NEWS19 July 2010

MRA relieved as Congress rejects move to expand FTC powers

Government North America

US— An attempt to increase the power of the Federal Trade Commission (FTC) has been ditched by Congress – a move welcomed by the Marketing Research Association (MRA), which feared that industry self-regulation would be put at risk.

The proposed expansion of FTC powers was contained as a provision within the Wall Street Reform and Consumer Protection Act.

Had it passed with the rest of the act last week, the provision would have given the commission the authority to issue rules quickly and with minimal public comment, and immediately fine companies that didn’t adhere to those rules.

Currently the FTC must provide advance notice of proposed rule-making, and interested parties have a legal right to present and dispute comments in an open hearing. Rule-breakers are only fined after the FTC has worked with the offending company to bring them into compliance with the regulations.

Howard Fienberg, the MRA’s director of government affairs, said: “Current FTC procedures prevent the agency from micro-managing your business or swiftly putting you out of business with minimal notice or debate. An unbridled FTC could put an end to the successful self-regulation of the research profession.”

As an example, the MRA said an FTC with expanded powers could almost unilaterally set national legal standards for what constitutes a ‘representative’ sample and ‘good’ survey research, and levy fines and penalties on companies and their suppliers where companies are accused of violating those standards.

MRA expects the issue to resurface again soon, as it says both the chairman of the House Energy & Commerce Committee and the Senate Commerce Committee are “intent on FTC expansion”.

Fienberg said: “MRA looks forward to a thorough and public debate on reauthorising the powers and authority of the FTC, rather than an ill-considered provision slipped into a massive and unrelated piece of legislation.”