Being threatened or investigated by the FTC? Call us here at Revision Legal. We can help. The Federal Trade Commission (“FTC”) is one of the main federal regulators that investigates and brings administrative and legal actions to enforce various federal laws. These include claims involving:
- False and misleading advertising and marketing — including traditional and non-traditional marketing such as internet marketing and use of social media influencers
- False and misleading labeling
- Unfair business practices — an increasing share of FTC enforcement actions
- Deceptive business practices
- Antitrust violations
- Consumer fraud claims
- Cybersecurity and data privacy matters
- Health and effectiveness claims on health products (including supplements)
- Matters related to consumer credit and reporting
Why you need an FTC defense attorney
The FTC can be very aggressive when prosecuting an enforcement action. This is particularly true when persons and companies are unrepresented. Those without an FTC defense attorney can end up being “bullied” by the FTC attorneys being convinced that some violation has occurred and that some large amount of money must be paid. The FTC can assess civil fines and penalties of hundreds of thousands of dollars (or even millions) and impose onerous injunction punishments. For example, a supplement company recently agreed to pay $600,000 to settle an FTC enforcement action. Criminal prosecutions are also possible if the FTC makes a referral to the Department of Justice.
How can an FTC defense lawyer help?
If facing an FTC action, the various goals are to protect your livelihood and your business, prevent undue disruption of your business operations and obtain the best outcome that is possible based on the facts. The help that an FTC defense attorney can provide depends, in part, on how the FTC has started its investigation and how far along the process is. On the one extreme, you will need very aggressive and experienced FTC defense litigators if matters have reached the administrative hearing/trial phase. Revision can provide those services. Even at that stage, settlement negotiations should be ongoing, which might provide an optimal result.
FTC defense lawyers also provide assistance at the early stages of an FTC action. The FTC initiates actions in various ways like sending investigatory letters, making demands for information, seeking interviews, initiating what is called “civil investigative demands” and issuing administrative subpoenas. If you or your company has received anything of this sort, seek legal assistance from an FTC defense attorney quickly. A quick and effective initial response can often prevent larger, more expensive adverse consequences. For example, sometimes the FTC makes mistakes, sometimes the alleged violations are minor and de minimis, sometimes a quick change in policy can “fix” the alleged problem, etc. In any of these situations, an FTC defense attorney can find the problem and work out a quick and cost-effective solution.
FTC defense attorneys can also help proactively. It can save a lot of money and hassle to have an FTC defense attorney provide an FTC compliance evaluation and audit before an FTC enforcement action is received. That will provide peace of mind.
The FTC’s Civil Investigative Demand Process
One of the FTC’s most powerful investigative tools is the Civil Investigative Demand (CID), authorized under 15 U.S.C. § 57b-1. A CID is essentially a pre-litigation subpoena. It can compel a business or individual to produce documentary materials, answer written interrogatories, provide oral testimony, or any combination of the three. Unlike a subpoena, a CID is issued directly by FTC staff and does not require court approval. Recipients have limited grounds to challenge a CID, but those grounds include: the CID was issued for an improper purpose, the information sought is privileged, or compliance would be unduly burdensome. An experienced FTC defense attorney can file a petition to limit or quash a CID on these grounds, buying time and narrowing the scope of the investigation.
Failure to comply with a CID can result in the FTC seeking a court order compelling compliance, and willful non-compliance can lead to contempt proceedings. Equally important, the manner in which a company responds to a CID often shapes how the FTC perceives the company’s level of cooperation and good faith — which directly affects the outcome of any eventual enforcement action. Early retention of FTC defense counsel is critical to managing the CID response strategically.
FTC Section 5 Authority: Unfair and Deceptive Acts and Practices
The FTC’s core enforcement authority derives from Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, which prohibits “unfair or deceptive acts or practices in or affecting commerce.” A deceptive practice involves a material representation, omission, or practice that is likely to mislead consumers acting reasonably under the circumstances. An unfair practice causes or is likely to cause substantial consumer injury that is not reasonably avoidable and is not outweighed by countervailing benefits. These are broad standards, and the FTC has applied them to a wide range of business conduct including subscription cancellation practices, negative option marketing, endorsement disclosures, data security failures, and health product efficacy claims.
Recent FTC enforcement priorities under the agency’s current leadership have expanded into surveillance pricing, algorithmic pricing collusion, junk fee disclosures, and AI-generated content in advertising. Businesses in these sectors should consult FTC defense counsel proactively to assess their exposure under the current enforcement climate.
FTC Consent Decrees: What They Mean in Practice
Most FTC enforcement actions resolve through consent decrees — negotiated settlements where the company agrees to stop the challenged conduct, implement compliance programs, submit to ongoing monitoring, and often pay monetary penalties. Consent decrees typically run for 20 years and impose extensive record-keeping and reporting obligations. Violating the terms of an existing consent decree can result in civil penalties of up to $51,744 per day per violation — penalties far exceeding those that would have been imposed in the original action.
Negotiating favorable consent decree terms is itself a specialized skill. The scope of injunctive relief, the breadth of covered conduct, the compliance reporting schedule, and the identity of the compliance monitor are all negotiable. An FTC defense attorney with prior consent decree negotiation experience can meaningfully reduce both the monetary and operational burden of a settlement.
Individual Liability in FTC Actions
A frequently misunderstood aspect of FTC enforcement is that corporate officers, owners, and managers can face individual personal liability in FTC actions — including personal liability for monetary penalties — where they had direct participation in or control over the deceptive or unfair practices. FTC v. Amy Travel Service, Inc., 875 F.2d 564 (7th Cir. 1989) established that individual liability attaches when a person directly participated in, or had authority to control, the practices at issue. Incorporating a business or operating through an LLC does not insulate individuals from FTC personal liability. This makes early and aggressive defense representation essential for company principals, not just the corporate entity.
Contact the FTC Defense Attorneys st Revision Legal
For more information, contact the experienced FTC Defense Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.
