Well, it it needs to be a robust investigation because on top of of everything else i mean when people are admitting that they are raising the prices and then in this particular case that it doesn't mean whether it's an airline seat or a grocery store price you know the the public is frustrated um do you agree that we need to restore the thirteen p authority as soon as possible

absolutely as i stated in my open remarks this is uh an imperative thing for the commission.

yes i i have been imploring the senate and the house to do this since my confirmation hearing in twenty twenty three in statement after statement in cases that we have brought settled or litigated i have noted that we could do more for american consumers in all sorts of cases including one that you mentioned in your statement or your opening statement ranking member um that we are unable to do because congress has not given us this important authority

well i'd i uh mister chairman if i could just if the ftc no longer brings section five claims before the a l j that means that we no longer able

Thank you. Senator Curtis.

Thank you, Mr. Chairman. Gentlemen, I regularly hear from constituents about what they describe as predatory practices in the time-share industry, like high-pressure sales tactics and misleading claims about cost and resale value. The Better Business Bureau reports receiving thousands of complaints against time-share companies each year representing millions of dollars in consumer losses. How is the commission tracking these deceptive and unfair practices in the time-share market? What trends are you seeing? And based upon what you're seeing, do these patterns rise to the level of concern warrants additional enforcement or scrutiny. Mister Chairman.

Um, Senator Curtis, we are aware of these concerns. Um, the FTC operates the nation's premier consumer complaint apparatus into which law enforcement agencies from coast to coast tap in to um examine, to open law enforcement investigations and to examine trends. We have examined this exact question. Over the last several years, we have not seen an increase in the number of reports relating to timeshares, But the alleged loss for each of those reports has gone up substantially. So, um, I don't know if the, you know, number of alleged, uh, time share deception is going up, but the rate at which people are allegedly losing money to them has gone up. We are aware of this issue. We are taking it seriously. And we agree with you, this is something the commission needs to look at.

Thank you. I would welcome any, uh, follow-up with my office in keeping us posted on that.

More than happy to work with you, Senator Curtis.

Thank you. Um, in the waning days of the Biden administration, Lena Cohn's two proposed rulemaking makings related to earnings claims. These proposed rules disproportionately target the direct selling industry which represents a substantial part of the Utah's economy. A recent independent study by the Phoenix Center has identified significant flaws in the proposed rules cost-benefit analysis, including overstated benefits and a failure to fully account for key assumptions. Your FTC has demonstrated just this week that it already has authority to take enforcement action against bad actors, further proving the irrelevancy of the proposed rules. So my question is, why haven't hasn't the FTC withdrawn these Biden era rules?

Senator Curtis, as you pointed out, this week we brought several enforcement actions, um, involving, um, what I'll call bad apples in the direct selling industry. Lots of honest workers, business owners in the direct selling industry, and it is important that we root out the bad apples. But as c- my colleague, Commissioner Medder, very eloquently explained in his opening statement, the fact that I can't pursue consumer redress for section five violations in the absence of a rule, by and large, means that in cases involving bad apples in the direct seller industry, which is all that we're worried about is just the bad apples, I can't put money back in wronged consumers' pockets with section five. With a rule, I could. And so what we are doing at this point is we have undertaken our lawful enforcement regime, regarding bad apples in the direct seller industry is continue to examine, is the absence of the ability to put money back into consumers' pockets handicapping our ability to enforce our consumer protection laws in this industry? And if the answer is yes, I think the possibility of a rule making needs to be on the table. Now, the rule making would be lawful, we would check every procedural box, which my predecessor routinely failed to do, but it is important as we have continued to bring forth lawful section five claims in this industry, that we assure ourselves that section five, without the ability to put money back in consumers' pockets, is sufficient. And if it's not, I think a rulemaking needs to be part of the discussion.

I- in regards to this report, let me let me raise concerns about the underlying analysis, whether the benefits of this proposed rule justify the cost, particularly for legitimate actors. And I I encourage you to withdraw it. I'd like to, Mister Chairman, ask unanimous consent to enter the Phoenix Center study into the hearing record.

Without objection.

And let me just ask you to balance, I understand the point that you make, but I hear over and over again, and it's not just in this industry, that clear rules of the road don't shift dramatically, that people know what to expect, and by having these underlying rules out there, it it it's so that you can take advantage when you need to of the bad actors, severely limits the good actors' ability to plan and prepare and have stability in their businesses. So I would really ask you to think about that, that delicate balance of um, uh, imagine if you had a business and, and, and there was a big hammer out there that somebody could choose to whack you on the head, just because they need the ability to, to whack bad actors on the head. And, and how that imp- it impacts your whole business, your employees, your business model, and everything else.

Uh, I, I totally agree with you. The balancing is not only prudent, it's required by the laws Congress has established governing our rulemaking authority. And on that point, if the commission were ever, and I'm not saying we are, consider picking up those rules again and beginning the rulemaking process again, we would be aiming at one issue and one issue only, fraud. These would not be to regulate the direct seller industry. It would be to weed out the fraudulent bad actors and put money back in people's pockets. But that's what this would be about, not regulation, fraud prevention and only fraud prevention.

Understand that, and and I'll only use just a few seconds to make my point. But imagine what that does to the good actors so that you can have the ability to, to hammer the bad actors, right? To, to just know that maybe not everybody is always going to exercise that with as much restraint as you, and they have to take into consideration, right? Any chairman or any, any, any situation where somebody can pull that rule out and, and use that, that hammer to whack them on the head.

I totally understand. I agree with you that we would have to be mindful that we won't always have people here like Commissioner Metter and I to make sure that we follow the rules of the road. And that would be accounted if we ever undertook a rulemaking, that would be accounted for.