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114th Congress   }                                  {    Rept. 114-875
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                  {           Part 1

======================================================================



 
            FTC PROCESS AND TRANSPARENCY REFORM ACT OF 2016

                                _______
                                

 December 13, 2016.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 5510]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 5510) to amend the Federal Trade Commission Act 
to establish new requirements relating to investigations, 
consent orders, and reporting requirements, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     6
Background and Need for Legislation..............................     6
Hearings.........................................................    10
Committee Consideration..........................................    11
Committee Votes..................................................    11
Committee Oversight Findings.....................................    17
Statement of General Performance Goals and Objectives............    17
New Budget Authority, Entitlement Authority, and Tax Expenditures    17
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......    17
Committee Cost Estimate..........................................    17
Congressional Budget Office Estimate.............................    17
Federal Mandates Statement.......................................    18
Duplication of Federal Programs..................................    18
Disclosure of Directed Rule Makings..............................    19
Advisory Committee Statement.....................................    19
Applicability to Legislative Branch..............................    19
Section-by-Section Analysis of the Legislation...................    19
Changes in Existing Law Made by the Bill, as Reported............    21
Dissenting Views.................................................    45

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``FTC Process and 
Transparency Reform Act of 2016''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Unlawful act or practice.
Sec. 3. Time limitation for consent orders.
Sec. 4. Annual reporting on the status of investigations.
Sec. 5. Requirement of analysis and rationale for legislative and 
regulatory recommendations.
Sec. 6. Effects of guidelines, general statements of policy, and 
similar guidance.
Sec. 7. Termination of inactive investigations.
Sec. 8. Nonpublic collaborative discussions.
Sec. 9. Annual plan required.

SEC. 2. UNLAWFUL ACT OR PRACTICE.

  Section 5(n) of the Federal Trade Commission Act (15 U.S.C. 45(n)) is 
amended to read as follows:
  ``(n) Unlawful Act or Practice.--
          ``(1) Substantial injury required.--
                  ``(A) In general.--The Commission shall have no 
                authority under this section or section 18 to declare 
                unlawful an act or practice on the grounds that such 
                act or practice is unfair unless the act or practice 
                causes or is likely to cause substantial injury to 
                consumers which is not reasonably avoidable by 
                consumers themselves and not outweighed by 
                countervailing benefits to consumers or to competition.
                  ``(B) Substantial injury to consumers.--For purposes 
                of this subsection, an act or practice does not cause 
                and is not likely to cause substantial injury to 
                consumers if the injury or harm resulting from such act 
                or practice is trivial or merely speculative. An injury 
                may be sufficiently substantial if the injury does a 
                small harm to a large number of people. An act or 
                practice may be likely to cause a substantial injury if 
                the act or practice raises a significant risk of 
                concrete harm.
                  ``(C) Considerations required.--In determining 
                whether an act or practice causes or is likely to cause 
                substantial injury to consumers under this subsection, 
                the Commission shall consider the following:
                          ``(i) Whether the act or practice results in 
                        monetary harm.
                          ``(ii) Whether the act or practice results in 
                        unwarranted health or safety risk.
                          ``(iii) Whether the act or practice results 
                        only in emotional or other more subjective 
                        harm.
          ``(2) Net effects of injury required.--
                  ``(A) Considerations required.--An act or practice is 
                not unfair unless the act or practice is injurious in 
                its net effects. In determining whether an act or 
                practice is injurious in its net effects, the 
                Commission shall consider the following:
                          ``(i) The various costs for a remedy, 
                        including the costs to the parties directly 
                        before the Commission.
                          ``(ii) The burdens on society in general in 
                        the form of increased paperwork, increased 
                        regulatory burdens on the flow of information, 
                        reduced incentives to innovation and capital 
                        formation, and other similar matters.
                  ``(B) Consumer decisions.--The Commission may not 
                second-guess the wisdom of particular consumer 
                decisions, but may consider whether the act or practice 
                unreasonably creates or takes advantage of an obstacle 
                to the free exercise of consumer decisionmaking.
          ``(3) Public policy considerations.--In determining whether 
        an act or practice is unfair, the Commission may consider 
        established public policies as evidence to be considered with 
        all other evidence. Such public policy considerations may not 
        serve as a primary basis for such determination.''.

SEC. 3. TIME LIMITATION FOR CONSENT ORDERS.

  (a) Amendment.--Section 5 of the Federal Trade Commission Act (15 
U.S.C. 45) is amended by adding at the end the following new 
subsections:
  ``(o) Termination Clause Required for Consent Orders.--Any consent 
order entered into by the Commission relating to alleged unfair or 
deceptive acts or practices by the person, partnership, or corporation, 
subject to the consent order shall include a termination clause that 
the consent order shall expire not later than 8 years after the date on 
which the consent order is entered into, unless the consent order 
relates to alleged fraud by the person, partnership, or corporation 
subject to the consent order or requires a time limit longer than 8 
years based on the factors described in this subsection. In determining 
the time limit for any termination clause, the Commission shall 
consider each of the following factors:
          ``(1) The impact of technological progress on the continuing 
        relevance of the consent order.
          ``(2) Whether there is reason to believe that the person, 
        partnership, or corporation would continue to engage in 
        activities that violate this section without the consent order.
  ``(p) Consent Order Review.--Any consent order entered into by the 
Commission that is unrelated to alleged fraud by the person, 
partnership, or corporation subject to the consent order and has a 
termination date more than 5 years after such consent order is entered 
into shall include a clause providing for Commission review of the 
consent order 5 years after the date on which the order is entered 
into. Such clause shall require the Commission to evaluate whether the 
consent order has achieved its initial purposes based on the factors 
described in subsection (o). The clause shall provide that if, based on 
such evaluation, the Commission determines that the consent order has 
achieved its purposes, the Commission shall terminate the consent 
order.
  ``(q) Petition for Review of Existing Consent Orders.--Any person, 
partnership, or corporation that as of the effective date of this 
subsection is subject to a consent order that is unrelated to alleged 
fraud and has been effective for a period of at least five years may 
petition the Commission to terminate such consent order. In evaluating 
a petition to terminate a consent order under this subsection, the 
Commission shall consider whether the consent order has achieved its 
initial purposes based on each of the factors described in subsection 
(o). If, based on such evaluation, the Commission determines that the 
consent order has achieved its purposes, the Commission shall terminate 
the consent order.''.
  (b) Effective Date; Applicability.--The amendment made by subsection 
(a) shall take effect on the date of enactment of this Act and with 
respect to subsections (o) and (p) of section 5 of the Federal Trade 
Commission Act (15 U.S.C. 45), as added by subsection (a), shall apply 
with respect to any consent order entered into after such date.

SEC. 4. ANNUAL REPORTING ON THE STATUS OF INVESTIGATIONS.

  Section 5 of the Federal Trade Commission Act (15 U.S.C. 45), as 
amended by section 3, is further amended by adding at the end the 
following new subsection:
  ``(r) Report on Investigations.--
          ``(1) In general.--The Commission shall, on an annual basis, 
        submit a report to Congress on investigations with respect to 
        unfair or deceptive acts or practices, and with respect to 
        unfair methods of competition, in or affecting commerce (within 
        the meaning of subsection (a)(1)), detailing--
                  ``(A) the number of such investigations the 
                Commission has commenced;
                  ``(B) the number of such investigations the 
                Commission has closed with no official agency action;
                  ``(C) the disposition of such investigations, if such 
                investigations have concluded and resulted in official 
                agency action; and
                  ``(D) for each such investigation that was closed 
                with no official agency action, subject to paragraph 
                (2), a description--
                          ``(i) sufficient to indicate the legal 
                        analysis supporting the Commission's decision 
                        not to continue such investigation; and
                          ``(ii) of the industry sectors of the 
                        persons, partnerships, or corporations who are 
                        subjects of such investigation.
          ``(2) Consent required.--The Commission shall not include in 
        a report required under paragraph (1) the description required 
        under subparagraph (D) of such paragraph unless the Commission 
        has--
                  ``(A) provided to each person, partnership, or 
                corporation who is a subject of the investigation a 
                notification containing the description to be included 
                in the report; and
                  ``(B) obtained the consent of each such person, 
                partnership, or corporation to the inclusion of the 
                description in the report.
          ``(3) Privacy protection.--The description required under 
        paragraph (1)(D) shall not include the identity of any person, 
        partnership, or corporation who is a subject of the 
        investigation or any other information that identifies the 
        person, partnership, or corporation.''.

SEC. 5. REQUIREMENT OF ANALYSIS AND RATIONALE FOR LEGISLATIVE AND 
                    REGULATORY RECOMMENDATIONS.

  The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended by 
inserting after section 6 the following new section:

``SEC. 6A. ECONOMIC ANALYSIS REQUIRED.

  ``(a) In General.--Except as provided in subsection (b), the 
Commission may not publish a recommendation for legislative or 
regulatory action unless--
          ``(1) the Commission publishes any economic analysis or 
        advice prepared by the Bureau of Economics of the Commission 
        relating to such recommendation; or
          ``(2) if no such economic analysis or advice was prepared, 
        the Commission indicates, in writing as part of such 
        recommendation, that no such analysis or advice was given.
  ``(b) Exception.--The requirement in subsection (a) shall not apply 
if--
          ``(1) the recommendation for legislative or regulatory action 
        is made as part of an appearance by a Commissioner before 
        Congress;
          ``(2) the recommendation is made to a State or local 
        government entity;
          ``(3) the recommendation is requested by and submitted to any 
        member or committee of Congress, including the Committee on 
        Energy and Commerce of the House of Representatives;
          ``(4) the recommendation is submitted to another Federal 
        agency in response to a notice of proposed rulemaking, 
        including comments to the Federal Communications Commission; or
          ``(5) the recommendation is submitted to the United Kingdom, 
        the European Union or members thereof, including 
        recommendations to the European Parliament, the European 
        Commission, or any data protection authorities of any member 
        state with regard to cross-border data flows and other privacy 
        and data security matters.''.

SEC. 6. EFFECTS OF GUIDELINES, GENERAL STATEMENTS OF POLICY, AND 
                    SIMILAR GUIDANCE.

  Section 18(a) of the Federal Trade Commission Act (15 U.S.C. 57a(a)) 
is amended by adding at the end the following:
  ``(3)(A) No guidelines, general statements of policy, or similar 
guidance related either to unfair methods of competition or to unfair 
or deceptive acts or practices, in or affecting commerce, issued by the 
Commission shall confer any rights upon any person, State, or locality, 
nor shall operate to bind the Commission or any person, State, or 
locality to the approach recommended in such guidelines, general 
statements of policy, or similar guidance. In any enforcement action, 
the Commission shall prove a violation of a provision of law enforced 
by the Commission. The Commission may not base an enforcement action 
on, or execute a consent order based on, acts or practices that are 
alleged to be inconsistent with any such guidelines, general statements 
of policy, or similar guidance, unless the acts or practices violate a 
provision of law enforced by the Commission.
  ``(B) Compliance with any guidelines, general statement of policy, or 
similar guidance issued by the Commission may be used as evidence of 
compliance with the provision of law under which the guidelines, 
general statement of policy, or guidance was issued.
  ``(C) Nothing in this paragraph shall be construed to confer any 
authority upon or negate any authority of the Commission to issue 
guidelines, general statements of policy, or similar guidance.''.

SEC. 7. TERMINATION OF INACTIVE INVESTIGATIONS.

  Section 20 of the Federal Trade Commission Act (15 U.S.C. 57b-1) is 
amended--
          (1) by redesignating subsection (j) as subsection (k); and
          (2) by inserting after subsection (i) the following new 
        subsection:
  ``(j) Termination of Inactive Investigation.--
          ``(1) In general.--Except as provided in paragraph (2), a 
        covered investigation shall terminate at the expiration of the 
        six-month period beginning on the date on which a covered 
        verifiable written communication is sent by the Commission.
          ``(2) Exception.--Paragraph (1) does not apply if--
                  ``(A) an additional covered verifiable written 
                communication is sent by the Commission during the 
                period described in paragraph (1);
                  ``(B) the Commission votes to extend the covered 
                investigation before the expiration of such period; or
                  ``(C) the Commission determines in a vote, within 30 
                days after the expiration of such period, that the 
                Commission did not send a covered verifiable written 
                communication during such period because of excusable 
                neglect or a circumstance beyond the control of the 
                Commission that rendered notification during such 
                period impossible.
          ``(3) Definitions.--In this subsection:
                  ``(A) Covered investigation.--The term `covered 
                investigation' means an investigation conducted 
                pursuant to this section in which the Commission has 
                notified the person, partnership, or corporation that 
                is the subject of the investigation by verifiable 
                written communication.
                  ``(B) Covered verifiable written communication.--The 
                term `covered verifiable written communication' means a 
                verifiable written communication relating to an 
                investigation conducted pursuant to this section that 
                is sent to the person, partnership, or corporation that 
                is the subject of the investigation.''.

SEC. 8. NONPUBLIC COLLABORATIVE DISCUSSIONS.

  The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended by 
inserting after section 26 the following:

``SEC. 27. NONPUBLIC COLLABORATIVE DISCUSSIONS.

  ``(a) In General.--Notwithstanding section 552b of title 5, United 
States Code, a bipartisan majority of Commissioners may hold a meeting 
that is closed to the public to discuss official business if--
          ``(1) a vote or any other agency action is not taken at such 
        meeting;
          ``(2) each person present at such meeting is a Commissioner 
        or an employee of the Commission; and
          ``(3) an attorney from the Office of General Counsel of the 
        Commission is present at such meeting.
  ``(b) Disclosure of Nonpublic Collaborative Discussions.--Not later 
than 2 business days after the conclusion of a meeting held under 
subsection (a), the Commission shall publish on its Internet website a 
disclosure of such meeting, including--
          ``(1) a list of the persons who attended such meeting; and
          ``(2) a summary of the matters discussed at such meeting, 
        except for such matters as the Commission determines may be 
        withheld under section 552b(c) of title 5, United States Code.
  ``(c) Preservation of Open Meetings Requirements for Agency Action.--
Nothing in this section shall alter or supersede section 552b of title 
5, United States Code, with respect to any meeting of Commissioners 
other than a meeting held under subsection (a).
  ``(d) Definitions.--In this section:
          ``(1) Agency action.--The term `agency action' has the 
        meaning given such term in section 551 of title 5, United 
        States Code.
          ``(2) Bipartisan majority.--The term `bipartisan majority' 
        means, when used with respect to a group of Commissioners, that 
        such group--
                  ``(A) is a group of two or more Commissioners; and
                  ``(B) includes, for each political party of which any 
                Commissioner is a member, at least 1 Commissioner who 
                is a member of such political party, and, if any 
                Commissioner has no political party affiliation, at 
                least 1 unaffiliated Commissioner.''.

SEC. 9. ANNUAL PLAN REQUIRED.

  (a) Amendments.--The Federal Trade Commission Act (15 U.S.C. 41 et 
seq.), as amended by section 8, is further amended--
          (1) by redesignating section 28 as section 30; and
          (2) by inserting after section 27 the following new sections:

``SEC. 28. ANNUAL PLAN REQUIRED.

  ``Not later than December 1 of each year, the Commission shall 
publish and submit to the Committees on the Judiciary and Commerce, 
Science, and Transportation of the Senate and the Committees on the 
Judiciary and Energy and Commerce of the House of Representatives a 
plan for the next calendar year describing the projected activities of 
the Commission, including each of the following:
          ``(1) The policy priorities of the Commission.
          ``(2) Any rulemakings projected to be commenced.
          ``(3) Any plans to develop guidelines or other non-regulatory 
        guidance documents.
          ``(4) Any plans to restructure the Commission or establish or 
        alter working groups.
          ``(5) Any planned projects or initiatives of the Commission, 
        including workshops, conferences, and reports.
          ``(6) With respect to any activities of the Commission, 
        including workshops, conferences, reports, working groups, 
        guidance documents, or rulemakings, that relate specifically to 
        combating unfair or deceptive acts or practices that target or 
        significantly affect individuals who are 65 years of age or 
        older, a description of how such activities will address such 
        acts or practices.
          ``(7) Projected dates and timelines associated with any of 
        the required disclosures in this section.

``SEC. 29. REPORT ON ELDER FRAUD REQUIRED.

  ``Not later than January 31 of each year, the Commission shall 
publish and submit to the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Energy and Commerce 
of the House of Representatives a report on the Commission's 
enforcement actions to address unfair or deceptive acts or practices 
that may have targeted or significantly affected individuals who are 65 
years of age or older during the previous calendar year, including each 
of the following:
          ``(1) A brief description of each such enforcement action.
          ``(2) The disposition of such enforcement actions, broken 
        down by category.
          ``(3) The proportion of such enforcement actions as a 
        percentage of all enforcement actions relating to unfair or 
        deceptive acts or practices in or affecting commerce brought by 
        the Commission.''.
  (b) Rule of Construction.--Nothing in the amendments made by 
subsection (a) shall be construed to limit or restrict the Federal 
Trade Commission's activities or disclosure of information to the 
public, consistent with applicable law.
  (c) Effective Date; Applicability.--The amendments made by subsection 
(a) shall take effect on the date of enactment of this Act and shall 
apply with respect to the first December 1 and January 31, as 
applicable, occurring after such effective date.

                          Purpose and Summary

    The purposes of H.R. 5510 are to clarify companies' 
liability under Section 5 of the Federal Trade Commission (FTC 
or Commission) Act; to require the FTC to disclose its economic 
analyses for certain policy recommendations; to require the FTC 
to close certain inactive investigations; to shorten certain 
consent orders; to allow a bipartisan majority of Commissioners 
to hold private meetings in certain circumstances; to require 
the FTC to report annually on its activities; and to clarify 
that FTC guidelines are not an independent basis for liability.

                  Background and Need for Legislation

    The FTC enforces a broad statute that empowers the 
Commission to declare unlawful ``unfair or deceptive acts or 
practices in or affecting commerce . . . .''\1\ The breadth of 
this statutory prohibition enables the Commission to take a 
flexible approach to consumer protection in a wide set of U.S. 
markets. The FTC has general rulemaking authority under the FTC 
Act, but its rulemaking process requirements differ from those 
imposed on most other independent agencies.\2\
---------------------------------------------------------------------------
    \1\15 U.S.C. Sec. 45(a)(1).
    \2\15 U.S.C. Sec. 57a; but cf. 5 U.S.C. Sec. 553.
---------------------------------------------------------------------------
    Much of the Commission's attention is directed to newer and 
evolving technologies. For example, over the past sixteen years 
or so, the Commission has exerted its consumer protection 
authority to prevent unfair or deceptive electronic data 
security practices.\3\ The FTC is also active in protecting 
consumers' privacy online through guidance for businesses, 
conferences, and enforcement actions.\4\ The FTC settles most 
of its consumer protection cases,\5\ and has settled almost all 
of its data security cases.\6\ Due to the evolving nature and 
properties of electronic data, shifting consumer expectations, 
mutable contextual considerations, and continuously improving 
available security measures, the elements necessary for a data 
security or privacy program the FTC considers adequate will 
change over time.\7\ These changing factors, coupled with the 
fact that settling out of court leads to so few judicial 
decisions,\8\ creates some uncertainty--especially in sectors 
heavily reliant on evolving technologies--as to the types of 
activity that are illegal under Section 5 of the FTC Act.
---------------------------------------------------------------------------
    \3\See Fed. Trade Comm'n, Cases Tagged with Data Security https://
www.ftc.gov/enforcement/cases-proceedings/terms/249 (last visited Aug. 
1, 2016).
    \4\See, e.g., Fed. Trade Comm'n, Privacy and Security, https://
www.ftc.gov/tips-advice/business-center/privacy-and-security (last 
visited Aug. 1, 2016).
    \5\Fed. Trade Comm'n, Cases and Proceedings, https://www.ftc.gov/
enforcement/cases-proceedings (last visited Aug. 1, 2016).
    \6\Out of approximately data security cases listed on the FTC's 
website, the only two defendants that have not settled are LabMD, Inc. 
and Wyndham Worldwide Corporation (see id.).
    \7\See Daniel Solove & Woodrow Hartzog, The FTC and the New Common 
Law of Privacy, 114 Colum. L. Rev. 583, 608 (2014) (arguing that FTC 
enforcement ``has certainly changed over the course of the past fifteen 
years. . . .'').
    \8\Solove & Hartzog, 114 Colum. L. Rev. at 606 (``In nearly all of 
the FTC's Section 5 cases and complaints . . . the final disposition of 
the matter is a settlement, default judgment, or abandonment of the 
action by the FTC in the investigatory stage. The result is that there 
are hardly any judicial decisions in this area.'').
---------------------------------------------------------------------------
    Section 2 of H.R. 5510 builds on Section 5(n) of the FTC 
Act as codified at 15 U.S.C. Sec. 45(n). This section provides, 
in part, that the Commission shall have ``no authority . . . to 
declare unlawful an act or practice on the grounds that such 
act or practice is unfair unless the act or practice causes or 
is likely to cause substantial injury to consumers which is not 
reasonably avoidable by consumers themselves and not outweighed 
by countervailing benefits to consumers or to competition.''\9\ 
This provision was adapted from a portion of the FTC's 
unfairness policy statement: ``To justify a finding of 
unfairness the injury must satisfy three tests. It must be 
substantial; it must not be outweighed by any countervailing 
benefits to consumers or competition that the practice 
produces; and it must be an injury that consumers themselves 
could not reasonably have avoided.''\10\ The provision 
originated in the Senate and became part of the FTC 
reauthorization conference report, signed into law in 1994.\11\ 
As Senator Slade Gorton explained during the Senate?s 
consideration of the conference report, ``the conferees were 
able to reach a compromise by removing the absolute ban [on 
advertising rulemaking] while retaining the definition of 
unfairness that the FTC has been using since it promulgated a 
policy statement on unfairness in 1980.''\12\ Similarly, the 
purpose of Section 2 of H.R. 5510 is not to redefine or curtail 
the FTC's unfairness authority. Rather, its purpose is to 
retain the definition of unfairness that the FTC has been using 
since 1980 and prevent the FTC from adopting any significant 
reinterpretations of its unfairness authority.
---------------------------------------------------------------------------
    \9\15 U.S.C. Sec. 45(n).
    \10\Fed. Trade Comm'n, FTC Policy Statement on Unfairness, https://
www.ftc.gov/public-statements/1980/12/ftc-policy-statement-unfairness 
(last visited Aug. 19, 2016) [Unfairness Statement].
    \11\H.R. Rep. No. 103-617, at 12 (1994) (Conf. Rep.); Federal Trade 
Commission Act amendments of 1994, Pub. L. No. 103-312 (1994).
    \12\140 Cong. Rec. S11316 (daily ed. Aug. 11, 1994) (statement of 
Sen. Gorton).
---------------------------------------------------------------------------
    Section 2 would codify certain sections of the Commission's 
Policy Statement on Unfairness.\13\ Under Section 2, the 
Commission may meet its burden to show that an act or practice 
is ``likely'' to cause substantial harm--as is required under 
current law--if it shows that the act or practice ``raises a 
significant risk of concrete harm.'' In determining whether an 
act or practice is likely to cause substantial harm, Section 2 
would also require the Commission to consider at least three 
factors. These factors are not exclusive, and the Commission 
would be free to consider additional factors it deems relevant 
or necessary. In determining whether the benefits are 
outweighed by the harm of an act or practice--as required under 
current law--the Commission would be required to consider two 
factors. These factors are not exclusive and the Commission 
would be free to consider any additional factors it considers 
relevant or necessary. Finally, Section 2 prohibits the 
Commission from second-guessing the ``wisdom of consumer 
decisions,'' providing that the Commission may consider whether 
the act or practice ``unreasonably creates or takes advantage 
of'' obstacles to the free exercise of free consumer decision-
making. For example, a company's decision to charge more for an 
allegedly inferior product is not by itself an unfair practice, 
unless the company creates a circumstance that prevents or 
impedes a consumer from knowing the relative quality or cost of 
the product compared to others.
---------------------------------------------------------------------------
    \13\Unfairness Statement, supra note 10.
---------------------------------------------------------------------------
    In 1995, the FTC adopted a policy statement indicating that 
consent orders entered into under its consumer protection and 
competition authorities would automatically sunset after twenty 
years.\14\ Since then, the Committee is unaware of a consumer 
protection consent order with a sunset date of less than twenty 
years after its inception, although some orders have included 
requirements running for less than the 20-year period of the 
underlying order.\15\ Given the Commission's focus on markets 
driven by advanced technology, the Committee believes that the 
Commission should reconsider whether a twenty-year term is the 
only appropriate timeframe for each and every consent order.
---------------------------------------------------------------------------
    \14\Fed. Trade Comm'n, Policy Statement Regarding Duration of 
Competition and Consumer Protection Orders, 60 Fed. Reg. 42569 (Aug. 
15, 1995), available at https://www.ftc.gov/sites/default/files/
attachments/merger-review/950816durationofcompetitionandconsumer.pdf.
    \15\See Legislative Hearing on 17 FTC Bills Before the Subcomm. on 
Commerce, Manufacturing, and Trade of the H. Comm. on Energy and 
Commerce, 114th Cong. 14, n.30 (2016) (statement of Hon. Edith Ramirez, 
Chairwoman, Fed. Trade Comm'n) (describing two consent orders with Dave 
& Buster's and Twitter, in which the requirement for biannual data 
security assessments in both cases expired after 10 years).
---------------------------------------------------------------------------
    Section 3 of H.R. 5510 would require the Commission to make 
a case-by-case determination as to how long certain consent 
orders should run, imposing a default term of eight years on 
consumer protection consent orders that are unrelated to 
alleged fraud. A company signing a consent order may be likely 
to continue the illegal behavior at issue in the complaint or 
similar misconduct even after twenty years. Under Section 3, 
the Commission may choose to impose a consent order that is 
longer than eight years if there is reason to believe the 
respondent is likely to continue engaging in illegal behavior 
without the order. The Committee believes this flexibility is 
necessary, but acknowledges that the Commission's preferred 
avenue for stopping willful violations, including fraud, is to 
seek injunctions and other equitable relief through Section 
13(b) of the FTC Act.\16\ Section 3 also allows respondents to 
petition for the Commission to sunset an order after five years 
and requires the Commission to sunset the order if it 
determines that the order's purposes have been achieved. This 
section differs from the provision in Section 5 of the existing 
FTC Act, which only requires the Commission to consider such 
petitions and render a decision within 120 days.\17\
---------------------------------------------------------------------------
    \16\J. Howard Beales III and Timothy J. Muris, FTC Consumer 
Protection at 100: 1970s Redux or Protecting Markets to Protect 
Consumers? 83 Geo. Wash. L. Rev. 2157, 2161 (Jan. 2016) (``Relying on 
section 13(b) of the FTC Act, and working with other federal and state 
agencies, and more recently agencies in other countries, the Commission 
has brought hundreds of cases, stopping myriad frauds, returning large 
sums of money to consumers, and helping sister enforcers jail the worst 
offenders.'').
    \17\15 U.S.C. Sec. 45(b) (``The Commission shall determine whether 
to alter, modify, or set aside any order of the Commission in response 
to a request made by a person, partnership, or corporation under 
paragraph(2) not later than 120 days after the date of the filing of 
such request.'').
---------------------------------------------------------------------------
    Although the FTC's consumer protection cases have mostly 
avoided judicial decisions on the merits, the Commission 
provides guidance for various industries and covering certain 
types of cases. The Commission also publishes consent orders 
and complaints, which provide companies some insights into acts 
and practices that may fail to meet the FTC's expectations. 
However, these guideposts do not always provide examples of 
behavior that does meet the Commission's expectations. Nor do 
they offer examples where a court would or has sided with a 
defendant, which published judicial decisions would provide. 
Section 4 of the legislation would require the FTC to describe 
why an investigation target's activities do not run afoul of 
the FTC Act. Similar to closing letters, which the Commission 
occasionally publishes, these descriptions should give entities 
that were not subject to an investigation some helpful examples 
showing behavior that will not draw enforcement action. 
Additionally, they would allow Congress to conduct better 
oversight.
    Section 5 of H.R. 5510 would require the Commission to 
publish advice or analyses by its economists only to the extent 
such advice or analysis is, in fact, provided to staff 
responsible for drafting FTC recommendations. If the Bureau of 
Economics does not provide any advice associated with a policy 
recommendation to be published by the Commission, the FTC would 
simply be required to indicate that no such advice or analysis 
was performed. The FTC would not need to provide either of 
these disclosures if any of the five circumstances listed in 
the section apply.
    The FTC has indicated that its economists play an integral 
role in FTC activities.\18\ However, especially where the FTC 
provides unsolicited advice to Congress, economic analysis 
showing how costs are outweighed by the benefits of proposed 
legislation would help Congress independently evaluate the 
proposal. For example, it is unclear how or whether the 
Commission's own economic analysis supports its conclusion that 
Congress should enact baseline privacy legislation.\19\
---------------------------------------------------------------------------
    \18\See Legislative Hearing on 17 FTC Bills Before the Subcomm. on 
Commerce, Manufacturing, and Trade of the H. Comm. on Energy and 
Commerce, 114th Cong. 21 (2016) (statement of Hon. Edith Ramirez, 
Chairwoman, Fed. Trade Comm'n) (``[Bureau of Economics] is involved in 
almost everything the Commission does, providing Commission and staff 
with thorough, objective, and independent analyses.'').
    \19\See Fed. Trade Comm'n, Protecting Consumer Privacy in an Era of 
Rapid Change: Recommendations for Businesses and Policymakers 72 (March 
2012) (``The FTC recommends that Congress consider baseline privacy 
legislation while industry implements the final privacy framework 
through individual company initiatives and through strong and 
enforceable self-regulatory initiatives.''); Fed. Trade Comm'n, 
Internet of Things: Privacy & Security in a Connected World 50 (Jan. 
2015) (``Commission staff thus again recommends that Congress consider 
enacting broad-based .  .  . privacy legislation.'').
---------------------------------------------------------------------------
    Section 6 of H.R. 5510 would clarify that guidelines issued 
by the Commission do not create independent sources of 
liability. The section parallels language found in various 
sections of the Code of Federal Regulations clarifying the 
effect of guidance. For example, the FTC has clarified that 
guidance issued by the Commission regarding the marketing of 
jewelry, precious metals, and pewter do not ``bind the FTC or 
the public'' and that in any enforcement action, the Commission 
must ``prove that the challenged act or practice is unfair or 
deceptive in violation of Section 5 of the FTC Act.''\20\ These 
provisions apply to various types of guidance and many differ 
slightly. Section 6 of H.R. 5510 would clarify that any 
guidance issued by the Commission would have the same legal 
effect.
---------------------------------------------------------------------------
    \20\16 C.F.R. Part 23.0(d); see also 16 C.F.R. parts 1.5, 239.1, 
240.1, 254.0(b), 260.1(a).
---------------------------------------------------------------------------
    Section 7 of H.R. 5510 would require the Commission to 
close any investigation of which the target is aware, if the 
investigation is allowed to go ``inactive.'' Specifically, if 
the Commission has not communicated with an investigated entity 
within six months after making initial contact with the entity, 
the Commission would be required to terminate that 
investigation. There are two exceptions to the termination 
provision in this section. If no communication was made due to 
excusable neglect or if no communication was made due to 
circumstances that made sending such a communication 
impossible, the Commission would be allowed to vote to keep the 
investigation open up to 30 days after the expiration of the 
six-month period.
    Section 8 of H.R. 5510 would allow a bipartisan majority 
comprised of a group of two or more Commissioners to hold a 
meeting that is closed to the public to discuss official 
business, subject to certain constraints. The purpose of this 
section is to enable collaboration and productive discussion 
among Commissioners without impeding public accountability.
    Section 9 of H.R. 5510 would require the Commission to 
publish two separate reports. On December 1 of every year, the 
Commission would be required to report its planned activities 
and policy priorities in the following year. Similarly, on 
January 31 of every year, the Commission would be required to 
report on its activities undertaken the previous year related 
to unfair or deceptive acts or practices that target persons 65 
years of age or older. The purpose of this section is to assist 
in public accountability and Congressional oversight efforts, 
as well as to provide a better understanding of how the 
Commission is approaching unfair or deceptive acts or practices 
aimed at seniors.

                                Hearings

    The Subcommittee on Commerce, Manufacturing, and Trade held 
a hearing on H.R. 5104, along with several other bills, on May 
24, 2016. The Subcommittee received testimony from:
           Edith Ramirez, Chairwoman, Federal Trade 
        Commission;
           Joshua D. Wright, University Professor, 
        Antonin Scalia Law School at George Mason University;
           Geoffrey Manne, Founder and Executive 
        Director, International Center for Law and Economics;
           Daniel Castro, Vice President, Information 
        Technology and Innovation Foundation;
           Abigail Slater, General Counsel, Internet 
        Association;
           Michael Best, Senior Policy Advocate, 
        Consumer Federation of America;
           David Vladeck, Professor of Law, Georgetown 
        Law;
           Richard Hendrickson, President and CEO, 
        Lifetime Products;
           Greg O'Shanick, President and Medical 
        Director, Center for Neurorehabilitation Services;
           Stephen Shur, President, Travel Technology 
        Association;
           Robert Arrington, President, National 
        Funeral Directors Association;
           John Breyault, Vice President of Public 
        Policy, Telecommunications and Fraud, National 
        Consumers League;
           Gil Genn, Maryland Sports and Entertainment 
        Industry Coalition; and
           Jamie Pena, Vice President, Revenue Strategy 
        and Global Distribution, Omni Hotels and Resorts.

                        Committee Consideration

    On June 8 and 9, 2016, the Subcommittee on Commerce, 
Manufacturing, and Trade met in open markup session and 
forwarded a Committee Print entitled ``FTC Process and 
Transparency Reform Act of 2016,'' as amended, to the full 
Committee by a record vote of 12 yeas and 8 nays. On July 12, 
13, and 14, 2016, the full Committee on Energy and Commerce met 
in open markup session and ordered H.R. 5510, as amended, 
favorably reported to the House by a record vote of 30 yeas and 
20 nays.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
following reflects the record votes taken during the Committee 
consideration:


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held hearings and made 
findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    The goal of H.R. 5510 is to provide the public with more 
transparency as to the FTC's economic analyses; to require 
inactive FTC investigations to be closed; to shorten certain 
FTC consent orders; to clarify the requirements of FTC 
unfairness analyses; and to provide the public with a better 
understanding of how the FTC determines whether certain conduct 
is illegal under Section 5 of the FTC Act.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
5510 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 5510 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 9, 2016.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5510, the FTC 
Process and Transparency Reform Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 5510--FTC Process and Transparency Reform Act of 2016

    H.R. 5510 would make several changes to how the Federal 
Trade Commission (FTC) conducts its investigations and issues 
new rules and would increase the agency's annual reporting 
requirements. Specifically, the bill would codify the 
definition of ``substantial injury'' used to determine which 
acts or practices the agency can declare unlawful, require the 
agency to consider the costs of regulation weighed against the 
injury caused by the act or practice when making such a 
determination, and expand the type of information defendants 
can use as evidence in cases brought by the FTC. H.R. 5510 also 
would require the FTC, when providing recommendations of 
proposed regulations, to publish its economic analysis of such 
regulations unless certain criteria are met. Lastly, the bill 
would require the FTC to publish an annual plan describing its 
anticipated activities for the year and an annual report on the 
status of its enforcement actions pertaining to elder fraud.
    On the basis of information from the FTC, CBO estimates 
that implementing H.R. 5510 would increase the agency's 
administrative costs by less than $500,000 annually. That 
increase in spending by the FTC, which would be subject to the 
availability of appropriated funds, would support two or three 
additional staff that CBO expects would be needed to comply 
with new annual reporting requirements.
    A portion of the amount that the FTC collects in civil 
monetary penalties is remitted to the Treasury and is recorded 
as revenues. By changing procedures for how the FTC initiates 
and litigates violations of its rules, CBO expects that 
enacting H.R. 5510 could decrease those revenues; therefore, 
pay-as-you-go procedures apply. However, CBO estimates that any 
such decrease would be insignificant because of the small 
number of cases that CBO estimates would be affected by the 
changes. Enacting the bill would not affect direct spending.
    CBO estimates that enacting H.R. 5510 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    H.R. 5510 contains no intergovernmental or private-sector 
mandates as defined in Unfunded Mandates Reform Act and would 
not affect the budgets of state, local, or tribal governments.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was approved by Theresa Gullo, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    Duplication of Federal Programs

    No provision of H.R. 5510 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting H.R. 5510 
specifically directs to be completed no within the meaning of 5 
U.S.C. 551.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    Section 1 provides that the Act may be cited as the ``FTC 
Process and Transparency Reform Act of 2016.''

Section 2. Unlawful act or practice

    This section states that an act or practice does not cause 
substantial injury to consumers if the injury or harm resulting 
from such act or practice is trivial or merely speculative. An 
injury may be sufficiently substantial if the injury does a 
small harm to a large number of people, and may be likely to 
cause substantial injury if it raises a significant risk of 
concrete harm.
    This section requires that an act or practice is not unfair 
unless it is injurious in its net effects. To make this 
determination, the Commission shall consider the various costs 
for a remedy, the burdens on society in general in the form of 
increased paperwork, increased regulatory burdens on the flow 
of information, reduced incentives to innovation and capital 
formation, and other similar matters. The Commission may not 
second-guess the wisdom of particular consumer decisions, but 
may consider whether there is an obstacle to the free exercise 
of consumer decision making.

Section 3. Time limitation for consent orders

    This section requires any consent order entered into by the 
Commission related to unfair or deceptive acts or practices to 
include a termination clause that such consent order expire not 
later than eight years after it is entered into, unless the 
consent order relates to alleged fraud or the Commission 
determines that the order should last longer based on 
consideration of the impact on technological progress and risk 
of future violations of the order.
    This section requires a review of any consent order five 
years after the date on which the order is entered into unless 
the consent order is related to alleged fraud outlined in this 
section, and allows entities to request such a review. If the 
consent order has not achieved its stated purposes, the 
Commission shall terminate the consent order.

Section 4. Annual reporting on the status of investigations

    This section requires the Commission to submit an annual 
report to Congress on investigations relating to unfair or 
deceptive acts or practices, or unfair methods of competition, 
in or affecting commerce, including information on the number 
of investigations commenced, the number of investigations 
closed with no official agency action, the disposition of such 
closed investigations, and a description of such closed 
investigations sufficient to indicate the legal analysis 
supporting the Commission's decision to close the investigation 
with privacy limitations for the entities investigated. If the 
subjects of the investigations required to be described under 
this section do not consent to their publication, the 
Commission may not publish the descriptions that are otherwise 
required in the section.

Section 5. Requirement of analysis and rationale for legislative and 
        regulatory recommendations

    This section prohibits the FTC from submitting 
recommendations for legislative or regulatory action without an 
economic analysis or advice prepared by the Bureau of 
Economics. If no such economic analysis or advice is prepared, 
the FTC must indicate that no advice or economic analysis was 
prepared by the Bureau of Economics for the recommendations. 
These requirements do not apply if (1) the recommendation is 
made as part of an appearance by a FTC Commissioner before 
Congress; (2) the recommendation is made to a state or local 
government entity; (3) the recommendation is requested by and 
submitted to a member or committee of Congress; (4) the 
recommendation is submitted to another Federal agency in 
response to a notice of proposed rulemaking; or (5) the 
recommendation is submitted to the United Kington, the European 
Union or members thereof, or data protection authorities of any 
member state with regard to cross-border data flows.

Section 6. Effects of guidelines, general statements of policy, and 
        similar guidance

    This section clarifies that in any enforcement action, the 
Commission shall prove a violation of a provision of law 
enforced by the Commission. The Commission may not base an 
enforcement action on, or execute a consent order based on acts 
or practices that are alleged to be inconsistent with any 
guidelines, general statements of policy, or similar guidance 
issued by the Commission unless the acts or practices violate a 
provision of law enforced by the Commission. Such guidelines, 
general statements of policy, or similar guidance may be used 
as evidence of compliance with the provision under which they 
were issued. Nothing in this section confers authority upon or 
negates existing authority of the Commission to issue such 
materials.

Section 7. Termination of inactive investigations

    This section requires the Commission to terminate a covered 
investigation at the end of a six-month period beginning on the 
date that a covered verifiable written communication is sent by 
the Commission, unless the Commission sends additional covered 
verifiable written communications or the Commission votes to 
extend the covered investigation. The requirement does not 
apply if the Commission, within thirty days of the expiration 
of the six-month period, determines that it did not send a 
verifiable written communication because of either excusable 
neglect or a circumstance beyond the control of the Commission 
making sending the communication impossible.

Section 8. Nonpublic collaborative discussions

    This section authorizes a bipartisan majority of FTC 
Commissioners to hold a non-public meeting as long as no votes 
or agency actions are taken at the meeting, each person present 
at the meeting is a Commissioner or employee of the Commission, 
and an attorney from the Office of General Counsel of the 
Commission is present at the meeting. This section also 
requires that the Commission publish a disclosure of the 
meeting on its Internet website within two business days of the 
meeting that includes a list of meeting attendees and a summary 
of the matters discussed at the meeting, except for matters 
that the Commission has determined are not in the public 
interest to disclose. This section includes a provision 
preserving open meeting requirements for agency action. This 
section also includes definitions for terms used in the 
section.

Section 9. Annual plan required

    This section requires the FTC to publish and submit to 
Congress on December 1 of each year, an annual plan for the 
next calendar year describing the projected activities of the 
Commission. The annual plan must include a description of the 
Commission's policy priorities, projected rulemakings, plans to 
develop guidelines, plans to restructure the Commission or 
establish or alter working groups, planned projects or 
initiatives, and any projected dates and timelines associated 
with those initiatives.
    This section also requires the FTC to publish and submit to 
Congress an annual report on the Commission's enforcement 
actions involving alleged unfair or deceptive acts or practices 
targeting or significantly affecting persons who are 65 years 
of age or older. The report is required to include a 
description of the Commission's enforcement actions, the 
disposition of those enforcement actions, and the proportion of 
enforcement actions involving elder fraud as a percentage of 
all enforcement action relating to unfair or deceptive acts or 
practices. The report must also include workshops, guidance 
documents, working groups, and conferences related to unfair or 
deceptive acts or practices that target or significantly affect 
individuals who are 65 years of age or older.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

FEDERAL TRADE COMMISSION ACT

           *       *       *       *       *       *       *


  Sec. 5. (a)(1) Unfair methods of competition in or affecting 
commerce, and unfair or deceptive acts or practices in or 
affecting commerce, are hereby declared unlawful.
  (2) The Commission is hereby empowered and directed to 
prevent persons, partnerships, or corporations, except banks, 
savings and loan institutions described in section 18(f)(3), 
Federal credit unions described in section 18(f)(4), common 
carriers subject to the Acts to regulate commerce, air carriers 
and foreign air carriers subject to the Federal Aviation Act of 
1958, and persons, partnerships, or corporations insofar as 
they are subject to the Packers and Stockyards Act, 1921, as 
amended, except as provided in section 406(b) of said Act, from 
using unfair methods of competition in or affecting commerce 
and unfair or deceptive acts or practices in or affecting 
commerce.
  (3) This subsection shall not apply to unfair methods of 
competition involving commerce with foreign nations (other than 
import commerce) unless--
          (A) such methods of competition have a direct, 
        substantial, and reasonably foreseeable effect--
                  (i) on commerce which is not commerce with 
                foreign nations, or on import commerce with 
                foreign nations; or
                  (ii) on export commerce with foreign nations, 
                of a person engaged in such commerce in the 
                United States; and
          (B) such effect gives rise to a claim under the 
        provisions of this subsection, other than this 
        paragraph.
If this subsection applies to such methods of competition only 
because of the operation of subparagraph (A)(ii), this 
subsection shall apply to such conduct only for injury to 
export business in the United States.
          (4)(A) For purposes of subsection (a), the term 
        ``unfair or deceptive acts or practices'' includes such 
        acts or practices involving foreign commerce that--
                  (i) cause or are likely to cause reasonably 
                foreseeable injury within the United States; or
                  (ii) involve material conduct occurring 
                within the United States.
          (B) All remedies available to the Commission with 
        respect to unfair and deceptive acts or practices shall 
        be available for acts and practices described in this 
        paragraph, including restitution to domestic or foreign 
        victims.
  (b) Whenever the Commission shall have reason to believe that 
any such person, partnership, or corporation has been or is 
using any unfair method of competition or unfair or deceptive 
act or practice in or affecting commerce, and if it shall 
appear to the Commission that a proceeding by it in respect 
thereof would be to the interest of the public, it shall issue 
and serve upon such person, partnership, or corporation a 
complaint stating its charges in that respect and containing a 
notice of a hearing upon a day and at a place therein fixed at 
least thirty days after the service of said complaint. The 
person, partnership, or corporation so complained of shall have 
the right to appear at the place and time so fixed and show 
cause why an order should not be entered by the Commission 
requiring such person, partnership, or corporation to cease and 
desist from the violation of the law so charged in said 
complaint. Any person, partnership, or corporation may make 
application, and upon good cause shown may be allowed by the 
Commission to intervene and appear in said proceeding by 
counsel or in person. The testimony in any such proceeding 
shall be reduced to writing and filed in the office of the 
Commission. If upon such hearing the Commission shall be of the 
opinion that the method of competition or the act or practice 
in question is prohibited by this Act, it shall make a report 
in writing in which it shall state its findings as to the facts 
and shall issue and cause to be served on such person, 
partnership, or corporation an order requiring such person, 
partnership, or corporation to cease and desist from using such 
method of competition or such act or practice. Until the 
expiration of the time allowed for filing a petition for 
review, if no such petition has been duly filed within such 
time, or, if a petition for review has been filed within such 
time then until the record in the proceeding has been filed in 
a court of appeals of the United States, as hereinafter 
provided, the Commission may at any time, upon such notice and 
in such manner as it shall deem proper, modify or set aside, in 
whole or in part, any report or any order made or issued by it 
under this section. After the expiration of the time allowed 
for filing a petition for review, if no such petition has been 
duly filed within such time, the Commission may at any time, 
after notice and opportunity for hearing, reopen and alter, 
modify, or set aside, in whole or in part, any report or order 
made or issued by it under this section, whenever in the 
opinion of the Commission conditions of fact or of law have so 
changed as to require such action or if the public interest 
shall so require, except that (1) the said person, partnership, 
or corporation may, within sixty days after service upon him or 
it of said report or order entered after such a reopening, 
obtain a review thereof in the appropriate circuit court of 
appeals of the United States, in the manner provided in 
subsection (c) of this section; and (2) in the case of an 
order, the Commission shall reopen any such order to consider 
whether such order (including any affirmative relief provision 
contained in such order) should be altered, modified, or set 
aside, in whole or in part, if the person, partnership, or 
corporation involved files a request with the Commission which 
makes a satisfactory showing that changed conditions of law or 
fact require such order to be altered, modified, or set aside, 
in whole or in part. The Commission shall determine whether to 
alter, modify, or set aside any order of the Commission in 
response to a request made by a person, partnership, or 
corporation under paragraph (2) not later than 120 days after 
the date of the filing of such request.
  (c) Any person, partnership, or corporation required by an 
order of the Commission to cease and desist from using any 
method of competition or act or practice may obtain a review of 
such order in the circuit court of appeals of the United 
States, within any circuit where the method of competition or 
the act or practice in question was used or where such person, 
partnership, or corporation resides or carries on business, by 
filing in the court, within sixty days from the date of the 
service of such order, a written petition praying that the 
order of the Commission be set aside. A copy of such petition 
shall be forthwith transmitted by the clerk of the court to the 
Commission, and thereupon the Commission shall file in the 
court the record in the proceeding, as provided in section 2112 
of title 28, United States Code. Upon such filing of the 
petition the court shall have jurisdiction of the proceeding 
and of the question determined therein concurrently with the 
Commission until the filing of the record and shall have power 
to make and enter a decree affirming, modifying, or setting 
aside the order of the Commission, and enforcing the same to 
the extent that such order is affirmed and to issue such writs 
as are ancillary to its jurisdiction or are necessary in its 
judgment to prevent injury to the public or to competitors 
pendente lite. The findings of the Commission as to the facts, 
if supported by evidence, shall be conclusive. To the extent 
that the order of the Commission is affirmed, the court shall 
thereupon issue its own order commanding obedience to the terms 
of such order of the Commission. If either party shall apply to 
the court for leave to adduce additional evidence, and shall 
show to the satisfaction of the court that such additional 
evidence is material and that there were reasonable grounds for 
the failure to adduce such evidence in the proceeding before 
the Commission, the court may order such additional evidence to 
be taken before the Commission and to be adduced upon the 
hearing in such manner and upon such terms and conditions as to 
the court may seem proper. The Commission may modify its 
findings as to the facts, or make new findings, by reason of 
the additional evidence so taken, and it shall file such 
modified or new findings, which if supported by evidence, shall 
be conclusive, and its recommendation, if any, for the 
modification or setting aside of its original order, with the 
return of such additional evidence. The judgment and decree of 
the court shall be final, except that the same shall be subject 
to review by the Supreme Court upon certiorari, as provided in 
section 240 of the Judicial Code.
  (d) Upon the filing of the record with it the jurisdiction of 
the court of appeals of the United States to affirm, enforce, 
modify, or set aside orders of the Commission shall be 
exclusive.
  (e) No order of the Commission or judgment of court to 
enforce the same shall in anywise relieve or absolve any 
person, partnership, or corporation from any liability under 
the Antitrust Acts.
  (f) Complaints, orders, and other processes of the Commission 
under this section may be served by anyone duly authorized by 
the Commission, either (a) by delivering a copy thereof to the 
person to be served, or to a member of the partnership to be 
served, or the president, secretary, or other executive officer 
or a director of the corporation to be served; or (b) by 
leaving a copy thereof at the residence or the principal office 
or place of business of such person, partnership, or 
corporation; or (c) by mailing a copy thereof by registered 
mail or by certified mail addressed to such person, 
partnership, or corporation at his or its residence or 
principal office or place of business. The verified return by 
the person so serving said complaint, order, or other process 
setting forth the manner of said service shall be proof of the 
same, and the return post office receipt for said complaint, 
order, or other process mailed by registered mail or certified 
mail as aforesaid shall be proof of the service of the same.
  (g) An order of the Commission to cease and desist shall 
become final--
          (1) Upon the expiration of the time allowed for 
        filing a petition for review, if no such petition has 
        been duly filed within such time; but the Commission 
        may thereafter modify or set aside its order to the 
        extent provided in the last sentence of subsection (b).
          (2) Except as to any order provision subject to 
        paragraph (4), upon the sixtieth day after such order 
        is served, if a petition for review has been duly 
        filed; except that any such order may be stayed, in 
        whole or in part and subject to such conditions as may 
        be appropriate, by--
                  (A) the Commission;
                  (B) an appropriate court of appeals of the 
                United States, if (i) a petition for review of 
                such order is pending in such court, and (ii) 
                an application for such a stay was previously 
                submitted to the Commission and the Commission, 
                within the 30-day period beginning on the date 
                the application was received by the Commission, 
                either denied the application or did not grant 
                or deny the application; or
                  (C) the Supreme Court, if an applicable 
                petition for certiorari is pending.
          (3) For purposes of subsection (m)(1)(B) and of 
        section 19(a)(2), if a petition for review of the order 
        of the Commission has been filed--
                  (A) upon the expiration of the time allowed 
                for filing a petition for certiorari, if the 
                order of the Commission has been affirmed or 
                the petition for review has been dismissed by 
                the court of appeals and no petition for 
                certiorari has been duly filed;
                  (B) upon the denial of a petition for 
                certiorari, if the order of the Commission has 
                been affirmed or the petition for review has 
                been dismissed by the court of appeals; or
                  (C) upon the expiration of 30 days from the 
                date of issuance of a mandate of the Supreme 
                Court directing that the order of the 
                Commission be affirmed or the petition for 
                review be dismissed.
          (4) In the case of an order provision requiring a 
        person, partnership, or corporation to divest itself of 
        stock, other share capital, or assets, if a petition 
        for review of such order of the Commission has been 
        filed--
                  (A) upon the expiration of the time allowed 
                for filing a petition for certiorari, if the 
                order of the Commission has been affirmed or 
                the petition for review has been dismissed by 
                the court of appeals and no petition for 
                certiorari has been duly filed;
                  (B) upon the denial of a petition for 
                certiorari, if the order of the Commission has 
                been affirmed or the petition for review has 
                been dismissed by the court of appeals; or
                  (C) upon the expiration of 30 days from the 
                date of issuance of a mandate of the Supreme 
                Court directing that the order of the 
                Commission be affirmed or the petition for 
                review be dismissed.
  (h) If the Supreme Court directs that the order of the 
Commission be modified or set aside, the order of the 
Commission rendered in accordance with the mandate of the 
Supreme Court shall become final upon the expiration of thirty 
days from the time it was rendered, unless within such thirty 
days either party has instituted proceedings to have such order 
corrected to accord with the mandate, in which event the order 
of the Commission shall become final when so corrected.
  (i) If the order of the Commission is modified or set aside 
by the circuit court of appeals, and if (1) the time allowed 
for filing a petition for certiorari has expired and no such 
petition has been duly filed, or (2) the petition for 
certiorari has been denied, or (3) the decision of the court 
has been affirmed by the Supreme Court, then the order of the 
Commission rendered in accordance with the mandate of the 
circuit court of appeals shall become final on the expiration 
of thirty days from the time such order of the Commission was 
rendered, unless within such thirty days either party has 
instituted proceedings to have such order corrected so that it 
will accord with the mandate, in which event the order of the 
Commission shall become final when so corrected.
  (j) If the Supreme Court orders a rehearing; or if the case 
is remanded by the circuit court of appeals to the Commission 
for a rehearing, and if (1) the time allowed for filing a 
petition for certiorari has expired, and no such petition has 
been duly filed, or (2) the petition for certiorari has been 
denied, or (3) the decision of the court has been affirmed by 
the Supreme Court, then the order of the Commission rendered 
upon such rehearing shall become final in the same manner as 
though no prior order of the Commission had been rendered.
  (k) As used in this section the term ``mandate'', in case a 
mandate has been recalled prior to the expiration of thirty 
days from the date of issuance thereof, means the final 
mandate.
  (l) Any person, partnership, or corporation who violates an 
order of the Commission after it has become final, and while 
such order is in effect, shall forfeit and pay to the United 
States a civil penalty of not more than $10,000 for each 
violation, which shall accrue to the United States and may be 
recovered in a civil action brought by the Attorney General of 
the United States. Each separate violation of such an order 
shall be a separate offense, except that in the case of a 
violation through continuing failure to obey or neglect to obey 
a final order of the Commission, each day of continuance of 
such failure or neglect shall be deemed a separate offense. In 
such actions, the United States district courts are empowered 
to grant mandatory injunctions and such other and further 
equitable relief as they deem appropriate in the enforcement of 
such final orders of the Commission.
  (m)(1)(A) The Commission may commence a civil action to 
recover a civil penalty in a district court of the United 
States against any person, partnership, or corporation which 
violates any rule under this Act respecting unfair or deceptive 
acts or practices (other than an interpretive rule or a rule 
violation of which the Commission has provided is not an unfair 
or deceptive act or practice in violation of subsection (a)(1)) 
with actual knowledge or knowledge fairly implied on the basis 
of objective circumstances that such act is unfair or deceptive 
and is prohibited by such rule. In such action, such person, 
partnership, or corporation shall be liable for a civil penalty 
of not more than $10,000 for each violation.
  (B) If the Commission determines in a proceeding under 
subsection (b) that any act or practice is unfair or deceptive, 
and issues a final cease and desist order, other than a consent 
order, with respect to such act or practice, then the 
Commission may commence a civil action to obtain a civil 
penalty in a district court of the United States against any 
person, partnership, or corporation which engages in such act 
or practice--
          (1) after such cease and desist order becomes final 
        (whether or not such person, partnership, or 
        corporation was subject to such cease and desist 
        order), and
          (2) with actual knowledge that such act or practice 
        is unfair or deceptive and is unlawful under subsection 
        (a)(1) of this section.
                In such action, such person, partnership, or 
                corporation shall be liable for a civil penalty 
                of not more than $10,000 for each violation.
  (C)(1) In the case of a violation through continuing failure 
to comply with a rule or with section 5(a)(1), each day of 
continuance of such failure shall be treated as a separate 
violation, for purposes of subparagraphs (A) and (B). In 
determining the amount of such a civil penalty, the court shall 
take into account the degree of culpability, any history of 
prior such conduct, ability to pay, effect on ability to 
continue to do business, and such other matters as justice may 
require.
  (2) If the cease and desist order establishing that the act 
or practice is unfair or deceptive was not issued against the 
defendant in a civil penalty action under paragraph (1)(B) the 
issues of fact in such action against such defendant shall be 
tried de novo. Upon request of any party to such an action 
against such defendant, the court shall also review the 
determination of law made by the Commission in the proceeding 
under subsection (b) that the act or practice which was the 
subject of such proceeding constituted an unfair or deceptive 
act or practice in violation of subsection (a).
  (3) The Commission may compromise or settle any action for a 
civil penalty if such compromise or settlement is accompanied 
by a public statement of its reasons and is approved by the 
court.
  [(n) The Commission shall have no authority under this 
section or section 18 to declare unlawful an act or practice on 
the grounds that such act or practice is unfair unless the act 
or practice causes or is likely to cause substantial injury to 
consumers which is not reasonably avoidable by consumers 
themselves and not outweighed by countervailing benefits to 
consumers or to competition. In determining whether an act or 
practice is unfair, the Commission may consider established 
public policies as evidence to be considered with all other 
evidence. Such public policy considerations may not serve as a 
primary basis for such determination.]
  (n) Unlawful Act or Practice.--
          (1) Substantial injury required.--
                  (A) In general.--The Commission shall have no 
                authority under this section or section 18 to 
                declare unlawful an act or practice on the 
                grounds that such act or practice is unfair 
                unless the act or practice causes or is likely 
                to cause substantial injury to consumers which 
                is not reasonably avoidable by consumers 
                themselves and not outweighed by countervailing 
                benefits to consumers or to competition.
                  (B) Substantial injury to consumers.--For 
                purposes of this subsection, an act or practice 
                does not cause and is not likely to cause 
                substantial injury to consumers if the injury 
                or harm resulting from such act or practice is 
                trivial or merely speculative. An injury may be 
                sufficiently substantial if the injury does a 
                small harm to a large number of people. An act 
                or practice may be likely to cause a 
                substantial injury if the act or practice 
                raises a significant risk of concrete harm.
                  (C) Considerations required.--In determining 
                whether an act or practice causes or is likely 
                to cause substantial injury to consumers under 
                this subsection, the Commission shall consider 
                the following:
                          (i) Whether the act or practice 
                        results in monetary harm.
                          (ii) Whether the act or practice 
                        results in unwarranted health or safety 
                        risk.
                          (iii) Whether the act or practice 
                        results only in emotional or other more 
                        subjective harm.
          (2) Net effects of injury required.--
                  (A) Considerations required.--An act or 
                practice is not unfair unless the act or 
                practice is injurious in its net effects. In 
                determining whether an act or practice is 
                injurious in its net effects, the Commission 
                shall consider the following:
                          (i) The various costs for a remedy, 
                        including the costs to the parties 
                        directly before the Commission.
                          (ii) The burdens on society in 
                        general in the form of increased 
                        paperwork, increased regulatory burdens 
                        on the flow of information, reduced 
                        incentives to innovation and capital 
                        formation, and other similar matters.
                  (B) Consumer decisions.--The Commission may 
                not second-guess the wisdom of particular 
                consumer decisions, but may consider whether 
                the act or practice unreasonably creates or 
                takes advantage of an obstacle to the free 
                exercise of consumer decisionmaking.
          (3) Public policy considerations.--In determining 
        whether an act or practice is unfair, the Commission 
        may consider established public policies as evidence to 
        be considered with all other evidence. Such public 
        policy considerations may not serve as a primary basis 
        for such determination.
  (o) Termination Clause Required for Consent Orders.--Any 
consent order entered into by the Commission relating to 
alleged unfair or deceptive acts or practices by the person, 
partnership, or corporation, subject to the consent order shall 
include a termination clause that the consent order shall 
expire not later than 8 years after the date on which the 
consent order is entered into, unless the consent order relates 
to alleged fraud by the person, partnership, or corporation 
subject to the consent order or requires a time limit longer 
than 8 years based on the factors described in this subsection. 
In determining the time limit for any termination clause, the 
Commission shall consider each of the following factors:
          (1) The impact of technological progress on the 
        continuing relevance of the consent order.
          (2) Whether there is reason to believe that the 
        person, partnership, or corporation would continue to 
        engage in activities that violate this section without 
        the consent order.
  (p) Consent Order Review.--Any consent order entered into by 
the Commission that is unrelated to alleged fraud by the 
person, partnership, or corporation subject to the consent 
order and has a termination date more than 5 years after such 
consent order is entered into shall include a clause providing 
for Commission review of the consent order 5 years after the 
date on which the order is entered into. Such clause shall 
require the Commission to evaluate whether the consent order 
has achieved its initial purposes based on the factors 
described in subsection (o). The clause shall provide that if, 
based on such evaluation, the Commission determines that the 
consent order has achieved its purposes, the Commission shall 
terminate the consent order.
  (q) Petition for Review of Existing Consent Orders.--Any 
person, partnership, or corporation that as of the effective 
date of this subsection is subject to a consent order that is 
unrelated to alleged fraud and has been effective for a period 
of at least five years may petition the Commission to terminate 
such consent order. In evaluating a petition to terminate a 
consent order under this subsection, the Commission shall 
consider whether the consent order has achieved its initial 
purposes based on each of the factors described in subsection 
(o). If, based on such evaluation, the Commission determines 
that the consent order has achieved its purposes, the 
Commission shall terminate the consent order.
  (r) Report on Investigations.--
          (1) In general.--The Commission shall, on an annual 
        basis, submit a report to Congress on investigations 
        with respect to unfair or deceptive acts or practices, 
        and with respect to unfair methods of competition, in 
        or affecting commerce (within the meaning of subsection 
        (a)(1)), detailing--
                  (A) the number of such investigations the 
                Commission has commenced;
                  (B) the number of such investigations the 
                Commission has closed with no official agency 
                action;
                  (C) the disposition of such investigations, 
                if such investigations have concluded and 
                resulted in official agency action; and
                  (D) for each such investigation that was 
                closed with no official agency action, subject 
                to paragraph (2), a description--
                          (i) sufficient to indicate the legal 
                        analysis supporting the Commission's 
                        decision not to continue such 
                        investigation; and
                          (ii) of the industry sectors of the 
                        persons, partnerships, or corporations 
                        who are subjects of such investigation.
          (2) Consent required.--The Commission shall not 
        include in a report required under paragraph (1) the 
        description required under subparagraph (D) of such 
        paragraph unless the Commission has--
                  (A) provided to each person, partnership, or 
                corporation who is a subject of the 
                investigation a notification containing the 
                description to be included in the report; and
                  (B) obtained the consent of each such person, 
                partnership, or corporation to the inclusion of 
                the description in the report.
          (3) Privacy protection.--The description required 
        under paragraph (1)(D) shall not include the identity 
        of any person, partnership, or corporation who is a 
        subject of the investigation or any other information 
        that identifies the person, partnership, or 
        corporation.

           *       *       *       *       *       *       *


SEC. 6A. ECONOMIC ANALYSIS REQUIRED.

  (a) In General.--Except as provided in subsection (b), the 
Commission may not publish a recommendation for legislative or 
regulatory action unless--
          (1) the Commission publishes any economic analysis or 
        advice prepared by the Bureau of Economics of the 
        Commission relating to such recommendation; or
          (2) if no such economic analysis or advice was 
        prepared, the Commission indicates, in writing as part 
        of such recommendation, that no such analysis or advice 
        was given.
  (b) Exception.--The requirement in subsection (a) shall not 
apply if--
          (1) the recommendation for legislative or regulatory 
        action is made as part of an appearance by a 
        Commissioner before Congress;
          (2) the recommendation is made to a State or local 
        government entity;
          (3) the recommendation is requested by and submitted 
        to any member or committee of Congress, including the 
        Committee on Energy and Commerce of the House of 
        Representatives;
          (4) the recommendation is submitted to another 
        Federal agency in response to a notice of proposed 
        rulemaking, including comments to the Federal 
        Communications Commission; or
          (5) the recommendation is submitted to the United 
        Kingdom, the European Union or members thereof, 
        including recommendations to the European Parliament, 
        the European Commission, or any data protection 
        authorities of any member state with regard to cross-
        border data flows and other privacy and data security 
        matters.

           *       *       *       *       *       *       *

  Sec. 18. (a)(1) Except as provided in subsection (h), the 
Commission may prescribe--
          (A) interpretive rules and general statements of 
        policy with respect to unfair or deceptive acts or 
        practices in or affecting commerce (within the meaning 
        of section 5(a)(1) of this Act), and
          (B) rules which define with specificity acts or 
        practices which are unfair or deceptive acts or 
        practices in or affecting commerce (within the meaning 
        of such section 5(a)(1)), except that the Commission 
        shall not develop or promulgate any trade rule or 
        regulation with regard to the regulation of the 
        development and utilization of the standards and 
        certification activities pursuant to this section. 
        Rules under this subparagraph may include requirements 
        prescribed for the purpose of preventing such acts or 
        practices.
  (2) The Commission shall have no authority under this Act, 
other than its authority under this section, to prescribe any 
rule with respect to unfair or deceptive acts or practices in 
or affecting commerce (within the meaning of section 5(a)(1)). 
The preceding sentence shall not affect any authority of the 
Commission to prescribe rules (including interpretive rules), 
and general statements of policy, with respect to unfair 
methods of competition in or affecting commerce.
  (3)(A) No guidelines, general statements of policy, or 
similar guidance related either to unfair methods of 
competition or to unfair or deceptive acts or practices, in or 
affecting commerce, issued by the Commission shall confer any 
rights upon any person, State, or locality, nor shall operate 
to bind the Commission or any person, State, or locality to the 
approach recommended in such guidelines, general statements of 
policy, or similar guidance. In any enforcement action, the 
Commission shall prove a violation of a provision of law 
enforced by the Commission. The Commission may not base an 
enforcement action on, or execute a consent order based on, 
acts or practices that are alleged to be inconsistent with any 
such guidelines, general statements of policy, or similar 
guidance, unless the acts or practices violate a provision of 
law enforced by the Commission.
  (B) Compliance with any guidelines, general statement of 
policy, or similar guidance issued by the Commission may be 
used as evidence of compliance with the provision of law under 
which the guidelines, general statement of policy, or guidance 
was issued.
  (C) Nothing in this paragraph shall be construed to confer 
any authority upon or negate any authority of the Commission to 
issue guidelines, general statements of policy, or similar 
guidance.
  (b)(1) When prescribing a rule under subsection (a)(1)(B) of 
this section, the Commission shall proceed in accordance with 
section 553 of title 5, United States Code (without regard to 
any reference in such section to sections 556 and 557 of such 
title), and shall also (A) publish a notice of proposed 
rulemaking stating with particularity the text of the rule, 
including any alternatives, which the Commission proposes to 
promulgate, and the reason for the proposed rule; (B) allow 
interested persons to submit written data, views, and 
arguments, and make all such submissions publicly available; 
(C) provide an opportunity for an informal hearing in 
accordance with subsection (c); and (D) promulgate, if 
appropriate, a final rule based on the matter in the rule-
making record (as defined in subsection (e)(1)(B)), together 
with a statement of basis and purpose.
  (2)(A) Prior to the publication of any notice of proposed 
rulemaking pursuant to paragraph (1)(A), the Commission shall 
publish an advance notice of proposed rulemaking in the Federal 
Register. Such advance notice shall--
          (i) contain a brief description of the area of 
        inquiry under consideration, the objectives which the 
        Commission seeks to achieve, and possible regulatory 
        alternatives under consideration by the Commission; and
          (ii) invite the response of interested parties with 
        respect to such proposed rulemaking, including any 
        suggestions or alternative methods for achieving such 
        objectives.
  (B) The Commission shall submit such advance notice of 
proposed rulemaking to the Committee on Commerce, Science, and 
Transportation of the Senate and to the Committee on Energy and 
Commerce of the House of Representatives. The Commission may 
use such additional mechanisms as the Commission considers 
useful to obtain suggestions regarding the content of the area 
of inquiry before the publication of a general notice of 
proposed rulemaking under paragraph (1)(A).
  (C) The Commission shall, 30 days before the publication of a 
notice of proposed rulemaking pursuant to paragraph (1)(A), 
submit such notice to the Committee on Commerce, Science, and 
Transportation of the Senate and to the Committee on Energy and 
Commerce of the House of Representatives.
  (3) The Commission shall issue a notice of proposed 
rulemaking pursuant to paragraph (1)(A) only where it has 
reason to believe that the unfair or deceptive acts or 
practices which are the subject of the proposed rulemaking are 
prevalent. The Commission shall make a determination that 
unfair or deceptive acts or practices are prevalent under this 
paragraph only if--
          (A) it has issued cease and desist orders regarding 
        such acts or practices, or
          (B) any other information available to the Commission 
        indicates a widespread pattern of unfair or deceptive 
        acts or practices.
  (c) The Commission shall conduct any informal hearings 
required by subsection (b)(1)(c) of this section in accordance 
with the following procedure:
  (1)(A) The Commission shall provide for the conduct of 
proceedings under this subsection by hearing officers who shall 
perform their functions in accordance with the requirements of 
this subsection.
  (B) The officer who presides over the rulemaking proceedings 
shall be responsible to a chief presiding officer who shall not 
be responsible to any other officer or employee of the 
Commission. The officer who presides over the rulemaking 
proceeding shall make a recommended decision based upon the 
findings and conclusions of such officer as to all relevant and 
material evidence, except that such recommended decision may be 
made by another officer if the officer who presided over the 
proceeding is no longer available to the Commission.
  (C) Except as required for the disposition of ex parte 
matters as authorized by law, no presiding officer shall 
consult any person or party with respect to any fact in issue 
unless such officer gives notice and opportunity for all 
parties to participate.
  (2) Subject to paragraph (3) of this subsection, an 
interested person is entitled--
          (A) to present his position orally or by documentary 
        submissions (or both), and
          (B) if the Commission determines that there are 
        disputed issues of material fact it is necessary to 
        resolve, to present such rebuttal submissions and to 
        conduct (or have conducted under paragraph (3)(B)) such 
        cross-examination of persons as the Commission 
        determines (i) to be appropriate, and (ii) to be 
        required for a full and true disclosure with respect to 
        such issues.
  (3) The Commission may prescribe such rules and make such 
rulings concerning proceedings in such hearings as may tend to 
avoid unnecessary costs or delay. Such rules or rulings may 
include (A) imposition of reasonable time limits on each 
interested person's oral presentations, and (B) requirements 
that any cross-examination to which a person may be entitled 
under paragraph (2) be conducted by the Commission on behalf of 
that person in such manner as the Commission determines (i) to 
be appropriate, and (ii) to be required for a full and true 
disclosure with respect to disputed issues of material fact.
  (4)(A) Except as provided in subparagraph (B), if a group of 
persons each of whom under paragraphs (2) and (3) would be 
entitled to conduct (or have conducted) cross-examination and 
who are determined by the Commission to have the same or 
similar interests in the proceeding cannot agree upon a single 
representative of such interests for purposes of cross-
examination, the Commission may make rules and rulings (i) 
limiting the representation of such interest, for such 
purposes, and (ii) governing the manner in which such cross-
examination shall be limited.
  (B) When any person who is a member of a group with respect 
to which the Commission has made a determination under 
subparagraph (A) is unable to agree upon group representation 
with the other members of the group, then such person shall not 
be denied under the authority of subparagraph (A) the 
opportunity to conduct (or have conducted) cross-examination as 
to issues affecting his particular interests if (i) he 
satisfies the Commission that he has made a reasonable and good 
faith effort to reach agreement upon group representation with 
the other members of the group and (ii) the Commission 
determines that there are substantial and relevant issues which 
are not adequately presented by the group representative.
  (5) A verbatim transcript shall be taken of any oral 
presentation, and cross-examination, in an informal hearing to 
which this subsection applies. Such transcript shall be 
available to the public.
  (d)(1) The Commission's statement of basis and purpose to 
accompany a rule promulgated under subsection (a)(1)(B) shall 
include (A) a statement as to the prevalence of the acts or 
practices treated by the rule; (B) a statement as to the manner 
and context in which such acts or practices are unfair or 
deceptive; and (C) a statement as to the economic effect of the 
rule, taking into account the effect on small business and 
consumers.
  (2)(A) The term ``Commission'' as used in this subsection and 
subsections (b) and (c) includes any person authorized to act 
in behalf of the Commission in any part of the rulemaking 
proceeding.
  (B) A substantive amendment to, or repeal of, a rule 
promulgated under subsection (a)(1)(B) shall be prescribed, and 
subject to judicial review, in the same manner as a rule 
prescribed under such subsection. An exemption under subsection 
(g) shall not be treated as an amendment or repeal of a rule.
  (3) When any rule under subsection (a)(1)(B) takes effect a 
subsequent violation thereof shall constitute an unfair or 
deceptive act or practice in violation of section 5(a)(1) of 
this Act, unless the Commission otherwise expressly provides in 
such rule.
  (e)(1)(A) Not later than 60 days after a rule is promulgated 
under subsection (a)(1)(B) by the Commission, any interested 
person (including a consumer or consumer organization) may file 
a petition, in the United States Court of Appeals for the 
District of Columbia circuit or for the circuit in which such 
person resides or has his principal place of business, for 
judicial review of such rule. Copies of the petition shall be 
forthwith transmitted by the clerk of the court to the 
Commission or other officer designated by it for that purpose. 
The provisions of section 2112 of title 28, United States Code, 
shall apply to the filing of the rulemaking record of 
proceedings on which the Commission based its rule and to the 
transfer of proceedings in the courts of appeals.
  (B) For purposes of this section, the term ``rulemaking 
record'' means the rule, its statement of basis and purpose, 
the transcript required by subsection (c)(5), any written 
submissions, and any other information which the Commission 
considers relevant to such rule.
  (2) If the petitioner or the Commission applies to the court 
for leave to make additional oral submissions or written 
presentations and shows to the satisfaction of the court that 
such submissions and presentations would be material and that 
there were reasonable grounds for the submissions and failure 
to make such submissions and presentations in the proceeding 
before the Commission, the court may order the Commission to 
provide additional opportunity to make such submissions and 
presentations. The Commission may modify or set aside its rule 
or make a new rule by reason of the additional submissions and 
presentations and shall file such modified or new rule, and the 
rule's statement of basis of purpose, with the return of such 
submissions and presentations. The court shall thereafter 
review such new or modified rule.
  (3) Upon the filing of the petition under paragraph (1) of 
this subsection, the court shall have jurisdiction to review 
the rule in accordance with chapter 7 of title 5, United States 
Code, and to grant appropriate relief, including interim 
relief, as provided in such chapter. The court shall hold 
unlawful and set aside the rule on any ground specified in 
subparagraphs (A), (B), (C), or (D) of section 706(2) of title 
5, United States Code (taking due account of the rule of 
prejudicial error), or if--
          (A) the court finds that the Commission's action is 
        not supported by substantial evidence in the rulemaking 
        record (as defined in paragraph (1)(B) of this 
        subsection) taken as a whole, or
          (B) the court finds that--
                  (i) a Commission determination under 
                subsection (c) that the petitioner is not 
                entitled to conduct cross-examination or make 
                rebuttal submissions, or
                  (ii) a Commission rule or ruling under 
                subsection (c) limiting the petitioner's cross-
                examination or rebuttal submissions,
        has precluded disclosure of disputed material facts 
        which was necessary for fair determination by the 
        Commission of the rulemaking proceeding taken as a 
        whole.
The term ``evidence,'' as used in this paragraph, means any 
matter in the rulemaking record.
  (4) The judgment of the court affirming or setting aside, in 
whole or in part, any such rule shall be final, subject to 
review by the Supreme Court of the United States upon 
certiorari or certification, as provided in section 1254 of 
title 28, United States Code.
  (5)(A) Remedies under the preceding paragraphs of this 
subsection are in addition to and not in lieu of any other 
remedies provided by law.
  (B) The United States Courts of Appeals shall have exclusive 
jurisdiction of any action to obtain judicial review (other 
than in an enforcement proceeding) of a rule prescribed under 
subsection (a)(1)(B), if any district court of the United 
States would have had jurisdiction of such action but for this 
subparagraph. Any such action shall be brought in the United 
States Court of Appeals for the District of Columbia circuit, 
or for any circuit which includes a judicial district in which 
the action could have been brought but for this subparagraph.
  (C) A determination, rule, or ruling of the Commission 
described in paragraph (3)(B) (i) or (ii) may be reviewed only 
in a proceeding under this subsection and only in accordance 
with paragraph (3)(B). Section 706(2)(E) of title 5, United 
States Code, shall not apply to any rule promulgated under 
subsection (a)(1)(B). The contents and adequacy of any 
statement required by subsection (b)(1)(D) shall not be subject 
to judicial review in any respect.
  (f) Definitions of Banks, Savings and Loan Institutions, and 
Federal Credit Unions.--
          (1)
          (2) Definition.--For purposes of this Act, the term 
        ``bank'' means--
                  (A) national banks and Federal branches and 
                Federal agencies of foreign banks;
                  (B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                  (C) banks insured by the Federal Deposit 
                Insurance Corporation (other than banks 
                referred to in subparagraph (A) or (B)) and 
                insured State branches of foreign banks.
  (3) For purposes of this Act, the term ``savings and loan 
institution'' has the same meaning as in section 3 of the 
Federal Deposit Insurance Act.
  (4) For purposes of this Act, the term ``Federal credit 
union'' has the same meaning as in sections 120 and 206 of the 
Federal Credit Union Act (12 U.S.C. 1766 and 1786).
        The terms used in this paragraph that are not defined 
        in the Federal Trade Commission Act or otherwise 
        defined in section 3(s) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(s)) shall have the 
        meaning given to them in section 1(b) of the 
        International Banking Act of 1978 (12 U.S.C. 3101).
  (g)(1) Any person to whom a rule under subsection (a)(1)(B) 
of this section applies may petition the Commission for an 
exemption from such rule.
  (2) If, on its own motion or on the basis of a petition under 
paragraph (1), the Commission finds that the application of a 
rule prescribed under subsection (a)(1)(B) to any person or 
class or persons is not necessary to prevent the unfair or 
deceptive act or practice to which the rule relates, the 
Commission may exempt such person or class from all or part of 
such rule. Section 553 of title 5, United States Code, shall 
apply to action under this paragraph.
  (3) Neither the pendency of a proceeding under this 
subsection respecting an exemption from a rule, nor the 
pendency of judicial proceedings to review the Commission's 
action or failure to act under this subsection, shall stay the 
applicability of such rule under subsection (a)(1)(B).
  (h) The Commission shall not have any authority to promulgate 
any rule in the children's advertising proceeding pending on 
the date of the enactment of the Federal Trade Commission 
Improvements Act of 1980 or in any substantially similar 
proceeding on the basis of a determination by the Commission 
that such advertising constitutes an unfair act or practice in 
or affecting commerce.
  (i)(1) For purposes of this subsection, the term ``outside 
party'' means any person other than (A) a Commissioner; (B) an 
officer or employee of the Commission; or (C) any person who 
has entered into a contract or any other agreement or 
arrangement with the Commission to provide any goods or 
services (including consulting services) to the Commission.
  (2) Not later than 60 days after the date of the enactment of 
the Federal Trade Commission Improvements Act of 1980, the 
Commission shall publish a proposed rule, and not later than 
180 days after such date of enactment the Commission shall 
promulgate a final rule, which shall authorize the Commission 
or any Commissioner to meet with any outside party concerning 
any rulemaking proceeding of the Commission. Such rule shall 
provide that--
          (A) notice of any such meeting shall be included in 
        any weekly calendar prepared by the Commission; and
          (B) a verbatim record or a summary of any such 
        meeting, or of any communication relating to any such 
        meeting, shall be kept, made available to the public, 
        and included in the rulemaking record.
  (j) Not later than 60 days after the date of the enactment of 
the Federal Trade Commission Improvements Act of 1980, the 
Commission shall publish a proposed rule, and not later than 
180 days after such date of enactment the Commission shall 
promulgate a final rule, which shall prohibit any officer, 
employee, or agent of the Commission with any investigative 
responsibility or other responsibility relating to any 
rulemaking proceeding within any operating bureau of the 
Commission, from communicating or causing to be communicated to 
any Commissioner or to the personal staff of any Commissioner 
any fact which is relevant to the merits of such proceeding and 
which is not on the rulemaking record of such proceeding, 
unless such communication is made available to the public and 
is included in the rulemaking record. The provisions of this 
subsection shall not apply to any communication to the extent 
such communication is required for the disposition of ex parte 
matters as authorized by law.

           *       *       *       *       *       *       *

  Sec. 20. (a) For purposes of this section:
          (1) The terms ``civil investigative demand'' and 
        ``demand'' mean any demand issued by the Commission 
        under subsection (c)(1).
          (2) The term ``Commission investigation'' means any 
        inquiry conducted by a Commission investigator for the 
        purpose of ascertaining whether any person is or has 
        been engaged in any unfair or deceptive acts or 
        practices in or affecting commerce (within the meaning 
        of section 5(a)(1)) or in any antitrust violations.
          (3) The term ``Commission investigator'' means any 
        attorney or investigator employed by the Commission who 
        is charged with the duty of enforcing or carrying into 
        effect any provisions relating to unfair or deceptive 
        acts or practices in or affecting commerce (within the 
        meaning of section 5(a)(1)) or any provisions relating 
        to antitrust violations.
          (4) The term ``custodian'' means the custodian or any 
        deputy custodian designated under section 21(b)(2)(A).
          (5) The term ``documentary material'' includes the 
        original or any copy of any book, record, report, 
        memorandum, paper, communication, tabulation, chart, or 
        other document.
          (6) The term ``person'' means any natural person, 
        partnership, corporation, association, or other legal 
        entity, including any person acting under color or 
        authority of State law.
          (7) The term ``violation'' means any act or omission 
        constituting an unfair or deceptive act or practice in 
        or affecting commerce (within the meaning of section 
        5(a)(1)) or any antitrust violation.
          (8) The term ``antitrust violation'' means--
                  (A) any unfair method of competition (within 
                the meaning of section 5(a)(1));
                  (B) any violation of the Clayton Act or of 
                any other Federal statute that prohibits, or 
                makes available to the Commission a civil 
                remedy with respect to, any restraint upon or 
                monopolization of interstate or foreign trade 
                or commerce;
                  (C) with respect to the International 
                Antitrust Enforcement Assistance Act of 1994, 
                any violation of any of the foreign antitrust 
                laws (as defined in section 12 of such Act) 
                with respect to which a request is made under 
                section 3 of such Act; or
                  (D) any activity in preparation for a merger, 
                acquisition, joint venture, or similar 
                transaction, which if consummated, may result 
                in any such unfair method of competition or in 
                any such violation.
  (b) For the purpose of investigations performed pursuant to 
this section with respect to unfair or deceptive acts or 
practices in or affecting commerce (within the meaning of 
section 5(a)(1)), all actions of the Commission taken under 
section 6 and section 9 shall be conducted pursuant to 
subsection (c).
  (c)(1) Whenever the Commission has reason to believe that any 
person may be in possession, custody, or control of any 
documentary material or tangible things, or may have any 
information, relevant to unfair or deceptive acts or practices 
in or affecting commerce (within the meaning of section 
5(a)(1)), or to antitrust violations, the Commission may, 
before the institution of any proceedings under this Act, issue 
in writing, and cause to be served upon such person, a civil 
investigative demand requiring such person to produce such 
documentary material for inspection and copying or 
reproduction, to submit such tangible things, to file written 
reports or answers to questions, to give oral testimony 
concerning documentary material or other information, or to 
furnish any combination of such material, answers, or 
testimony.
  (2) Each civil investigative demand shall state the nature of 
the conduct constituting the alleged violation which is under 
investigation and the provision of law applicable to such 
violation.
  (3) Each civil investigative demand for the production of 
documentary material shall--
          (A) describe each class of documentary material to be 
        produced under the demand with such definiteness and 
        certainty as to permit such material to be fairly 
        identified;
          (B) prescribe a return date or dates which will 
        provide a reasonable period of time within which the 
        material so demanded may be assembled and made 
        available for inspection and copying or reproduction; 
        and
          (C) identify the custodian to whom such material 
        shall be made available.
  (4) Each civil investigative demand for the submission of 
tangible things shall--
          (A) describe each class of tangible things to be 
        submitted under the demand with such definiteness and 
        certainty as to permit such things to be fairly 
        identified;
          (B) prescribe a return date or dates which will 
        provide a reasonable period of time within which the 
        things so demanded may be assembled and submitted; and
          (C) identify the custodian to whom such things shall 
        be submitted.
  (5) Each civil investigative demand for written reports or 
answers to questions shall--
          (A) propound with definiteness and certainty the 
        reports to be produced or the questions to be answered;
          (B) prescribe a date or dates at which time written 
        reports or answers to questions shall be submitted; and
          (C) identify the custodian to whom such reports or 
        answers shall be submitted.
  (6) Each civil investigative demand for the giving of oral 
testimony shall--
          (A) prescribe a date, time, and place at which oral 
        testimony shall be commenced; and
          (B) identify a Commission investigator who shall 
        conduct the investigation and the custodian to whom the 
        transcript of such investigation shall be submitted.
  (7)(A) Any civil investigative demand may be served by any 
Commission investigator at any place within the territorial 
jurisdiction of any court of the United States.
  (B) Any such demand or any enforcement petition filed under 
this section may be served upon any person who is not found 
within the territorial jurisdiction of any court of the United 
States, in such manner as the Federal Rules of Civil Procedure 
prescribe for service in a foreign nation.
  (C) To the extent that the courts of the United States have 
authority to assert jurisdiction over such person consistent 
with due process, the United States District Court for the 
District of Columbia shall have the same jurisdiction to take 
any action respecting compliance with this section by such 
person that such district court would have if such person were 
personally within the jurisdiction of such district court.
  (8) Service of any civil investigative demand or any 
enforcement petition filed under this section may be made upon 
a partnership, corporation, association, or other legal entity 
by--
          (A) delivering a duly executed copy of such demand or 
        petition to any partner, executive officer, managing 
        agent, or general agent of such partnership, 
        corporation, association, or other legal entity, or to 
        any agent of such partnership, corporation, 
        association, or other legal entity authorized by 
        appointment or by law to receive service of process on 
        behalf of such partnership, corporation, association, 
        or other legal entity;
          (B) delivering a duly executed copy of such demand or 
        petition to the principal office or place of business 
        of the partnership, corporation, association, or other 
        legal entity to be served; or
          (C) depositing a duly executed copy in the United 
        States mails, by registered or certified mail, return 
        receipt requested, duly addressed to such partnership, 
        corporation, association, or other legal entity at its 
        principal office or place of business.
  (9) Service of any civil investigative demand or of any 
enforcement petition filed under this section may be made upon 
any natural person by--
          (A) delivering a duly executed copy of such demand or 
        petition to the person to be served; or
          (B) depositing a duly executed copy in the United 
        States mails by registered or certified mail, return 
        receipt requested, duly addressed to such person at his 
        residence or principal office or place of business.
  (10) A verified return by the individual serving any civil 
investigative demand or any enforcement petition filed under 
this section setting forth the manner of such service shall be 
proof of such service. In the case of service by registered or 
certified mail, such return shall be accompanied by the return 
post office receipt of delivery of such demand or enforcement 
petition.
  (11) The production of documentary material in response to a 
civil investigative demand shall be made under a sworn 
certificate, in such form as the demand designates, by the 
person, if a natural person, to whom the demand is directed or, 
if not a natural person, by any person having knowledge of the 
facts and circumstances relating to such production, to the 
effect that all of the documentary material required by the 
demand and in the possession, custody, or control of the person 
to whom the demand is directed has been produced and made 
available to the custodian.
  (12) The submission of tangible things in response to a civil 
investigative demand shall be made under a sworn certificate, 
in such form as the demand designates, by the person to whom 
the demand is directed or, if not a natural person, by any 
person having knowledge of the facts and circumstances relating 
to such production, to the effect that all of the tangible 
things required by the demand and in the possession, custody, 
or control of the person to whom the demand is directed have 
been submitted to the custodian.
  (13) Each reporting requirement or question in a civil 
investigative demand shall be answered separately and fully in 
writing under oath, unless it is objected to, in which event 
the reasons for the objection shall be stated in lieu of an 
answer, and it shall be submitted under a sworn certificate, in 
such form as the demand designates, by the person, if a natural 
person, to whom the demand is directed or, if not a natural 
person, by any person responsible for answering each reporting 
requirement or question, to the effect that all information 
required by the demand and in the possession, custody, control, 
or knowledge of the person to whom the demand is directed has 
been submitted.
  (14)(A) Any Commission investigator before whom oral 
testimony is to be taken shall put the witness on oath or 
affirmation and shall personally, or by any individual acting 
under his direction and in his presence, record the testimony 
of the witness. The testimony shall be taken stenographically 
and transcribed. After the testimony is fully transcribed, the 
Commission investigator before whom the testimony is taken 
shall promptly transmit a copy of the transcript of the 
testimony to the custodian.
  (B) Any Commission investigator before whom oral testimony is 
to be taken shall exclude from the place where the testimony is 
to be taken all other persons except the person giving the 
testimony, his attorney, the officer before whom the testimony 
is to be taken, and any stenographer taking such testimony.
  (C) The oral testimony of any person taken pursuant to a 
civil investigative demand shall be taken in the judicial 
district of the United States in which such person resides, is 
found, or transacts business, or in such other place as may be 
agreed upon by the Commission investigator before whom the oral 
testimony of such person is to be taken and such person.
  (D)(i) Any person compelled to appear under a civil 
investigative demand for oral testimony pursuant to this 
section may be accompanied, represented, and advised by an 
attorney. The attorney may advise such person, in confidence, 
either upon the request of such person or upon the initiative 
of the attorney, with respect to any question asked of such 
person.
  (ii) Such person or attorney may object on the record to any 
question, in whole or in part, and shall briefly state for the 
record the reason for the objection. An objection may properly 
be made, received, and entered upon the record when it is 
claimed that such person is entitled to refuse to answer the 
question on grounds of any constitutional or other legal right 
or privilege, including the privilege against self-
incrimination. Such person shall not otherwise object to or 
refuse to answer any question, and shall not himself or through 
his attorney otherwise interrupt the oral examination. If such 
person refuses to answer any question, the Commission may 
petition the district court of the United States pursuant to 
this section for an order compelling such person to answer such 
question.
  (iii) If such person refuses to answer any question on 
grounds of the privilege against self-incrimination, the 
testimony of such person may be compelled in accordance with 
the provisions of section 6004 of title 18, United States Code.
  (E)(i) After the testimony of any witness is fully 
transcribed, the Commission investigator shall afford the 
witness (who may be accompanied by an attorney) a reasonable 
opportunity to examine the transcript. The transcript shall be 
read to or by the witness, unless such examination and reading 
are waived by the witness. Any changes in form or substance 
which the witness desires to make shall be entered and 
identified upon the transcript by the Commission investigator 
with a statement of the reasons given by the witness for making 
such changes. The transcript shall then be signed by the 
witness, unless the witness in writing waives the signing, is 
ill, cannot be found, or refuses to sign.
  (ii) If the transcript is not signed by the witness during 
the 30-day period following the date upon which the witness is 
first afforded a reasonable opportunity to examine it, the 
Commission investigator shall sign the transcript and state on 
the record the fact of the waiver, illness, absence of the 
witness, or the refusal to sign, together with any reasons 
given for the failure to sign.
  (F) The Commission investigator shall certify on the 
transcript that the witness was duly sworn by him and that the 
transcript is a true record of the testimony given by the 
witness, and the Commission investigator shall promptly deliver 
the transcript or send it by registered or certified mail to 
the custodian.
  (G) The Commission investigator shall furnish a copy of the 
transcript (upon payment of reasonable charges for the 
transcript) to the witness only, except that the Commission may 
for good cause limit such witness to inspection of the official 
transcript of his testimony.
  (H) Any witness appearing for the taking of oral testimony 
pursuant to a civil investigative demand shall be entitled to 
the same fees and mileage which are paid to witnesses in the 
district courts of the United States.
  (d) Materials received as a result of a civil investigative 
demand shall be subject to the procedures established in 
section 21.
  (e) Whenever any person fails to comply with any civil 
investigative demand duly served upon him under this section, 
or whenever satisfactory copying or reproduction of material 
requested pursuant to the demand cannot be accomplished and 
such person refuses to surrender such material, the Commission, 
through such officers or attorneys as it may designate, may 
file, in the district court of the United States for any 
judicial district in which such person resides, is found, or 
transacts business, and serve upon such person, a petition for 
an order of such court for the enforcement of this section. All 
process of any court to which application may be made as 
provided in this subsection may be served in any judicial 
district.
  (f)(1) Not later than 20 days after the service of any civil 
investigative demand upon any person under subsection (c), or 
at any time before the return date specified in the demand, 
whichever period is shorter, or within such period exceeding 20 
days after service or in excess of such return date as may be 
prescribed in writing, subsequent to service, by any Commission 
investigator named in the demand, such person may file with the 
Commission a petition for an order by the Commission modifying 
or setting aside the demand.
  (2) The time permitted for compliance with the demand in 
whole or in part, as deemed proper and ordered by the 
Commission, shall not run during the pendency of such petition 
at the Commission, except that such person shall comply with 
any portions of the demand not sought to be modified or set 
aside. Such petition shall specify each ground upon which the 
petitioner relies in seeking such relief, and may be based upon 
any failure of the demand to comply with the provisions of this 
section, or upon any constitutional or other legal right or 
privilege of such person.
  (g) At any time during which any custodian is in custody or 
control of any documentary material, tangible things, reports, 
answers to questions, or transcripts of oral testimony given by 
any person in compliance with any civil investigative demand, 
such person may file, in the district court of the United 
States for the judicial district within which the office of 
such custodian is situated, and serve upon such custodian, a 
petition for an order of such court requiring the performance 
by such custodian of any duty imposed upon him by this section 
or section 21.
  (h) Whenever any petition is filed in any district court of 
the United States under this section, such court shall have 
jurisdiction to hear and determine the matter so presented, and 
to enter such order or orders as may be required to carry into 
effect the provisions of this section. Any final order so 
entered shall be subject to appeal pursuant to section 1291 of 
title 28, United States Code. Any disobedience of any final 
order entered under this section by any court shall be punished 
as a contempt of such court.
  (i) Notwithstanding any other provision of law, the 
Commission shall have no authority to issue a subpoena or make 
a demand for information, under authority of this Act or any 
other provision of law, unless such subpoena or demand for 
information is signed by a Commissioner acting pursuant to a 
Commission resolution. The Commission shall not delegate the 
power conferred by this section to sign subpoenas or demands 
for information to any other person.
  (j) Termination of Inactive Investigation.--
          (1) In general.--Except as provided in paragraph (2), 
        a covered investigation shall terminate at the 
        expiration of the six-month period beginning on the 
        date on which a covered verifiable written 
        communication is sent by the Commission.
          (2) Exception.--Paragraph (1) does not apply if--
                  (A) an additional covered verifiable written 
                communication is sent by the Commission during 
                the period described in paragraph (1);
                  (B) the Commission votes to extend the 
                covered investigation before the expiration of 
                such period; or
                  (C) the Commission determines in a vote, 
                within 30 days after the expiration of such 
                period, that the Commission did not send a 
                covered verifiable written communication during 
                such period because of excusable neglect or a 
                circumstance beyond the control of the 
                Commission that rendered notification during 
                such period impossible.
          (3) Definitions.--In this subsection:
                  (A) Covered investigation.--The term 
                ``covered investigation'' means an 
                investigation conducted pursuant to this 
                section in which the Commission has notified 
                the person, partnership, or corporation that is 
                the subject of the investigation by verifiable 
                written communication.
                  (B) Covered verifiable written 
                communication.--The term ``covered verifiable 
                written communication'' means a verifiable 
                written communication relating to an 
                investigation conducted pursuant to this 
                section that is sent to the person, 
                partnership, or corporation that is the subject 
                of the investigation.
  [(j)] (k) The provisions of this section shall not--
          (1) apply to any proceeding under section 5(b), any 
        proceeding under section 11(b) of the Clayton Act (15 
        U.S.C. 21(b)), or any adjudicative proceeding under any 
        other provision of law; or
          (2) apply to or affect the jurisdiction, duties, or 
        powers of any agency of the Federal Government, other 
        than the Commission.

           *       *       *       *       *       *       *


SEC. 27. NONPUBLIC COLLABORATIVE DISCUSSIONS.

  (a) In General.--Notwithstanding section 552b of title 5, 
United States Code, a bipartisan majority of Commissioners may 
hold a meeting that is closed to the public to discuss official 
business if--
          (1) a vote or any other agency action is not taken at 
        such meeting;
          (2) each person present at such meeting is a 
        Commissioner or an employee of the Commission; and
          (3) an attorney from the Office of General Counsel of 
        the Commission is present at such meeting.
  (b) Disclosure of Nonpublic Collaborative Discussions.--Not 
later than 2 business days after the conclusion of a meeting 
held under subsection (a), the Commission shall publish on its 
Internet website a disclosure of such meeting, including--
          (1) a list of the persons who attended such meeting; 
        and
          (2) a summary of the matters discussed at such 
        meeting, except for such matters as the Commission 
        determines may be withheld under section 552b(c) of 
        title 5, United States Code.
  (c) Preservation of Open Meetings Requirements for Agency 
Action.--Nothing in this section shall alter or supersede 
section 552b of title 5, United States Code, with respect to 
any meeting of Commissioners other than a meeting held under 
subsection (a).
  (d) Definitions.--In this section:
          (1) Agency action.--The term ``agency action'' has 
        the meaning given such term in section 551 of title 5, 
        United States Code.
          (2) Bipartisan majority.--The term ``bipartisan 
        majority'' means, when used with respect to a group of 
        Commissioners, that such group--
                  (A) is a group of two or more Commissioners; 
                and
                  (B) includes, for each political party of 
                which any Commissioner is a member, at least 1 
                Commissioner who is a member of such political 
                party, and, if any Commissioner has no 
                political party affiliation, at least 1 
                unaffiliated Commissioner.

SEC. 28. ANNUAL PLAN REQUIRED.

  Not later than December 1 of each year, the Commission shall 
publish and submit to the Committees on the Judiciary and 
Commerce, Science, and Transportation of the Senate and the 
Committees on the Judiciary and Energy and Commerce of the 
House of Representatives a plan for the next calendar year 
describing the projected activities of the Commission, 
including each of the following:
          (1) The policy priorities of the Commission.
          (2) Any rulemakings projected to be commenced.
          (3) Any plans to develop guidelines or other non-
        regulatory guidance documents.
          (4) Any plans to restructure the Commission or 
        establish or alter working groups.
          (5) Any planned projects or initiatives of the 
        Commission, including workshops, conferences, and 
        reports.
          (6) With respect to any activities of the Commission, 
        including workshops, conferences, reports, working 
        groups, guidance documents, or rulemakings, that relate 
        specifically to combating unfair or deceptive acts or 
        practices that target or significantly affect 
        individuals who are 65 years of age or older, a 
        description of how such activities will address such 
        acts or practices.
          (7) Projected dates and timelines associated with any 
        of the required disclosures in this section.

SEC. 29. REPORT ON ELDER FRAUD REQUIRED.

  Not later than January 31 of each year, the Commission shall 
publish and submit to the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Energy and 
Commerce of the House of Representatives a report on the 
Commission's enforcement actions to address unfair or deceptive 
acts or practices that may have targeted or significantly 
affected individuals who are 65 years of age or older during 
the previous calendar year, including each of the following:
          (1) A brief description of each such enforcement 
        action.
          (2) The disposition of such enforcement actions, 
        broken down by category.
          (3) The proportion of such enforcement actions as a 
        percentage of all enforcement actions relating to 
        unfair or deceptive acts or practices in or affecting 
        commerce brought by the Commission.
  Sec. [28.] 30. This Act may be cited as the ``Federal Trade 
Commission Act''.

                            DISSENTING VIEWS

    We cannot support H.R. 5510, FTC Process and Transparency 
Reform Act of 2016, as reported by the Committee on Energy and 
Commerce on July 14, 2016. This bill is a systematic attempt to 
dismantle the primary agency, the Federal Trade Commission, 
responsible for protecting consumers from unscrupulous actors 
in the marketplace.
    Our views on specific provisions in H.R. 5510 and the 
Committee's consideration of the bill are set forth below.

                       I. H.R. 5510, as Reported

    This bill contravenes the FTC's consumer protection 
mission. This bill pits the interests of industry against the 
interests of consumers, and under the bill consumers lose. But 
it does not have to be one or the other. Consumer protection 
and innovation can and should go hand-in-hand.
    Section two of the bill codifies select portions of the 
FTC's unfairness statement, which was published in 1980. But 
the portions that would be codified in section two would make 
it very difficult for the FTC to continue helping consumers by 
preventing harms. The core of FTC's mission is laid out in 
Section 5 of the FTC Act, which states that the Commission is 
empowered and directed to prevent the use of unfair methods of 
competition and unfair or deceptive acts or practices. But this 
bill would obliterate that statutory directive and needlessly 
put consumers at risk. Rather than provide more clarity, this 
bill would shake up the system by essentially throwing out more 
than 30 years' worth of experience with the standard as it is.
    Section three of the bill would place an eight year cap on 
consent decrees used in FTC's consumer protection enforcement 
actions and requires review of FTC consent decrees after five 
years in most cases. Currently, most consent decrees, or 
portions thereof, are generally in place for 20 years. Instead 
of settling cases through consent decrees negotiated between 
the FTC and a company, this time limit may lead to more cases 
going to court where the penalties imposed on a company could 
be much harsher. Moreover, since the FTC cannot impose 
financial penalties unless that bad actor is under a consent 
decree, this provision ultimately harms consumers by limiting 
the Commission's ability to prevent repeat offenses.
    Section four of the bill would require FTC to submit an 
annual report to Congress that includes the number of 
investigations begun, the number of investigations closed with 
no official action, the disposition of investigations that have 
resulted in official action and, for each investigation that 
closed without action, an explanation of the legal analysis 
supporting the agency's decision to close the investigation. 
For each investigation summarized, FTC would be required to 
notify each party that had been investigated and obtain that 
party's consent to the inclusion of a description of the 
investigation in the report. This report is a waste of 
Commission resources that would harm consumers without much 
benefit to industry. FTC cannot pursue investigations of all 
the allegations of unfair or deceptive practices it receives. 
The Commission must prioritize which investigations to continue 
based on a number of factors, such as emerging trends or lack 
of resources. Those explanations do nothing to help businesses 
reading these reports make better decisions about their 
business practices. At the same time, the report forces the 
Commission to redirect resources from protecting consumers to 
completing the report, leaving consumers at risk.
    Section five of the bill would require the inclusion of an 
economic analysis for any legislative or regulatory 
recommendations made by FTC, or a statement that no economic 
analysis was conducted. This section also includes certain 
exceptions to the requirement. This provision is clearly not 
intended to increase the role of the Bureau of Economics or to 
ensure that more thought is given to the costs of agency 
actions. The economic analysis requirement applies to 
recommendations the FTC makes to others, not to actions taken 
by the FTC itself. It is a waste of time and resources with no 
benefit.
    Moreover, the Commission legislative recommendations are 
most often made to Congress, and the Commission rarely provides 
completely unsolicited advice to Congress anyway. Regardless, 
the bill specifically exempts recommendations to Congress from 
this provision further proving this provision has no positive 
value.
    Section six of the bill would prohibit FTC from basing any 
enforcement action on guidelines. The FTC does not use guidance 
in place of statutes in the first place, so that portion of 
this provision is wholly unnecessary. In addition, section six 
allows companies to use compliance with FTC guidelines as 
evidence of compliance with a statute. As the majority 
recognizes, nonbinding guidelines are not the same as laws. Yet 
this bill allows companies to evade accountability by showing 
that they complied with the same nonbinding guidance instead of 
having to prove that they complied with actual law, even if the 
guidance used is outdated, superseded by updated guidance, or 
otherwise inapplicable. Moreover, these companies would not 
have to prove that they relied on the guidance at the time they 
violated the law. In fact, they do not even have to show they 
knew about the guidance. It allows them instead to try to 
justify their actions after the fact by finding any one-off 
statement or comment to argue that they are not liable. This 
provision may result in the Commission issuing less guidance, 
which would harm companies trying to comply with the law.
    Section seven of the bill would require that an FTC 
investigation, in which the person or entity being investigated 
has been notified of the existence of the investigation, be 
automatically terminated after six months if there is no 
communication to the person being investigated, unless FTC 
votes to extend the investigation. The commission may also vote 
to extend the investigation within 30 days after the six-month 
time limit runs, if it determines that the expiration of the 
time was due to excusable neglect or a circumstance beyond the 
control of the commission. This provision is a solution in 
search of a problem. This busy work for the agency could harm 
businesses by reminding the public that they are still under 
investigation. Also, when investigations do take longer than 
normal, the targets of the investigations can be the cause of 
delays in investigations. Additionally, it will harm consumers 
by hampering the FTC's ability to reprioritize their 
investigations in the event of more immediate harms. For 
example, after natural disasters, such as Hurricane Katrina, 
scammers and fraudsters come out of the woodwork to prey on 
consumers in times they are most vulnerable. By automatically 
closing cases after six months, this provision prevents the FTC 
from putting some investigations on hold to address these 
emergency situations.
    Section eight of the bill would allow a bipartisan majority 
of commissioners to hold a meeting that is closed to the public 
to discuss official business if: (1) no agency action is taken, 
(2) each person present is an FTC commissioner or employee, and 
(3) an attorney from the Office of General Counsel is present. 
Contrary to the name of this bill, section eight could reduce 
transparency. This provision would exclude the FTC from a 
government transparency law, written in 1976, applying to all 
commissions. Congress may not want to carve out one agency from 
an open government law that applies to all government 
commissions until it can consider how such a change in law 
affects all of the other commissions.
    Section nine of the bill would require FTC to publish an 
annual plan of its projected activities for the year. It would 
also require a separate report on enforcement actions involving 
elder fraud for the previous calendar year. This section may 
seem innocuous, but the Commission expressed its concerns about 
being held to the specifics of the report and not being able to 
stay flexible and adapt quickly. FTC must be able to turn on a 
dime and attack new creative ways scammers try to deceive 
consumers. Moreover, the annual report on senior fraud seems 
intended to pressure the FTC to focus its enforcement on cases 
that affect seniors only, not the population as a whole, 
including cases regarding data security and data breaches. The 
Commission testified at the hearing of the Subcommittee on 
Commerce, Manufacturing, and Trade that ``older Americans are 
not necessarily defrauded at higher rates than younger 
consumers''' but that . . . ``certain types of scams are more 
likely to impact older Americans, such as scams related to 
health care.'' FTC should be able to have the freedom and 
flexibility to protect seniors as well as all Americans from 
unfair or deceptive acts or practices.
    H.R. 5510 does not promote innovation. Instead, it makes 
consumers less confident that they are being protected and 
therefore less likely to trust the newest technologies. This 
bill would strip the FTC of even its limited authorities.

                      II. Committee Consideration

                 A. AMENDMENTS OFFERED IN SUBCOMMITTEE

    The Subcommittee on Commerce, Manufacturing, and Trade held 
a markup of the discussion draft of the bill on June 8-9, 2016. 
During consideration of the discussion draft, Representative 
Burgess (R-TX) offered an amendment in the nature of a 
substitute, to which three amendments were offered by 
Democratic members.
    Representative Butterfield (D-NC) offered an amendment that 
created an exception to the economic analysis requirement of 
the bill for recommendations requested by and submitted to 
members of Congress. The amendment was adopted by a voice vote.
    Representative Yvette Clarke (D-NY) offered and withdrew an 
amendment that would have created an exception to the bill's 
eight-year cap on consent decrees for enforcement cases 
relating to unfair or deceptive practices affecting seniors. 
The majority committed to work with Representative Clarke on 
her amendment at full committee markup.
    Representative Schakowsky (D-IL) offered an amendment 
creating an exception to the requirement that FTC prove 
concrete harm in data security and privacy cases, including 
cases against companies that monitor users through internet-
connected cameras without disclosure to the user. The amendment 
was rejected along party lines by a vote of 12-8.
    Representative Burgess's amendment in the nature of a 
substitute, as amended by the Butterfield amendment, was 
adopted by voice vote. Ultimately, the bill was favorably 
reported out of the subcommittee by a vote of 12 to 8, with no 
Democratic members supporting final passage.

                B. AMENDMENTS OFFERED IN FULL COMMITTEE

    On Jul 12-14, 2016, the full Committee on Energy and 
Commerce considered H.R. 5510, FTC Process and Transparency 
Reform Act of 2016. Three amendments were adopted at Full 
Committee markup. Representative Burgess offered an amendment 
that made technical changes to section five of the bill, which 
requires an economic analysis for legislative and regulatory 
recommendations submitted by the Commission. Representative 
Butterfield (D-NC) offered an amendment that created an 
exception to the economic analysis requirement for FTC comments 
to other federal agencies. Representative Tonko (D-NY) offered 
an amendment that created an exception to the economic analysis 
requirement for recommendations made to the European Union, its 
member countries, and the United Kingdom.
    In addition, seven amendments were offered by minority 
members, which were voted down along party lines. 
Representative McNerney (D-CA) offered an amendment that would 
have lifted the common carrier exemption that currently limits 
FTC's jurisdiction over communications companies subject to FCC 
jurisdiction. Ranking Member Pallone (D-NJ) offered an 
amendment that would have given FTC authority to promulgate 
rules in accordance with the Administrative Procedure Act 
regarding consumer privacy and data security. These amendments 
would have given the Commission the ability to ensure that 
consumers across the internet are adequately protected with 
regard to privacy and data security.
    An amendment offered by Representative Rush (D-IL) would 
have lifted the non-profit exemption that currently limits 
FTC's ability to pursue unfair and deceptive practices by 
nonprofits and sham charities. As with the amendments offered 
by Ranking Member Pallone and Representative McNerney, this 
amendment would have expanded the Commission's authority to 
protect consumers from unfair and deceptive acts and practices.
    Representative Schakowsky (D-IL) offered an amendment that 
would have created an exception to the requirement in section 
two of the bill that FTC prove a concrete harm for data 
security and privacy cases, including peeping tom cases. 
Representative McNerney offered another amendment, which would 
have created an exception to the eight-year cap on consent 
decrees for unfair or deceptive practices that affect veterans 
Representative Yvette Clarke (D-NY) offered an amendment, which 
would have created an exception to the eight-year cap on 
consent decrees for unfair or deceptive practices that affect 
minorities. Representative Kennedy (D-MA) offered an amendment 
intended to preserve the Commission's authority to act in the 
interest of consumers.
    The bill was favorably reported out of the committee by a 
vote of 30-20, basically on party lines.
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.

                                   Frank Pallone, Jr.,
                                           Ranking Member.
                                   Jan Schakowsky,
                                           Ranking Member, Subcommittee 
                                               on Commerce, 
                                               Manufacturing, and 
                                               Trade.

                                  [all]