Ad Groups Warn of FTC Power Threat

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Advertising trade groups including the Interactive Advertising Bureau sent a letter to the Senate Commerce Committee to remind legislators of their concerns that the Federal Trade Commission could become too powerful. The organizations suggested the FTC could acquire too much authority as a result of changes that could be included in reauthorization of the agency, expected sometime early this year.

"While we support the FTC's mission to prevent and punish unfair and deceptive acts or practices, we believe that the current limits on the FTC's discretion are appropriate given the significant consequences of any enforcement action for a targeted company and its shareholders and employees," stated the letter, signed by 29 organizations, including the IAB, Online Publishers Association, American Association of Advertising Agencies, American Advertising Federation, Association of National Advertisers, Direct Marketing Association, and Shop.org.

The missive was sent to the Senate Committee on Commerce, Science and Transportation, which is expected to reauthorize the FTC, possibly in conjunction with financial industry reform legislation. Today's letter follows a series of complaints regarding new FTC authority.

The FTC has long argued that current rulemaking requirements have prevented it from taking actions in a timely manner, and wants the rulemaking process to be more streamlined. Those obstacles could be removed in conjunction with the agency's reauthorization. The commission could also be awarded the ability to slap civil penalties on businesses engaging in alleged deceptive or unfair practices.

Though it is unclear if or how such changes might come about, there are indications that a financial industry reform bill making its way through Congress could grant the FTC the additional authority, as it reauthorizes the agency.

"Taken together, these provisions grant such sweeping powers that the FTC could essentially act as an unelected legislature governing industries and sectors across the economy," stated the coalition's letter.

The groups also lamented a lack of "opportunity for affected industries to appear at a hearing to present their concerns about the potential effect of these provisions on American commerce and our economic future."