U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

19–010

" SENATE ! 108TH CONGRESS

1st Session

REPORT

2003

108–127

Calendar No. 251

THE FEDERAL TRADE COMMISSION 

REAUTHORIZATION ACT OF 2003

REPORT

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION

ON

S. 1234

AUGUST 26, 2003.—Ordered to be printed

Filed, under authority of the order of the Senate of July 29 (legislative 

day, July 21), 2003


congress.#13
(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

JOHN MCCAIN, Arizona, Chairman 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

SAM BROWNBACK, Kansas 

GORDON SMITH, Oregon 

PETER G. FITZGERALD, Illinois 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

ERNEST F. HOLLINGS, South Carolina 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK LAUTENBERG, New Jersey 

JEANNE BUMPUS, Staff Director and General Counsel 

ANN BEGEMAN, Deputy Staff Director 

ROBERT W. CHAMBERLIN, Chief Counsel 

KEVIN D. KAYES, Democratic Staff Director and Chief Counsel 

GREGG ELIAS, Democratic General Counsel 

Calendar No. 251

108TH CONGRESS REPORT " SENATE ! 1st Session 108–127

THE FEDERAL TRADE COMMISSION REAUTHORIZATION 

ACT OF 2003

AUGUST 26, 2003.—Ordered to be printed

Filed, under authority of the order of the Senate of July 29 (legislative day, July 

21), 2003

Mr. MCCAIN, from the Committee on Commerce, Science, and 

Transportation, submitted the following 

R E P O R T 

[To accompany S. 1234]

The Committee on Commerce, Science, and Transportation, to 

which was referred the bill (S. 1234) ‘‘a bill to reauthorize the Federal Trade Commission, and for other purposes’’, having considered 

the same, reports favorably thereon with an amendment in the nature of a substitute and recommends that the bill as amended do 

pass. 

PURPOSE OF THE BILL

S. 1234 would amend the Federal Trade Commission Act (FTCA) 

(15 U.S.C. 41 et seq.) to carry out the functions, powers, and duties 

of the Federal Trade Commission (FTC or Commission). The bill 

would authorize funding levels to be appropriated for fiscal years 

2004 through 2007, as well as authorize the FTC to accept both reimbursement from other agencies that may seek the Commission’s 

assistance, and gifts that do not create a conflict of interest. The 

bill also would improve the Commission’s ability to provide more 

timely and effective international consumer protection. 

BACKGROUND AND NEEDS

The FTC is an independent Federal agency established by statute in 1914 to protect American consumers. The Commission’s 

mandate has two distinct provisions: first, to protect consumers 

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from unfair or deceptive acts or practices in or affecting commerce, 

and second, to protect consumers from unfair methods of competition. The agency enforces 46 statutes and is the only Federal agency with both consumer protection and competition jurisdiction in 

broad sectors of the economy. 

The Commission is comprised of five members appointed for 

seven-year terms by the President, with the advice and consent of 

the Senate. Under the FTCA, no more than three commissioners 

may be from the same political party. Currently, the Commission 

is comprised of three Republican commissioners, Chairman Timothy Muris, and Commissioners Orson Swindle and Thomas Leary; 

and two Democratic commissioners, Sheila Anthony and Mozelle 

Thompson. 

The FTC employs approximately 1074 full-time employees located in Washington, D.C., and throughout seven regional offices 

located in Seattle, San Francisco, Los Angeles, Dallas, Chicago, Atlanta, and New York. The Commission is divided into three bureaus: Consumer Protection (BCP), Competition (BC), and Economics (BE). The directors of each bureau are appointed by the Chairman of the FTC and report directly to him/her. The FTC also has 

an Office of Public Affairs; Office of Congressional Relations; Office 

of the General Counsel; Office of the Secretary; Executive Director; 

Consumer and Business Education Office; and Office of Policy and 

Planning. 

The FTC has been unauthorized since 1998 (P.L. 104–216). S. 

1234 would authorize funding for the Commission for fiscal years 

2004 through 2007. The bill also would allow the FTC to accept reimbursement for services undertaken on behalf of any domestic or 

foreign law enforcement agency. FTC staff members occasionally 

provide investigative or other services to a requesting law enforcement agency with no expectation that the Commission will be reimbursed for any expenses incurred. The FTC also may work in conjunction with staff of other law enforcement agencies to investigate 

or prosecute a matter. Thus, the Commission has requested authority to accept reimbursement if offered. Such authority would be 

useful in instances where expense-sharing arrangements have not 

been resolved in advance. The Securities Exchange Act of 1934 provides similar authority to the Securities and Exchange Commission. 

The bill also would authorize the FTC to accept gifts and services 

under certain circumstances. Occasionally, the Commission is offered gifts, donations, bequests, and volunteer services, but such receipt is prohibited by law. For example, volunteer services are prohibited, as is the acceptance of even a trade regulation publication 

that might be useful in the Commission’s library. In order to legally accept such gifts or other items, the Commission would need 

to receive statutory authority. The Federal Communications Commission (FCC) and the Consumer Product Safety Commission 

(CPSC) have similar authority to accept gifts and services. 

As part of the FTC’s reauthorization, the Commission has proposed legislative changes to the FTCA seeking authorization to expand its authority under section 5 of the FTCA to protect consumers from fraudulent and deceptive trade practices perpetrated 

abroad. This request was not part of the reauthorization bill that 

was reported by the Commerce Committee in 2002. 

3

1See Memorandum from FTC to United States Senate Committee on Commerce, Science, and 

Transportation, dated April 23, 2003—in which the FTC states: ‘‘We think it is [ ] critical to 

address [statutory] challenges promptly with certain legislative amendments, especially in the 

areas of information sharing, mutual assistance, and joint action. Our ability to share more information would help foreign enforcers in their investigations that benefit United States consumers. Providing assistance where foreign consumers are victimized by United States businesses helps to protect the integrity of our markets, and also encourages reciprocity from our 

foreign counterparts. The approach to mutual assistance needed now for consumer protection 

enforcement is similar to that already developed for anti-trust, securities, commodity futures, 

and other enforcement areas.’’

The FTC argues that cross-border consumer complaints registered in the Commission’s computer database (i.e., the Consumer 

Sentinel consumer complaint database) have risen from 11 percent 

of all complaints received in 2000, to 14 percent in 2002. The Commission attributes this increase primarily to the global proliferation 

of the Internet and improvements in telecommunications technologies. According to the FTC, the Commission’s existing legal 

framework poses challenges in combating this cross-border activity.1

According to the FTC, the Commission’s cross-border fraud language, which is contained in S. 1234, is the product of negotiations 

between the FTC and various other governmental entities including, among others, the Department of Justice (DOJ), the Department of State, the Federal Deposit Insurance Corporation (FDIC), 

and the Federal Reserve, that took place to properly define the 

scope of the FTC’s jurisdiction vis-a-vis the functions of those agencies. 

SUMMARY OF PROVISIONS

S. 1234 would amend the FTCA to authorize the FTC to: (1) receive specified levels of funding to be appropriated for fiscal years 

2004 through 2007; (2) provide investigative and other services to 

a requesting law enforcement agency and accept payment of reimbursement from that agency for the Commission’s involvement; (3) 

receive gifts or other items that would be useful to the Commission 

as long as a conflict of interest is not created by such receipt; (4) 

share information involving cross-border fraud with foreign consumer protection agencies; (5) secure confidential information from 

those foreign consumer protection agencies; (6) take fraud-based 

legal action in foreign jurisdictions; (7) seek redress on behalf of 

foreign consumers victimized by United States-based wrongdoers; 

(8) make criminal referrals for cross-border criminal activity; and 

(9) strengthen its relationship with foreign consumer protection 

agencies. 

LEGISLATIVE HISTORY

The FTC was last reauthorized in 1996 when funding was authorized for fiscal years 1997 and 1998. Prior to the 1996 reauthorization, the Commission remained unauthorized from 1982 to 1994 

due largely to concerns over the application of the ‘‘unfairness doctrine’’ to advertising cases. The Commission had undertaken a rulemaking process with respect to children’s advertising and, according to some, was attempting to use the ‘‘unfairness’’ standard too 

broadly. That resulted in the enactment of the 1980 FTC Improvements Act, which imposed a moratorium on ‘‘unfairness’’

rulemakings through fiscal year (FY) 1982. 

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2See 15 U.S.C. 45. 

During the 103rd Congress, a reauthorization bill was reported 

by the Senate Committee on Commerce, Science, and Transportation (the Committee) after members agreed to limit the Commission’s potential for broad rulemaking with respect to ‘‘unfairness’’ interpretations. The legislation (P.L. 103–312) amended section 5 of 

the FTCA by defining an act or practice as unfair only if ‘‘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 

competition’’.2

During the 106th Congress, the Senate proposed a bill to reauthorize the FTC (S. 1687), and the Subcommittee on Consumer Affairs held a hearing in February 2000. The Committee reported the 

bill to the full Senate, and the bill was passed with amendments. 

However, the House failed to act on the legislation. The Senate bill 

included, among other things, provisions for amending the merger 

review process under the Hart-Scott-Rodino Act. These provisions 

were later passed as part of the Commerce-Justice-State Appropriations Act for FY 2001. 

During the 107th Congress, the Consumer Affairs Subcommittee 

held an oversight hearing on the FTC on July 17, 2002, at which 

the full Commission and consumer and industry representatives 

testified. Subsequent to the subcommittee hearing, Chairman Hollings and Senator Dorgan introduced the Federal Trade Commission Reauthorization Act of 2002 (S. 2946). The Committee considered S. 2946 during an executive session on September 19, 2002, 

and reported the measure by a vote of 16 to seven. This bill was 

placed on the Senate legislative calendar on November 19, 2002, 

but the Senate did not consider the bill before the end of the Congress. 

During the 108th Congress, the Competition, Foreign Commerce, 

and Infrastructure Subcommittee held a hearing on June 11, 2003, 

to examine possible changes to the FTCA and discuss key issues 

before the FTC. The following witnesses appeared before the Subcommittee at the hearing: FTC Chairman Timothy Muris; FTC 

Commissioners Thompson, Swindle, and Leary; Lawrence Sarjeant, 

Vice President of Law at the United States Telecom Association 

(USTA); Sarah Deutsch, Vice President and Associate General 

Counsel at Verizon Communications; Susan Grant, Director of the 

National Fraud Information/Internet Fraud Watch for the National 

Consumers League; Scott Cooper, Manager of Technology Policy for 

Hewlett-Packard; Marc Rotenberg, Executive Director of the Electronic Privacy Information Center (EPIC); and Ari Schwartz, Associate Director for the Center for Democracy and Technology. On 

June 10, 2003, Senators McCain and Smith introduced S. 1234, the 

Federal Trade Commission Reauthorization Act of 2003. 

On June 19, 2003, the Committee met in open executive session 

to consider an amendment in the nature of a substitute to S. 1234 

offered by Senators McCain and Smith. The Committee agreed to 

incorporate in the substitute amendment language that was offered 

as an amendment by Senator Smith requiring the FTC to educate 

consumers concerning the possible risks associated with peer-topeer file sharing technology. The substitute amendment was adoptVerDate jul 14 2003 09:25 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6601 E:\HR\OC\SR127.XXX SR127
5

ed, and the bill was ordered to be reported as amended by voice 

vote. 

ESTIMATED COSTS

In accordance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate and section 403 of the Congressional Budget 

Act of 1974, the Committee provides the following cost estimate, 

prepared by the Congressional Budget Office:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 9, 2003. 

Hon. JOHN MCCAIN, Chairman, Committee on Commerce, Science, and Transportation, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1234, the Federal Trade 

Commission Reauthorization Act of 2003. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Melissa E. Zimmerman. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, Director. 

Enclosure. 

S. 1234—Federal Trade Commission Reauthorization Act of 2003

Summary: S. 1234 would authorize the appropriation of $900 

million for the Federal Trade Commission (FTC) over the 2004–

2007 period, including up to $100,000 a year to support activities 

of certain international law enforcement groups. Because S. 1234 

would allow the FTC to accept and spend monetary gifts, CBO estimates that the bill would have a negligible effect on revenues and 

direct spending. 

Assuming appropriation of the amounts specified in S. 1234, 

CBO estimates that implementing the bill would cost $179 million 

in 2004 and $900 million over the 2004–2008 period. Most of this 

spending would likely be offset, however, by fees authorized to be 

collected under current law for reviewing certain mergers and for 

administering a national ‘‘do-not-call’’ registry. Assuming future appropriation acts allow the FTC to continue to collect those fees, 

CBO estimates that net FTC spending from the amounts authorized by S. 1234 would be $49 million in 2004 and $340 million over 

the 2004–2008 period. 

S. 1234 would preempt state and local laws that require notice 

to third parties when certain information relating to them is disclosed to the FTC. Such preemptions are intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA), 

but CBO estimates that the costs of the mandates would not exceed 

the threshold established in UMRA ($59 million in 2003, adjusted 

for inflation). 

In addition, S. 1234 would exempt from liability those entities 

that provide certain information on third parties to the FTC. To 

the extent that the bill limits the ability of a third party to sue 

under current law, S. 1234 would impose a private-sector mandate. 

CBO expects the costs to the private sector would be minimal, fallVerDate jul 14 2003 09:25 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\SR127.XXX SR127
6

ing well below the annual threshold for private-sector mandates established in UMRA ($117 million in 2003, adjusted annually for inflation).

Estimated cost to the Federal Government: The estimated budgetary impact of S. 1234 is shown in the following table. The costs 

of this legislation fall within budget function 370 (commerce and 

housing credit).

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Gross FEC Spending From Authorizations in S. 1234: 

Authorization Level ........................................................... 195 225 236 245 0

Estimated Outlays 1 .......................................................... 179 222 235 244 20

Less: Offsetting Collection 2: 

Estimated Authorization Level ......................................... ¥130 ¥136 ¥144 ¥150 0

Estimated Outlays ............................................................ ¥130 ¥136 ¥144 ¥150 0

Net FTC Spending From Authorizations in S. 1234: 

Estimated Authorization Level ......................................... 65 89 92 95 0

Estimated Outlays 1 .......................................................... 49 86 91 94 20

1 In addition to the sums shown in the table, outlays for fiscal year 2004 would also include $14 million from the FTC’s 2003 appropriation. 2 The FTC is authorized to collect fees that outset the agency’s annual appropriations. The amount collected is not dependent on the 

amount appropriated. 

Basis of estimate: S. 1234 would authorize the appropriation of 

$900 million for the FTC over the 2004–2007 period, starting at 

$195 million for 2004 and growing to $245 million for 2007. (The 

appropriation for 2003 is $177 million.) Based on the agency’s historical spending patterns, CBO estimates that outlays from such 

appropriations would total $179 million in 2004 and $900 million 

over the 2004–2008 period. 

The gross spending of the FTC is typically offset by fees the 

agency collects for reviewing mergers and for administering the national ‘‘do-not-call’’ registry. The amount collected is not dependent 

on the amount appropriated to the FTC. CBO estimates that collections from those fees would total $560 million over the 2004–2007 

period, assuming that future appropriation acts continue to authorize the agency to collect such fees. If the FTC collects those 

amounts, we estimate that net FTC spending from the amounts authorized by S. 1234 would be $49 million in 2004 and $340 million 

over the 2004–2008 period. 

Intergovernmental and private-sector impact: Title II would authorize the FTC to request that a judge order the recipient of a 

summons, subpoena, or other compulsory process to delay giving 

notice to any one that they have been required to appear as a witness before, or to produce documents in, an FTC proceeding. The 

order could be issued, notwithstanding any state or local laws or 

regulations, if there is reason to believe that notification would 

cause certain adverse results. Further, the recipient would not be 

liable under any state or local laws or regulations for disclosing information or for failure to provide notice. The title also would protect certain entities that voluntarily provide specified material to 

the FTC from liability under any state or local law or regulation 

that precludes disclosure of information or requires notification to 

an interested third party. 

To the extent that state and local governments have laws that 

contradict those provisions in title II, the legislation would preempt 

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those laws and thereby impose intergovernmental mandates under 

UMRA. CBO estimates that the cost of those mandates would be 

minimal and would not exceed the threshold established in UMRA 

($59 million in 2003, adjusted for inflation). 

In addition, by exempting from liability entities that provide information about third parties to the FTC, S. 1234 would limit the 

ability of the third parties to sue for the disclosure or for failure 

to provide notice of disclosure. Such a limitation would constitute 

a private-sector mandate under UMRA. According to the FTC, few 

third-party lawsuits are filed because entities do not voluntarily 

provide information to the FTC due to their potential exposure to 

liability. Therefore, CBO expects minimal costs would accrue to the 

private sector as a result of the mandate. 

Estimate prepared by: Federal Costs: Melissa E. Zimmerman; 

Impact on State, Local, and Tribal Governments: Victoria Heid 

Hall; Impact on the Private Sector: Lauren Marks. 

Estimate approved by: Robert A. Sunshine, Assistant Director for 

Budget Analysis.

REGULATORY IMPACT STATEMENT

In accordance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee provides the following evaluation of the regulatory impact of the legislation, as reported: 

NUMBER OF PERSONS COVERED

There is no significant change in the number of persons covered 

under the legislation. 

ECONOMIC IMPACT

The economic impact of this legislation would be minimal. 

PRIVACY

The impact on the personal privacy of the persons covered by 

this legislation is expected to be minimal. 

PAPERWORK

The impact on paperwork is difficult to determine prior to enactment. 

SECTION-BY-SECTION ANALYSIS

TITLE I—REAUTHORIZATION

Section 101. Reauthorization 

This section would amend section 25 of the FTCA to authorize 

appropriations to carry out the functions, powers, and duties of the 

FTC not to exceed $194,742,000 for FY 2004, $224,695,000 for FY 

2005, $235,457,000 for FY 2006, and $245,000,000 for FY 2007. 

Section 102. Authority to Accept Reimbursements, Gifts, and Voluntary and Uncompensated Services 

This section would amend sections 26 and 27 of the FTCA to authorize the FTC to accept reimbursement from other agencies for 

8

assistance provided in investigations or otherwise, and accept gifts 

that do not create a conflict of interest, respectively. 

Section 103. Peer-To-Peer File Sharing Risk Education 

This section would require the FTC, as part of its existing consumer education programs, to educate consumers concerning the 

potential risks to their privacy and personal security, as well as to 

educate consumers about potentially inappropriate behavior resulting from purposeful or accidental misuse of peer-to-peer file sharing technology. 

TITLE II—INTERNATIONAL CONSUMER PROTECTION

Section 201. Findings 

This section describes Congress’s findings that cross-border fraud 

is a growing international problem that affects American consumers and businesses. The proliferation of Internet and telecommunications technologies has accentuated the problem of such 

fraud. Increasingly, foreign consumers are affected. The Commission’s ability to obtain effective consumer fraud relief is impeded by 

its limited authority. Improving the Commission’s ability to share 

information with its foreign counterparts is expected to allow for 

more timely and effective consumer fraud relief. 

Section 202. Foreign Law Enforcement Agency Defined 

This section would amend section 4 of the FTCA to include the 

definition of ‘‘foreign law enforcement agency.’’

Section 203. Sharing Information With Foreign Law Enforcement 

Agencies 

This section would amend section 21(b)(6) of the FTCA to authorize the FTC to share information with other agencies and expand 

existing authority to share compelled or confidential information 

with foreign law enforcers in consumer protection cases. Currently, 

information that is confidential or that has been compelled cannot 

be shared with foreign law enforcement agencies without the consent of the entity submitting the information. 

Section 204. Obtaining Information for Foreign Law Enforcement 

Agencies 

This section would amend section 6 of the FTCA to authorize the 

FTC to conduct investigations and discovery on behalf of its foreign 

counterparts. 

Section 205. Information Supplied By and About Foreign Sources 

This section would amend section 21(f) of the FTCA to authorize 

the FTC to exempt from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) information received from foreign government agencies and consumer complaint information received 

from a non-governmental foreign source, if, in both instances, the 

person who submits information to the FTC requests that the information be kept confidential. The bill also would exempt information submitted to a reporting mechanism that is jointly sponsored 

with foreign consumer protection agencies (e.g., 

www.econsumer.gov). However, nothing in this section authorizes 

9

the Commission to withhold information from Congress or prevent 

it from complying with a court order. 

Section 206. Confidentiality and Delayed Notice of Process 

This section would create a new section 21A in the FTCA to authorize the FTC to provide delayed notice to suspected perpetrators 

of fraud (currently entitled to such notice under the Right to Financial Privacy Act (RFPA) (12 U.S.C. 3401 et seq.)) that the FTC is 

requesting information about them from financial institutions. 

Section 207. Protection for Voluntary Provision of Information 

This section would create a new section 21B in the FTCA to authorize the FTC to delay notice to individuals being investigated by 

allowing third parties to keep Civil Investigative Demands (CIDs) 

confidential notwithstanding Federal or State law. The FTC often 

obtains information when investigating fraud by issuing CIDs to 

third parties. This section also protects entities from liability under 

applicable Federal and State laws for voluntary disclosures they 

make to the FTC concerning consumer fraud, or concerning recovery of assets for consumer redress. 

Section 208. Information Sharing With Financial Regulators 

This section would amend section 1112(e) of the RFPA to allow 

the FTC to share appropriate information with financial and market regulators. 

Section 209. Representation in Foreign Litigation 

This section would amend section 16 of the FTCA to authorize 

the FTC to retain foreign counsel to assist the DOJ’s Office of Foreign Litigation in pursuing cases in foreign jurisdictions. 

Section 210. Availability of Remedies 

This section would amend section 5 of the FTCA to authorize the 

FTC to obtain redress from United States-based wrongdoers on behalf of foreign consumers based on conduct that takes place in the 

United States. 

Section 211. Criminal Referrals 

This section would amend section 6 of the FTCA, as amended by 

section 204 of this title, to authorize the FTC to make criminal referrals when violations of FTC law also violate a title 18 provision, 

such as wire fraud, mail fraud, or contempt. 

Section 212. Staff Exchanges 

This section would create a new section 25 of the FTCA to authorize the FTC to participate in foreign staff exchange programs, 

and to make and accept full or partial reimbursement in such exchanges. 

Section 213. Expenditures for Cooperative Arrangements 

This section would amend section 6 of the FTCA, as amended by 

section 211 of this title, to authorize funds not to exceed a total of 

$100,000 annually for costs of certain joint projects and bilateral 

and multilateral meetings. 

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ROLLCALL VOTES IN COMMITTEE

In accordance with paragraph 7(c) of rule XXVI of the Standing 

Rules of the Senate, the Committee provides the following description of the record votes during its consideration of S. 1234: 

Senator Lautenberg offered an amendment to prohibit cigarette 

manufacturers from making claims relating to nicotine and tar 

measurement levels set by the FTC. By rollcall vote of 11 yeas and 

12 nays, the substitute amendment was defeated.

YEAS—11 NAYS—12

Mr. Hollings Mr. Stevens 

Mr. Inouye1 Mr. Burns 

Mr. Rockfeller Mr. Lott 

Mr. Kerry1 Mrs. Hutchison 

Mr. Breaux Ms. Snowe1

Mr. Dorgan Mr. Brownback 

Mr. Wyden Mr. Smith 

Mrs. Boxer Mr. Fitzgerald1

Mr. Nelson Mr. Ensign 

Ms. Cantwell Mr. Allen 

Mr. Lautenberg Mr. Sununu 

Mr. McCain 1 By proxy 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, 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 material is printed in italic, existing law in which no change is proposed is shown in roman):

RIGHT TO FINANCIAL PRIVACY ACT

SEC. 112. USE OF INFORMATION. 

[12 U.S.C. 3412]

(a) TRANSFER OF FINANCIAL RECORDS TO OTHER AGENCIES OR

DEPARTMENTS; CERTIFICATION.—Financial records originally obtained pursuant to this title shall not be transferred to another 

agency or department unless the transferring agency or department certifies in writing that there is reason to believe that the 

records are relevant to a legitimate law enforcement inquiry, or intelligence or counterintelligence activity, investigation or analysis 

related to international terrorism within the jurisdiction of the receiving agency or department. 

(b) MAILING OF COPY OF CERTIFICATION AND NOTICE TO CUSTOMER.—When financial records subject to this title are transferred 

pursuant to subsection (a), the transferring agency or department 

shall, within fourteen days, send to the customer a copy of the certification made pursuant to subsection (a) and the following notice, 

which shall state the nature of the law enforcement inquiry with 

reasonable specificity: ‘‘Copies of, or information contained in, your 

financial records lawfully in possession of ————— have been 

furnished to ————— pursuant to the Right of Financial Privacy 

Act of 1978 for the following purpose: —————. If you believe 

11

that this transfer has not been made to further a legitimate law 

enforcement inquiry, you may have legal rights under the Financial 

Privacy Act of 1978 or the Privacy Act of 1974.’’ (c) COURT-ORDERED DELAYS IN MAILING.—Notwithstanding subsection (b), notice to the customer may be delayed if the transferring agency or department has obtained a court order delaying notice pursuant to section 1109(a) and (b) and that order is still in 

effect, or if the receiving agency or department obtains a court 

order authorizing a delay in notice pursuant to section 1109(a) and 

(b). Upon the expiration of any such period of delay, the transferring agency or department shall serve to the customer the notice 

specified in subsection (b) above and the agency or department that 

obtained the court order authorizing a delay in notice pursuant to 

section 1109(a) and (b) shall serve to the customer the notice specified in section 1109(b). 

(d) EXCHANGES OF EXAMINATION REPORTS BY SUPERVISORY AGEN- CIES; TRANSFER OF FINANCIAL RECORDS TO DEFEND CUSTOMER AC- TION; WITHHOLDING OF INFORMATION.—Nothing in this title prohibits any supervisory agency from exchanging examination reports 

or other information with another supervisory agency. Nothing in 

this title prohibits the transfer of a customer’s financial records 

needed by counsel for a Government authority to defend an action 

brought by the customer. Nothing in this title shall authorize the 

withholding of information by any officer or employee of a supervisory agency from a duly authorized committee or subcommittee 

of the Congress. 

(e) FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL SU- PERVISORY AGENCIES; AUTHORIZATION OF EXCHANGE OF FINANCIAL

RECORDS OR OTHER INFORMATION.—Notwithstanding section 

1101(6) or any other provision of law, the exchange of financial 

records, examination reports or other information with respect to 

a financial institution, holding company, or any subsidiary of a depository institution or holding company, among and between the 

five member supervisory agencies of the Federal Financial Institutions Examination Council, the Securities and Exchange Commission, the Federal Trade Commission, and the Commodity Futures 

Trading Commission is permitted. 

(f) TRANSFER TO ATTORNEY GENERAL.— (1) IN GENERAL.—Nothing in this title shall apply when financial records obtained by an agency or department of the 

United States are disclosed or transferred to the Attorney General or the Secretary of the Treasury upon the certification by 

a supervisory level official of the transferring agency or department that— (A) there is reason to believe that the records may be 

relevant to a violation of Federal criminal law; and 

(B) the records were obtained in the exercise of the agency’s or department’s supervisory or regulatory functions. 

(2) LIMITATION ON USE.—Records so transferred shall be used 

only for criminal investigative or prosecutive purposes, for civil 

actions under section 951 of the Financial Institutions Reform, 

Recovery, and Enforcement Act of 1989, or for forfeiture under 

sections 981 or 982 of title 18, United States Code, by the Department of Justice and only for criminal investigative purposes relating to money laundering and other financial crimes 

12

by the Department of the Treasury and shall, upon completion 

of the investigation or prosecution (including any appeal), be 

returned only to the transferring agency or department. No 

agency or department so transferring such records shall be 

deemed to have waived any privilege applicable to those 

records under law. 

FEDERAL TRADE COMMISSION ACT 

SEC. 4. DEFINITIONS. 

[15 U.S.C. 44]

The words defined in this section shall have the following meaning when found in this Act, to wit: 

‘‘Commerce’’ means commerce among the several States or with 

foreign nations, or in any Territory of the United States or in the 

District of Columbia, or between any such Territory and another, 

or between any such Territory and any State or foreign nation, or 

between the District of Columbia and any State or Territory or foreign nation. 

‘‘Corporation’’ shall be deemed to include any company, trust, socalled Massachusetts trust, or association, incorporated or unincorporated, which is organized to carry on business for its own profit 

or that of its members, and has shares of capital or capital stock 

or certificates of interest, and any company, trust, so-called Massachusetts trust, or association, incorporated or unincorporated, without shares of capital or capital stock or certificates of interest, except partnerships, which is organized to carry on business for its 

own profit or that of its members. 

‘‘Documentary evidence’’ includes all documents, papers, correspondence, books of account, and financial and corporate records. 

‘‘Acts to regulate commerce’’ means the Act entitled ‘‘An Act to 

regulate commerce,’’ approved February 14, 1887, and all Acts 

amendatory thereof and supplementary thereto and the Communications Act of 1934 and all Acts amendatory thereof and supplementary thereto. 

‘‘Antitrust Acts’’ means the Act entitled ‘‘An Act to protect trade 

and commerce against unlawful restraints and monopolies,’’ approved July 2, 1890; also sections 73 to 76 inclusive, of an Act entitled ‘‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes,’’ approved August 27, 1894; also the 

Act entitled ‘‘An Act to amend sections 73 and 76, of the Act of August 27, 1894, entitled ‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes,’’’ approved February 12, 1913; and also the Act entitled ‘‘An Act to supplement existing laws against unlawful restraints and monopolies, and for 

other purposes,’’ approved October 15, 1914. 

‘‘Banks’’ means the types of banks and other financial institutions referred to in section 18(f)(2).

‘‘Foreign law enforcement agency’’ means—

(1) any agency or judicial authority of a foreign government, 

including a foreign state, a political subdivision of a foreign 

state, or a multinational organization constituted by and comprised of foreign states, that is vested with law enforcement or 

13

investigative authority in civil, criminal, or administrative matters; or 

(2) any multinational organization, to the extent that it is acting on behalf of an entity described in paragraph (1).

SEC. 5. UNFAIR METHODS OF COMPETITION UNLAWFUL; PREVENTION 

BY COMMISSION. 

[15 U.S.C. 45]

(a) DECLARATION OF UNLAWFULNESS; POWER TO PROHIBIT UNFAIR

PRACTICES; INAPPLICABILITY TO FOREIGN TRADE.—(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. 

(b) PROCEEDING BY COMMISSION; MODIFYING AND SETTING ASIDE

ORDERS.—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 

14

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 the service 

upon him or it of said report or order entered after such a reopening, obtain a review thereof in the appropriate 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) REVIEW OF ORDER; REHEARING.—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 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 

15

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) JURISDICTION OF COURT.—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) EXTENSION FROM LIABILITY.—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) SERVICE OF COMPLAINTS, ORDERS AND OTHER PROCESSES; RE- TURN.—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 by certified mail as aforesaid shall be proof of the service 

of the same. 

(g) FINALITY OF ORDER.—An order of the Commission to cease 

and desist shall become final—

16

(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) MODIFICATION OR SETTING ASIDE OF ORDER BY SUPREME

COURT.—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 

17

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) MODIFICATION OR SETTING ASIDE OF ORDER BY COURT OF AP- PEALS.—If the order of the Commission is modified or set aside by 

the 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 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) REHEARING UPON ORDER OR REMAND.—If the Supreme Court 

orders a rehearing; or if the case is remanded by the 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) ‘‘MANDATE’’ DEFINED.—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) PENALTY FOR VIOLATION OF ORDER; INJUNCTIONS AND OTHER

APPROPRIATE EQUITABLE RELIEF.—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) CIVIL ACTIONS FOR RECOVERY OF PENALTIES FOR KNOWING

VIOLATIONS OF RULES AND CEASE AND DESIST ORDERS RESPECTING

UNFAIR OR DECEPTIVE ACTS OR PRACTICES; JURISDICTION; MAX- IMUM AMOUNT OF PENALTIES; CONTINUING VIOLATIONS; DE NOVO

DETERMINATIONS; COMPROMISE OR SETTLEMENT PROCEDURE.—

(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 

18

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) 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) DEFINITION OF UNFAIR ACTS OR PRACTICES.—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.

(o) UNFAIR OR DECEPTIVE ACTS OR PRACTICES INVOLVING FOREIGN COMMERCE.—

19

(1) IN GENERAL.—For purposes of subsection (a), the term ‘‘unfair or deceptive acts or practices’’ includes such acts or 

practices involving foreign commerce that— (A) cause or are likely to cause reasonably foreseeable injury within the United States; or 

(B) involve material conduct occurring within the United 

States. 

(2) APPLICATION OF REMEDIES TO SUCH ACTS OR PRACTICES.— All remedies available to the Commission with respect to unfair 

and deceptive acts or practices shall be available for acts and 

practices described in paragraph (1), including restitution to 

domestic or foreign victims.

SEC. 6. ADDITIONAL POWERS OF COMMISSION. 

[15 U.S.C. 46]

The commission shall also have power— (1) INVESTIGATION OF PERSONS, PARTNERSHIPS, OR CORPORA- TIONS.—To gather and compile information concerning, and to 

investigate from time to time the organization, business, conduct, practices, and management of any person, partnership, or 

corporation engaged in or whose business affects commerce, excepting banks, savings and loan institutions described in section 18(f)(3), Federal credit unions described in section 18(f)(4), 

and common carriers subject to the Act to regulate commerce, 

and its relation to other persons, partnerships, and corporations. 

(2) REPORTS OF PERSONS, PARTNERSHIPS, AND CORPORA- TIONS.—To require, by general or special orders, persons, partnerships, and corporations engaged in or whose business affects commerce, excepting banks, savings and loan institutions 

described in section 18(f)(3), Federal credit unions described in 

section 18(f)(4), and common carriers subject to the Act to regulate commerce, or any class of them, or any of them, respectively, to file with the commission in such form as the commission may prescribe annual or special, or both annual and special, reports, or answers in writing to specific questions, furnishing to the commission such information as it may require 

as to the organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals of the respective persons, partnerships, and corporations filing such reports or answers in writing. Such reports 

and answers shall be made under oath, or otherwise, as the 

commission may prescribe, and shall be filed with the commission within such reasonable period as the commission may prescribe, unless additional time be granted in any case by the 

commission. 

(3) INVESTIGATION OF COMPLIANCE WITH ANTITRUST DE- CREES.—Whenever a final decree has been entered against any 

defendant corporation in any suit brought by the United States 

to prevent and restrain any violation of the antitrust Acts, to 

make investigation, upon its own initiative, of the manner in 

which the decree has been or is being carried out, and upon 

the application of the Attorney General it shall be its duty to 

make such investigation. It shall transmit to the Attorney General a report embodying its findings and recommendations as 

20

a result of any such investigation, and the report shall be 

made public in the discretion of the commission. 

(4) INVESTIGATIONS OF VIOLATIONS OF ANTITRUST STATUTES.— Upon the direction of the President or either House of Congress to investigate and report the facts relating to any alleged 

violations of the antitrust Acts by any corporation. 

(5) READJUSTMENT OF BUSINESS OF CORPORATIONS VIOLATING

ANTITRUST STATUTES.—Upon the application of the Attorney 

General to investigate and make recommendations for the readjustment of the business of any corporation alleged to be violating the antitrust Acts in order that the corporation may 

thereafter maintain its organization, management, and conduct 

of business in accordance with law. 

(6) PUBLICATION OF INFORMATION; REPORTS.—To make public 

from time to time such portions of the information obtained by 

it hereunder as are in the public interest; and to make annual 

and special reports to the Congress and to submit therewith 

recommendations for additional legislation; and to provide for 

the publication of its reports and decisions in such form and 

manner as may be best adapted for public information and use: 

Provided, That the Commission shall not have any authority to 

make public any trade secret or any commercial or financial information which is obtained from any person and which is 

privileged or confidential, except that the Commission may disclose such information (1) to officers and employees of appropriate Federal law enforcement agencies or to any officer or 

employee of any State law enforcement agency upon the prior 

certification of an officer of any such Federal or State law enforcement agency that such information will be maintained in 

confidence and will be used only for official law enforcement 

øpurposes.¿ purposes, and (2) to any officer or employee of any 

foreign law enforcement agency under the same circumstances 

that sharing material with foreign law enforcement agencies is 

permitted under section 21(b)(6) of this Act.

(7) CLASSIFICATION OF CORPORATIONS; REGULATIONS.—From 

time to time to classify corporations and (except as provided in 

section 18(a)(2) of this Act) to make rules and regulations for 

the purpose of carrying out the provisions of this Act. 

(8) INVESTIGATIONS OF FOREIGN TRADE CONDITIONS; RE- PORTS.—To investigate, from time to time, trade conditions in 

and with foreign countries where associations, combinations, or 

practices of manufacturers, merchants, or traders, or other conditions, may affect the foreign trade of the United States, and 

to report to Congress thereon, with such recommendations as 

it deems advisable. 

(9) With respect to the International Antitrust Enforcement 

Assistance Act of 1994, to conduct investigations of possible 

violations of foreign antitrust laws (as defined in section 12 of 

such Act). Provided, That the exception of ‘‘banks, savings and 

loan institutions described in section 18(f)(3), Federal credit 

unions described in section 18(f)(4), and common carriers subject to the Act to regulate commerce’’ from the Commission’s 

powers defined in clauses (a) and (b) of this section, shall not 

be construed to limit the Commission’s authority to gather and 

compile information, to investigate, or to require reports or anVerDate jul 14 2003 09:25 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00022 Fmt 6659 Sfmt 6601 E:\HR\OC\SR127.XXX SR127
21

swers from, any person, partnership, or corporation to the extent that such action is necessary to the investigation of any 

person, partnership, or corporation, group of persons, partnerships, or corporations, or industry which is not engaged or is 

engaged only incidentally in banking, in business as a savings 

and loan institution, in business as a Federal credit union, or 

in business as a common carrier subject to the Act to regulate 

commerce. 

The Commission shall establish a plan designed to substantially reduce burdens imposed upon small businesses as a result of requirements established by the Commission under 

clause (b) relating to the filing of quarterly financial reports. 

Such plan shall (1) be established after consultation with small 

businesses and persons who use the information contained in 

such quarterly financial reports; (2) provide for a reduction of 

the number of small businesses required to file such quarterly 

financial reports; and (3) make revisions in the forms used for 

such quarterly financial reports for the purpose of reducing the 

complexity of such forms. The Commission, not later than December 31, 1980, shall submit such plan to the Committee on 

Commerce, Science, and Transportation of the Senate and to 

the Committee on Energy and Commerce of the House of Representatives. Such plan shall take effect not later than October 

31, 1981. 

No officer or employee of the Commission or any Commissioner may publish or disclose information to the public, or to 

any Federal agency, whereby any line-of-business data furnished by a particular establishment or individual can be identified. No one other than designated sworn officers and employees of the Commission may examine the line-of-business reports from individual firms, and information provided in the 

line-of-business program administered by the Commission shall 

be used only for statistical purposes. Information for carrying 

out specific law enforcement responsibilities of the Commission 

shall be obtained under practices and procedures in effect on 

the date of the enactment of the Federal Trade Commission 

Improvements Act of 1980, or as changed by law. 

Nothing in this section (other than the provisions of clause 

(c) and clause (d)) shall apply to the business of insurance, except that the Commission shall have authority to conduct studies and prepare reports relating to the business of insurance. 

The Commission may exercise such authority only upon receiving a request which is agreed to by a majority of the members 

of the Committee on Commerce, Science, and Transportation of 

the Senate or the Committee on Energy and Commerce of the 

House of Representatives. The authority to conduct any such 

study shall expire at the end of the Congress during which the 

request for such study was made. 

(10)(A) Upon request from a foreign law enforcement agency, 

to provide assistance in accordance with this subsection if the 

requesting agency states that it is investigating, or engaging in 

enforcement proceedings against, possible violations of laws 

prohibiting fraudulent or deceptive commercial practices, or 

other practices that may be similar to practices prohibited by 

any provision of the laws administered by the Commission, 

22

other than Federal antitrust laws (as defined in section 12(5) 

of the International Antitrust Enforcement Assistance Act of 

1994 (15 U.S.C. 6211(5))), the Commission may, in its discretion— (i) conduct such investigation as the Commission deems 

necessary to collect information and evidence pertinent to 

the request for assistance, using all investigative powers 

authorized by this Act; and 

(ii) seek and accept appointment by a United States district court of Commission attorneys to provide assistance 

to foreign and international tribunals and to litigants before such tribunals on behalf of a foreign law enforcement 

agency pursuant to section 1782 of title 28, United States 

Code, when the request is from an agency acting to investigate or pursue the enforcement of civil laws or when the 

Attorney General refers such a request to the Commission. 

(B) The Commission may provide assistance under paragraph (1) without requiring that the conduct identified in the 

request also constitutes a violation of the laws of the United 

States. 

(C) In deciding whether to provide such assistance, the Commission shall consider all relevant factors, including— (i) whether the requesting agency has agreed to provide 

or will provide reciprocal assistance to the Commission; 

(ii) whether compliance with the request would prejudice 

the public interest of the United States; and 

(iii) whether the requesting agency’s investigation or enforcement proceeding concerns acts or practices that cause 

or are likely to cause injury to a significant number of persons. 

(D) If a foreign law enforcement agency has set forth a legal 

basis for requiring execution of an international agreement as 

a condition for reciprocal assistance, or as a condition for disclosure of materials or information to the Commission, the 

Commission, after consultation with the Secretary of State, 

may negotiate and conclude an international agreement, in the 

name of either the United States or the Commission and with 

the final approval of the agreement by the Secretary of State, 

for the purpose of obtaining such assistance or disclosure. The 

Commission may undertake in such an international agreement—

(i) to provide assistance using the powers set forth in 

this subsection; 

(ii) to disclose materials and information in accordance 

with subsection (f) of this section and section 21(b)(6) of 

this Act; and 

(iii) to engage in further cooperation, and protect materials and information received from disclosure, as authorized by this Act. 

(E) The authority in this subsection is in addition to, and not 

in lieu of, any other authority vested in the Commission or any 

other officer of the United States.

(11) REFERRAL FOR CRIMINAL PROCEEDINGS.—

(A) IN GENERAL.—Whenever the Commission obtains evidence that any person, partnership or corporation, either 

23

domestic or foreign, has engaged in conduct that may constitute a violation of Federal criminal law, to transmit such 

evidence to the Attorney General who may, in his discretion, institute criminal proceedings under appropriate statutes. Nothing in this paragraph affects any other authority 

of the Commission to disclose information. 

(B) INTERNATIONAL INFORMATION.—The Commission 

shall endeavor to ensure, with respect to memoranda of understanding and international agreements it may conclude, 

that material it has obtained from foreign law enforcement 

agencies acting to investigate or pursue the enforcement of 

foreign criminal laws may be used for the purpose of investigation, prosecution, or prevention of violations of United 

States criminal laws.

(12) INTERNATIONAL COORDINATION ACTIVITIES.—To expend 

appropriated funds for—

(A) operating expenses and other costs of bilateral and 

multilateral cooperative law enforcement groups conducting 

activities of interest to the Commission and in which the 

Commission participates; and 

(B) expenses for consultations and meetings hosted by the 

Commission with foreign government agency officials, 

members of their delegations, appropriate representatives 

and staff to exchange views concerning developments relating to the Commission’s mission, development and implementation of cooperation agreements, and provision of technical assistance for the development of foreign consumer 

protection or competition regimes, such expenses to include 

necessary administrative and logistic expenses and the expenses of Commission staff and foreign invitees in attendance at such consultations and meetings including—

(i) such incidental expenses as meals taken in the 

course of such attendance; 

(ii) any travel and transportation to or from such 

meetings; and 

(C) any other related lodging or subsistence.

SEC. 16. COMMENCEMENT, DEFENSE, INTERVENTION AND SUPERVISION OF LITIGATION AND APPEAL BY COMMISSION OR 

ATTORNEY GENERAL. 

[15 U.S.C. 56]

(a) PROCEDURE FOR EXERCISE OF AUTHORITY TO LITIGATE OR APPEAL.—(1) Except as otherwise provided in paragraph (2) or (3), 

if—

(A) before commencing, defending, or intervening in, any 

civil action involving this Act (including an action to collect a 

civil penalty) which the Commission, or the Attorney General 

on behalf of the Commission, is authorized to commence, defend, or intervene in, the Commission gives written notification 

and undertakes to consult with the Attorney General with respect to such action; and 

(B) the Attorney General fails within 45 days after receipt of 

such notification to commence, defend, or intervene in, such action; 

24

the Commission may commence, defend, or intervene in, and supervise the litigation of, such action and any appeal of such action in 

its own name by any of its attorneys designated by it for such purpose. 

(2) Except as otherwise provided in paragraph (3), in any civil action— (A) under section 13 of this Act (relating to injunctive relief); 

(B) under section 19 of this Act (relating to consumer redress); 

(C) to obtain judicial review of a rule prescribed by the Commission, or a cease and desist order issued under section 5 of 

this Act; øor¿

(D) under the second paragraph of section 9 of this Act (relating to enforcement of a subpena) and under the fourth paragraph of such section (relating to a compliance with section 6 

of this Act); and 

(E) under section 21a of this Act;

the Commission shall have exclusive authority to commence or defend, and supervise the litigation of, such action and any appeal of 

such action in its own name by any of its attorneys designated by 

it for such purpose, unless the Commission authorizes the Attorney 

General to do so. The Commission shall inform the Attorney General of the exercise of such authority and such exercise shall not 

preclude the Attorney General from intervening on behalf of the 

United States in such action and any appeal of such action as may 

be otherwise provided by law. 

(3)(A) If the Commission makes a written request to the Attorney 

General, within the 10-day period which begins on the date of the 

entry of the judgment in any civil action in which the Commission 

represented itself pursuant to paragraph (1) or (2), to represent 

itself through any of its attorneys designated by it for such purpose 

before the Supreme Court in such action, it may do so, if— (i) the Attorney General concurs with such request; or 

(ii) the Attorney General, within the 60-day period which begins on the date of the entry of such judgment—

(I) refuses to appeal or file a petition for writ of certiorari with respect to such civil action, in which case he 

shall give written notification to the Commission of the 

reasons for such refusal within such 60-day period; or 

(II) the Attorney General fails to take any action with 

respect to the Commission’s request. 

(B) In any case where the Attorney General represents the Commission before the Supreme Court in any civil action in which the 

Commission represented itself pursuant to paragraph (1) or (2), the 

Attorney General may not agree to any settlement, compromise, or 

dismissal of such action, or confess error in the Supreme Court 

with respect to such action, unless the Commission concurs. 

(C) For purposes of this paragraph (with respect to representation before the Supreme Court), the term ‘‘Attorney General’’ includes the Solicitor General. 

(4) If, prior to the expiration of the 45-day period specified in 

paragraph (1) of this section or a 60-day period specified in paragraph (3), any right of the Commission to commence, defend, or intervene in, any such action or appeal may be extinguished due to 

any procedural requirement of any court with respect to the time 

25

in which any pleadings, notice of appeal, or other acts pertaining 

to such action or appeal may be taken, the Attorney General shall 

have one-half of the time required to comply with any such procedural requirement of the court (including any extension of such 

time granted by the court) for the purpose of commencing, defending, or intervening in the civil action pursuant to paragraph (1) or 

for the purpose of refusing to appeal or file a petition for writ of 

certiorari and the written notification or failing to take any action 

pursuant to paragraph 3(A)(ii).

(5) The provisions of this subsection shall apply notwithstanding 

chapter 31 of title 28, United States Code, or any other provision 

of law. 

(b) CERTIFICATION BY COMMISSION TO ATTORNEY GENERAL FOR

CRIMINAL PROCEEDINGS.—Whenever the Commission has reason to 

believe that any person, partnership, or corporation is liable for a 

criminal penalty under this Act, the Commission shall certify the 

facts to the Attorney General, whose duty it shall be to cause appropriate criminal proceedings to be brought.

(c)(1) The Commission may designate Commission attorneys to assist the Department of Justice in connection with litigation in foreign courts in which the Commission has an interest, pursuant to 

the terms of a memorandum of understanding to be negotiated by 

the Commission and the Department of Justice. The preceding sentence is in addition to, and not in lieu of, any other authority vested 

in the Commission or any other officer of the United States. 

(2) The Commission is authorized to expend appropriated funds 

for the retention of foreign counsel for consultation and for litigation 

in foreign courts, and for expenses related to consultation and to 

litigation in foreign courts in which the Commission has an interest. 

(3) Nothing in this section authorizes the payment of claims or 

judgments from any source other than the permanent and indefinite 

appropriation authorized by section 1304 of title 31, United States 

Code.

SEC. 21. CONFIDENTIALITY. 

[15 U.S.C. 57B–2]

(a) DEFINITIONS.—For purposes of this section: 

(1) The term ‘‘material’’ means documentary material, tangible things, written reports or answers to questions, and transcripts of oral testimony. 

(2) The term ‘‘Federal agency’’ has the meaning given it in 

section 552(e) of title 5, United States Code. 

(b) PROCEDURES RESPECTING DOCUMENTS, TANGIBLE THINGS, OR

TRANSCRIPTS OF ORAL TESTIMONY RECEIVED PURSUANT TO COM- PULSORY PROCESS IN INVESTIGATION.—(1) With respect to any document, tangible thing, or transcript of oral testimony received by the 

Commission pursuant to compulsory process in an investigation, a 

purpose of which is to determine whether any person may have violated any provision of the laws administered by the Commission, 

the procedures established in paragraph (2) through paragraph (7) 

shall apply. 

(2)(A) The Commission shall designate a duly authorized agent 

to serve as custodian of documentary material, tangible things, or 

written reports or answers to questions, and transcripts of oral tesVerDate jul 14 2003 09:25 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00027 Fmt 6659 Sfmt 6601 E:\HR\OC\SR127.XXX SR127
26

timony, and such additional duly authorized agents as the Commission shall determine from time to time to be necessary to serve as 

deputies to the custodian. 

(B) Any person upon whom any demand for the production of 

documentary material has been duly served shall make such material available for inspection and copying or reproduction to the custodian designated in such demand at the principal place of business of such person (or at such other place as such custodian and 

such person thereafter may agree and prescribe in writing or as the 

court may direct pursuant to section 20(h)) on the return date specified in such demand (or on such later date as such custodian may 

prescribe in writing). Such person may upon written agreement between such person and the custodian substitute copies for originals 

of all or any part of such material. 

(3)(A) The custodian to whom any documentary material, tangible things, written reports or answers to questions, and transcripts of oral testimony are delivered shall take physical possession of such material, reports or answers, and transcripts, and 

shall be responsible for the use made of such material, reports or 

answers, and transcripts, and for the return of material, pursuant 

to the requirements of this section. 

(B) The custodian may prepare such copies of the documentary 

material, written reports or answers to questions, and transcripts 

of oral testimony, and may make tangible things available, as may 

be required for official use by any duly authorized officer or employee of the Commission under regulations which shall be promulgated by the Commission. Notwithstanding subparagraph (C), such 

material, things, and transcripts may be used by any such officer 

or employee in connection with the taking of oral testimony under 

this section. 

(C) Except as otherwise provided in this section, while in the possession of the custodian, no documentary material, tangible things, 

reports or answers to questions, and transcripts of oral testimony 

shall be available for examination by any individual other than a 

duly authorized officer or employee of the Commission without the 

consent of the person who produced the material, things, or transcripts. Nothing in this section is intended to prevent disclosure to 

either House of the Congress or to any committee or subcommittee 

of the Congress, except that the Commission immediately shall notify the owner or provider of any such information of a request for 

information designated as confidential by the owner or provider. 

(D) While in the possession of the custodian and under such reasonable terms and conditions as the Commission shall prescribe—

(i) documentary material, tangible things, or written reports 

shall be available for examination by the person who produced 

the material, or by any duly authorized representative of such 

person; and 

(ii) answers to questions in writing and transcripts of oral 

testimony shall be available for examination by the person who 

produced the testimony or by his attorney. 

(4) Whenever the Commission has instituted a proceeding 

against a person, partnership, or corporation, the custodian may 

deliver to any officer or employee of the Commission documentary 

material, tangible things, written reports or answers to questions, 

and transcripts of oral testimony for official use in connection with 

27

such proceeding. Upon the completion of the proceeding, the officer 

or employee shall return to the custodian any such material so delivered which has not been received into the record of the proceeding. 

(5) If any documentary material, tangible things, written reports 

or answers to questions, and transcripts of oral testimony have 

been produced in the course of any investigation by any person 

pursuant to compulsory process and—

(A) any proceeding arising out of the investigation has been 

completed; or 

(B) no proceeding in which the material may be used has 

been commenced within a reasonable time after completion of 

the examination and analysis of all such material and other information assembled in the course of the investigation; then 

the custodian shall, upon written request of the person who 

produced the material, return to the person any such material 

which has not been received into the record of any such proceeding (other than copies of such material made by the custodian pursuant to paragraph (3)(B)). 

(6) The custodian of any documentary material, written reports 

or answers to questions, and transcripts of oral testimony may deliver to any officers or employees of appropriate Federal law enforcement agencies, in response to a written request, copies of such 

material for use in connection with an investigation or proceeding 

under the jurisdiction of any such agency. The custodian of any 

tangible things may make such things available for inspection to 

such persons on the same basis. Such materials shall not be made 

available to any such agency until the custodian receives certification of any officer of such agency that such information will be 

maintained in confidence and will be used only for official law enforcement purposes. Such documentary material, results of inspections of tangible things, written reports or answers to questions, 

and transcripts of oral testimony may be used by any officer or employee of such agency only in such manner and subject to such conditions as apply to the Commission under this section. The custodian may make such materials available to any State law enforcement agency upon the prior certification of any officer of such agency that such information will be maintained in confidence and will 

be used only for official law enforcement purposes. The custodian 

may make such material available to any foreign law enforcement 

agency upon the prior certification of any officer of any such foreign 

law enforcement agency that such material will be maintained in 

confidence and will be used only for official law enforcement purposes, if—

(A) the foreign law enforcement agency has set forth a bona 

fide legal basis for its authority to maintain the material in 

confidence; and 

(B) the materials are to be used for purposes of investigating, 

or engaging in enforcement proceedings related to, possible violations of—

(i) foreign laws prohibiting fraudulent or deceptive commercial practices or other practices similar to practices 

prohibited by any law administered by the Commission; 

28

(ii) law administered by the Commission, if disclosure of 

the material would further a Commission investigation or 

enforcement proceeding; or 

(iii) with the approval of the Attorney General, foreign 

criminal laws. 

Nothing in the preceding sentence authorizes the disclosure of material obtained in connection with the administration of the Federal 

antitrust laws or foreign antitrust laws (as defined in paragraphs 

(5) and (7), respectively, of section 12 of the International Antitrust 

Enforcement Assistance Act of 1994 (16 U.S.C. 6211) to any officer 

or employee of a foreign law enforcement agency. 

(7) In the event of the death, disability, or separation from service in the Commission of the custodian of any documentary material, tangible things, written reports or answers to questions, and 

transcripts of oral testimony produced under any demand issued 

under this Act, or the official relief of the custodian from responsibility for the custody and control of such material, the Commission 

promptly shall—

(A) designate under paragraph (2)(A) another duly authorized agent to serve as custodian of such material; and 

(B) transmit in writing to the person who produced the material or testimony notice as to the identity and address of the 

successor so designated. 

Any successor designated under paragraph (2)(A) as a result of the 

requirements of this paragraph shall have (with regard to the material involved) all duties and responsibilities imposed by this section upon his predecessor in office with regard to such material, except that he shall not be held responsible for any default or dereliction which occurred before his designation. 

(c) INFORMATION CONSIDERED CONFIDENTIAL.—(1) All information reported to or otherwise obtained by the Commission which is 

not subject to the requirements of subsection (b) shall be considered confidential when so marked by the person supplying the information and shall not be disclosed, except in accordance with the 

procedures established in paragraph (2) and paragraph (3). 

(2) If the Commission determines that a document marked confidential by the person supplying it may be disclosed because it is 

not a trade secret or commercial or financial information which is 

obtained from any person and which is privileged or confidential, 

within the meaning of section 6(f), then the Commission shall notify such person in writing that the Commission intends to disclose 

the document at a date not less than 10 days after the date of receipt of notification. 

(3) Any person receiving such notification may, if he believes disclosure of the document would cause disclosure of a trade secret, 

or commercial or financial information which is obtained from any 

person and which is privileged or confidential, within the meaning 

of section 6(f), before the date set for release of the document, bring 

an action in the district court of the United States for the district 

within which the documents are located or in the United States 

District Court for the District of Columbia to restrain disclosure of 

the document. Any person receiving such notification may file with 

the appropriate district court or court of appeals of the United 

States, as appropriate, an application for a stay of disclosure. The 

29

documents shall not be disclosed until the court has ruled on the 

application for a stay. 

(d) PARTICULAR DISCLOSURES ALLOWED.—(1) The provisions of 

subsection (c) shall not be construed to prohibit— (A) the disclosure of information to either House of the Congress or to any committee or subcommittee of the Congress, except that the Commission immediately shall notify the owner 

or provider of any such information of a request for information designated as confidential by the owner or provider;

(B) the disclosure of the results of any investigation or study 

carried out or prepared by the Commission, except that no information shall be identified nor shall information be disclosed 

in such a manner as to disclose a trade secret of any person 

supplying the trade secret, or to disclose any commercial or financial information which is obtained from any person and 

which is privileged or confidential; 

(C) the disclosure of relevant and material information in 

Commission adjudicative proceedings or in judicial proceedings 

to which the Commission is a party; or 

(D) the disclosure to a Federal agency of disaggregated information obtained in accordance with section 3512 of title 44, 

United States Code, except that the recipient agency shall use 

such disaggregated information for economic, statistical, or policymaking purposes only, and shall not disclose such information in an individually identifiable form. 

(2) Any disclosure of relevant and material information in Commission adjudicative proceedings or in judicial proceedings to which 

the Commission is a party shall be governed by the rules of the 

Commission for adjudicative proceedings or by court rules or orders, except that the rules of the Commission shall not be amended 

in a manner inconsistent with the purposes of this section. 

(e) EFFECT ON OTHER STATUTORY PROVISIONS LIMITING DISCLO- SURE.—Nothing in this section shall supersede any statutory provision which expressly prohibits or limits particular disclosures by 

the Commission, or which authorizes disclosures to any other Federal agency. 

(f) EXEMPTION FROM DISCLOSURE.—(1) Any material which is received by the Commission in any investigation, a purpose of which 

is to determine whether any person may have violated any provision of the laws administered by the Commission, and which is provided pursuant to any compulsory process under this Act or which 

is provided voluntarily in place of such compulsory process shall be 

exempt from disclosure under section 552 of title 5, United States 

Code.

(2)(A) Except as provided in subparagraph (C) of this paragraph, 

the Commission shall not be compelled to disclose— (i) material obtained from a foreign law enforcement agency 

or other foreign government agency, if the foreign law enforcement agency or other foreign government agency has requested 

confidential treatment, or has precluded such disclosure under 

other use limitations, as a condition of disclosing the material; 

(ii) material reflecting consumer complaints obtained from 

any other foreign source, if that foreign source supplying the 

material has requested confidential treatment as a condition of 

disclosing the material; or 

30

(iii) material reflecting a consumer complaint submitted to a 

Commission reporting mechanism sponsored in part by foreign 

law enforcement agencies or other foreign government agencies. 

(B) For purposes of section 552 of title 5, this paragraph shall be 

considered a statute described in subsection (b)(3)(B) of such section 

552. 

(C) Nothing in this paragraph shall authorize the Commission to 

withhold information from the Congress or prevent the Commission 

from complying with an order of a court of the United States in an 

action commenced by the United States or the Commission. 

SEC. 21A. CONFIDENTIALITY AND DELAYED NOTICE OF COMPULSORY 

PROCESS FOR CERTAIN THIRD PARTIES. 

(a) IN GENERAL.—The provisions for delay or prohibition of notice 

under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) 

and the Electronic Communication Privacy Act (18 U.S.C. 2701 et 

seq.) shall be available to the Commission—

(1) upon a finding by the presiding judge or magistrate judge 

pursuant to an ex parte application by the Commission that 

there is reason to believe that notification may cause an adverse 

result; or 

(2) where notification is delayed pursuant to section 

2705(a)(1)(B) of title 18, a finding by the Commission that there 

is reason to believe that notification may cause an adverse result. 

(b) EX PARTE APPLICATION BY COMMISSION.—If the provisions for 

delayed notice described in subsection (a) do not apply, the Commission may apply ex parte to a presiding judge or magistrate judge 

for an order commanding the recipient of compulsory process issued 

by the Commission not to notify any other person of the existence 

of the process, notwithstanding any law or regulation of the United 

States, or under the constitution, or any law or regulation, of any 

State, political subdivision of a State, territory of the United States, 

or the District of Columbia. The presiding judge or magistrate judge 

shall enter such an order granting the requested delay for a period 

not to exceed 90 days, or for such period as the presiding judge or 

magistrate judge deems appropriate, if there is reason to believe 

that notification may cause an adverse result. The presiding judge 

or magistrate judge may grant extensions of this delay of notice of 

up to 90 days each in accordance with this subsection. 

(c) NO LIABILITY FOR COMPLIANCE.—The recipient of compulsory 

process issued by the Commission under this section shall not be 

liable under any law or regulation of the United States, or under 

the constitution, or any law or regulation, of any State, political 

subdivision of a State, territory of the United States, or the District 

of Columbia, or under any contract or other legally enforceable 

agreement, for failure to provide notice that such process has been 

issued or that the recipient has provided information in response to 

such process. The preceding sentence does not provide any exemption from liability for the underlying conduct. 

(d) VENUE AND PROCEDURE.—

(1) IN GENERAL.—All judicial proceedings under this section 

may be brought in the United States District Court for the District of Columbia or any other appropriate United States District Court. All ex parte applications by the Commission under 

31

this section related to a single investigation may be brought in 

a single proceeding. 

(2) IN CAMERA PROCEEDINGS.—Upon application by the Commission, all judicial proceedings pursuant to this section shall 

be held in camera and the records thereof sealed until expiration of the period of delay or such other date as the presiding 

judge or magistrate judge may permit. 

(e) SECTION NOT TO APPLY TO ANTITRUST INVESTIGATIONS OR

PROCEEDINGS.—This section shall not apply to an investigation or 

proceeding related to the administration of federal antitrust laws or 

foreign antitrust laws (within the meaning of section 6211 of this 

title). 

(f) ADVERSE RESULT DEFINED.—In this section the term ‘‘adverse 

result’’ means— (1) the transfer of assets or records outside the territorial limits of the United States; 

(2) impeding the ability of the Commission to identify or trace 

funds; 

(3) endangering the life or physical safety of an individual; 

(4) flight from prosecution; 

(5) the destruction of, or tampering with, evidence; 

(6) the intimidation of potential witnesses; 

(7) the dissipation or concealment of assets; or 

(8) otherwise seriously jeopardizing an investigation or unduly delaying a trial. 

SEC. 21B. PROTECTION FOR VOLUNTARY PROVISION OF INFORMATION. 

(a) IN GENERAL.—An entity described in subsection (e)(1) that voluntarily provides material to the Commission that it reasonably believes is relevant to— (1) a possible unfair or deceptive act or practice, as defined 

in section 5(a) of this Act, or 

(2) assets subject to recovery by the Commission, including 

assets located in foreign jurisdictions, 

shall not be liable to any person under any law or regulation of the 

United States, or under the constitution, or any law or regulation, 

of any State, political subdivision of a State, territory of the United 

States, or the District of Columbia, for such disclosure or for any 

failure to provide notice of such disclosure. The preceding sentence 

does not provide any exemption from liability for the underlying 

conduct. 

(b) LIABILITY LIMITATION.—An entity described in subsection 

(e)(2) that makes a voluntary disclosure to the Commission regarding the subjects described in subsection (a)(1) and (2) shall be exempt from liability in accordance with the provisions of section 

5318(g)(3) of title 31, United States Code. 

(c) CONSUMER COMPLAINTS.—Any entity described in subsection 

(e) that makes a voluntary disclosure of consumer complaints sent 

to it, or information contained therein, to the Commission shall not 

be liable to any person under any law or regulation of the United 

States, or under the constitution, or any law or regulation, of any 

State, political subdivision of a State, territory of the United States, 

or the District of Columbia, for such disclosure or for any failure 

to provide notice of such disclosure. The preceding sentence does not 

provide any exemption from liability for the underlying conduct. 

32

(d) FOIA EXEMPTION.—Material submitted pursuant to this section with a request for confidential treatment shall be exempt from 

disclosure under section 552 of title 5, United States Code, to the 

extent it could reasonably be expected to disclose either the identity 

of persons, partnerships, or corporations that are the subject of such 

disclosures, or the identification of particular financial accounts, 

their ownership, or confidential records of account activity. This exemption is in addition to, and not in lieu of, any other applicable 

exemptions from disclosure in such section 552. 

(e) ENTITIES TO WHICH SECTION APPLIES.—This section applies to 

the following entities, whether foreign or domestic: 

(1) A courier service, a commercial mail receiving agency, an 

industry membership organization, a payment system provider, 

a consumer reporting agency, a domain name registrar and registry, and a provider of alternative dispute resolution services; 

(2) a bank or thrift institution, a commercial bank or trust 

company, an investment company, a credit card issuer, an operator of a credit card system, and an issuer, redeemer, or cashier 

of travelers’ checks, money orders, or similar instruments; and 

(3) an Internet service provider or provider of telephone services.

SEC. 25. AUTHORIZATION OF APPROPRIATIONS. 

[15 U.S.C. 57C]

øThere are authorized to be appropriated to carry out the functions, powers, and duties of the Commission not to exceed 

$92,700,000 for fiscal year 1994; not to exceed $99,000,000 for fiscal year 1995; not to exceed $102,000,000 for fiscal year 1996; not 

to exceed $107,000,000 for fiscal year 1997; and not to exceed 

$111,000,000 for fiscal year 1998.¿

There are authorized to be appropriated to carry out the functions, powers, and duties of the Commission not to exceed 

$194,742,000 for fiscal year 2004, $224,695,000 for fiscal year 2005, 

$235,457,000 for fiscal year 2006, and $245,000,000 for fiscal year 

2007.

SEC. 25A. STAFF EXCHANGES. 

(a) IN GENERAL.—The Congress consents to—

(1) the retention or employment of officers or employees of foreign government agencies on a temporary basis by the Commission under section 3109 of title 5, United States Code, section 

202 of title 18, United States Code, or section 2 of this Act (15 

U.S.C. 42); and 

(2) the retention or employment of officers or employees of the 

Commission on a temporary basis by such foreign government 

agencies. 

(b) FORM OF ARRANGEMENTS.—Staff arrangements under subsection (a) need not be reciprocal. The Commission may accept payment or reimbursement, in cash or in kind, from a foreign government agency to which this section is applicable, or payment or reimbursement made on behalf of such agency, for expenses incurred by 

the Commission, its members, and employees in carrying out such 

arrangements.

33

SEC. 26. REIMBURSEMENT OF EXPENSES. 

The Commission may accept payment or reimbursement, in cash 

or in kind, from a domestic or foreign law enforcement authority, 

or payment or reimbursement made on behalf of such authority, for 

expenses incurred by the Commission, its members, or employees in 

carrying out any activity pursuant to a statute administered by the 

Commission without regard to any other provision of law. Any such 

payments or reimbursements shall be considered a reimbursement 

to the appropriated funds of the Commission. 

SEC. 27. GIFTS AND VOLUNTARY AND UNCOMPENSATED SERVICES. 

(a) IN GENERAL.—In furtherance of its functions the Commission 

may accept, hold, administer, and use unconditional gifts, donations, and bequests of real, personal, and other property and, notwithstanding section 1342 of title 31, United States Code, accept 

voluntary and uncompensated services. 

(b) LIMITATIONS.—

(1) CONFLICTS OF INTEREST.—Notwithstanding subsection (a), 

the Commission may not accept, hold, administer, or use a gift, 

donation, or bequest if the acceptance, holding, administration, 

or use would create a conflict of interest or the appearance of 

a conflict of interest. 

(2) VOLUNTARY SERVICES.—A person who provides voluntary 

and uncompensated service under subsection (a) shall be considered a Federal employee for purposes of—

(A) chapter 81 of title 5, United States Code, (relating to 

compensation for injury); 

(B) sections 2671 through 2680 of title 28, United States 

Code, (relating to tort claims); and 

(C) for purposes of the provisions of law relating to ethics, conflicts of interest, corruption, and any other criminal 

or civil statute or regulation governing the standards of 

conduct for Federal employees.

øSEC. 26. SHORT TITLE.¿

[15 U.S.C. 58]

SEC. 28. SHORT TITLE.

This Act may be cited as the ‘‘Federal Trade Commission Act.’’

Æ