1 

 

Remarks at NAD 2020 

One Step Forward, Two Steps Back: Sound Policy

on Consumer Protection Fundamentals

Christine S. Wilson∗

Commissioner, U.S. Federal Trade Commission

Virtual Event

October 5, 2020

 

∗

 The views expressed in these remarks are my own and do not necessarily reflect the views of the Federal Trade 

Commission or any other Commissioner. Many thanks to my Attorney Advisor, Robin Rosen Spector, for her 

assistance in the preparation of these remarks and to Robert Frisby, Counsel to the Bureau of Consumer 

Protection Director, for his research assistance. 

United States of America

Federal Trade Commission
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I. Introduction

Thank you for inviting me to speak with you today. Given the vital role that the National 

Advertising Division plays in our economy, it is a pleasure to join you. We at the FTC view our 

agency as small but mighty – my favorite analogy is the Little Engine that Could. But in a world 

of finite resources, there is no doubt that force multipliers like the NAD contribute significantly 

to the goal of protecting consumers. And those of us who are fans of smaller government 

appreciate the nature of the NAD as a self-regulatory body.

Notably, the cooperation between the FTC and the NAD has always been strong. While some 

may view the revolving door between government and the private sector with distaste, many 

appreciate the revolving door that the FTC shares with the NAD. Professionals like Lee Peeler

and Mary Engle served with distinction at the FTC and then took their tremendous knowledge 

and experience to the NAD, further strengthening this important institution. Consumers benefit 

when they can trust that companies’ claims are truthful and substantiated, and we greatly 

appreciate your work to advance this goal. 

My talk today is titled “One Step Forward, Two Steps Back – Sound Policy on Consumer 

Protection Fundamentals.” The title originates in part from my recent fixation with relearning 

how to walk properly after shattering my kneecap. Those who have known me for a long time 

rightly may wonder whether a mountain bike or a skateboard ramp – or, more recently, even a 

dirt bike – played a role in the injury. After having two surgeries to cobble my patella back 

together, I wish I had a cool story to go with the pain. Unfortunately, the real story is boring – I 

slipped off a chair during a DIY project in my daughter’s townhouse. Each day, I get a little 

closer to walking without a limp – one step forward in the healing process. But patience is not 
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my strength, so sometimes I overdo it and the pain drives me back to icepacks and crutches –

two steps back. 

Today I’d like to highlight three key policy issues – one area where I’d like the FTC to take a 

step forward toward even better results for consumers, and two areas where I’d like to avoid 

having the FTC take a step back from this goal. First, I will describe my perspective on the 

appropriate role of rules and regulations in a market economy. It is my hope that the FTC can 

take a step forward by eliminating unduly burdensome, highly prescriptive, and outdated 

regulations. Next, I will explain why the Commission’s historical and widespread reliance on 

non-monetary settlements makes sense, contrary to assertions by some of my fellow 

Commissioners. I would like to avoid taking one step back by insisting on monetary relief in 

every matter, regardless of whether that approach will require litigating more and settling fewer 

cases. And finally, I will discuss the FTC’s traditional (and appropriately limited) approach to 

individual liability for corporate executives. Although I have fellow commissioners who 

disagree, routinely holding liable the CEOs of legitimate companies would constitute a second 

step back from sound enforcement.

Before I begin, I must give the standard disclaimer that the views expressed today are my 

own and do not reflect those of the Commission or any other Commissioner.

II. Rules and Regulations in a Market Economy 

In 2016, President Donald J. Trump campaigned in favor of deregulation. As a longstanding 

and ardent advocate of free markets,

1 I agree wholeheartedly with the President’s deregulatory 

 1 Christine S. Wilson, “Milton Friedman Is Still Right: Marking the 35th Anniversary of Free Markets for Free 

Men,” Remarks at CPAC Brazil, São Paulo, Brazil (Oct. 12, 2019), 

https://www.ftc.gov/system/files/documents/public_statements/1553170/wilson_-_cpac_brazil_remarks_10-12-

19.pdf. 
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agenda.2 As a student of economics, I learned how government intervention could distort market 

forces to the detriment of consumers.3 As a practitioner, I learned from clients how incumbents

could exploit existing regulatory regimes to deter the entry of would-be competitors or raise the 

costs of their rivals.4 And when I oversaw regulatory affairs for Delta Air Lines, I saw firsthand 

how prescriptive regulations could limit operational flexibility and preclude sound business 

solutions – while rarely generating corresponding safety benefits for consumers.5

As you can tell, I am highly skeptical of the government’s ability to enhance consumer 

welfare through the widespread adoption of rules and regulations. But economics literature 

clearly teaches that, in some instances, information asymmetries and other phenomena prevent 

market forces from producing the best outcomes for consumers.6 In those instances, some 

 2 See Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” 82 FR 9339 (2017) 

(stipulating that “for every new regulation issued, at least two prior regulations [must] be identified for elimination,” 

and calling for a new regulatory budgeting process to control the overall cost of agency regulations).

3 Robert S. Pindyck & Daniel L. Rubinfeld, MICROECONOMICS, 342, 351, 355 (2017) (discussing price supports and 

production quotas; import quotas and tariffs; taxes and subsidies). 4 Lindt, John, “Groups drop suits against Walmart In Visalia, Porterville,” The Visalia Times-Delta (Nov. 3, 2016), 

https://www.visaliatimesdelta.com/story/news/2016/11/03/groupsdrop-suits-against-almart-visaliaporterville/93272360/ (“the mysterious groups who have bankrolled years of legal battles to stop construction of 

Super Walmart stores and other non-union grocers, are throwing in the towel this week – at least in the Visalia and 

Porterville cases. For some, the legal wrangling has gone on for a decade and together cost developers, tenants and 

cities millions of dollars. The mostly anonymous groups use the California Environmental Quality Act (CEQA) to 

slow or halt approvals – citing issues like noise and light.”); Compl. ¶ 27, FTC v. Reckitt Benckiser, 1:2019-cv00028 (W.D. Va., July 11, 2019) (“Invidior submitted a citizen petition requesting that the FDA reject any generic 

Suboxone Tablet applications or subject them to additional requirements because it knew doing so could delay 

approval of generics while the FDA reviewed it.”); G. Richard Shell, Make the Rules or Your Rivals Will, 

WHARTON SCHOOL PRESS (2004) (arguing for using law, litigation, regulation and lobbying as part of competitive 

business strategy).

5 Comments of Airlines for America, Proposals for Fundamental Reform of DOT Economic Regulation and 

Enforcement, Docket No. DOT-OST-2017-0069 (Dec. 1, 2017), available at 

https://www.regulations.gov/contentStreamer?documentId=DOT-OST-2017-0069-

2751&attachmentNumber=1&contentType=pdf (calling on the Department of Transportation to repeal various rules 

and requirements). 6 See George A. Akerlof, The Market for “Lemons”: Quality Uncertainty and the Market Mechanism, 84 Q. J. ECON

488 (1970) (describing how adverse selection resulting from information asymmetries about quality across buyers 

and sellers can lead to market unraveling, in which efficient trades are not made); John G. Riley, Silver Signals: 

Twenty-Five Years of Screening and Signaling, 39 J. ECON. LIT. 432 (2001) (surveying literature on screening and 

signaling as partial remedies to the inefficiency resulting from asymmetric information); Benjamin R. Handel, 

Adverse Selection and Inertia in Health Insurance Markets: When Nudging Hurts, 103 AMER. ECON. REV. 2643 

(2013) (describing a welfare loss from adverse selection in markets for health insurance equal to 8.2 percent of 

consumer premiums).
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regulations may be necessary to protect health, safety, or other legitimate goals. I myself have 

advocated that federal privacy legislation is necessary to overcome information asymmetries 

between users and tech companies regarding the collection, use, sharing, and monetization of 

consumer data.7 Ideally, though, market failures would be addressed surgically to avoid further 

distorting market forces and creating a rash of unintended consequences.8

It is this perspective that I bring to the table as a Commissioner. As you know, the 

Commission enforces a broad portfolio of rules and regulations that addresses areas ranging from 

children’s privacy to energy labeling for appliances, and from care labels for clothing to data 

security for financial institutions. Some of the Commission’s rules are Congressionally 

mandated,

9 while others have been developed voluntarily by the Commission.10 The FTC also 

promulgates business guidance for specific industries that explains its view of how Section 5 

applies to certain practices and representations.

11

 7 Christine S. Wilson, “Privacy and Public/Private Partnerships in a Pandemic,” Remarks at Privacy + Security 

Academy, Washington, DC (May 7, 2020), 

https://www.ftc.gov/system/files/documents/public_statements/1574938/wilson_-

_remarks_at_privacy_security_academy_5-7-20.pdf, Christine S. Wilson, “A Defining Moment for Privacy: The 

Time is Ripe for Federal Privacy Legislation,” Remarks at Future of Privacy Forum, Washington, DC, February 6, 

2020, 

https://www.ftc.gov/system/files/documents/public_statements/1566337/commissioner_wilson_privacy_forum_spee

ch_02-06-2020.pdf. 8 See David Hyman, OVERCHARGED Cato Institute (2018) (describing financial incentives for cardiologists to 

recommend stenting more often than would otherwise be optimal, saying “Unfortunately, our politically controlled, 

third-party payment system leaves most of that information [required to evaluate the costs and benefits of treatment] 

with cardiologists and hospitals, on whom the system lavishes money only when they perform aggressive 

procedures and regardless of the consequences for patients.”) 9 See Children’s Online Privacy Protection Rule, 16 C.F.R. 312 (implementing the Children’s Online Privacy 

Protection Act of 1998, 15 U.S.C. 6501, et seq.). 10 See Use of Prenotification Negative Option Plans, 16 C.F.R. 425 (promulgated pursuant to the rulemaking 

procedures in the FTC Act). 

11 The Commission has industry guides for numerous industries and claims. See Guides for the Use of 

Environmental Marketing Claims, 16 C.F.R. 260; Use of Endorsements and Testimonials in Advertising, 16 C.F.R. 

255; Guides for the Jewelry, Precious Metals and Pewter Industries, 16, C.F.R. 23. Commission guides are 

published in the Code of Federal Regulations but do not have the force of law. They are the Commission’s 

interpretation of what it would consider unfair or deceptive for the claims addressed. The Commission undertakes a 

notice and comment process to change or update its guides.
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The FTC systematically reviews of its rules and guides, a practice I applaud.

12 When the 

Commission conducts one of these reviews, it routinely asks whether the regulation is still 

necessary. It also inquires about the costs and benefits to businesses and consumers; potential 

conflicts with state, local, federal or international laws; whether consumer perceptions have 

changed; and how changes in relevant technological, economic or environmental conditions have 

impacted the regulated industry.13 In other words, we seek information from stakeholders about 

the ongoing relevance of the rule, as well as its relative costs and benefits. This type of review 

process frequently prompts the Commission to revise its rules and guides to address evolving

market forces. Recently, for example, the Commission repealed the Nursery Guides and the TV 

Picture Rule based on stakeholder feedback that they had become irrelevant in today’s market.14

Given the pace of the rulemaking process, is almost inevitable that the evolution of market 

dynamics will outpace rulemaking procedures, rendering some rules stale almost as soon as they 

are enacted. 

I believe that freeing businesses from unduly burdensome, outdated, and prescriptive 

requirements benefits consumers. As a general rule, less is more in the regulatory arena. Given 

this perspective, you may not be surprised to learn the following fact. Although I have dissented 

only rarely since joining the Commission, over half of my dissents have involved rulemaking 

initiatives. For example, shortly after my arrival at the Commission, I dissented from a Notice of 

Proposed Rulemaking (“NPRM”) for the Energy Labeling Rule. The NPRM requested comment 

 12 Retrospective Review of FTC Rules and Guides, https://www.ftc.gov/enforcement/rules/retrospective-review-ftcrules-guides. The FTC website explains: “Since 1992, the FTC has conducted a regular, systematic review of all its 

rules and guides on a rotating basis. Rules and guides are critically important, but need to be reviewed periodically 

to ensure they are up-to-date, effective, and not overly burdensome.” 13 See, e.g., Health Breach Notification Rule, Request for Comment, 16 C.F.R. 318 (May 8, 2020), 

https://www.federalregister.gov/documents/2020/05/22/2020-10263/health-breach-notification. 14 Guides for the Nursery Industry: Rescission of Guides, 16. C.F.R. 18 (June 4, 2019), 

https://www.federalregister.gov/documents/2019/05/13/2019-09745/guides-for-the-nursery-industry; Deceptive 

Advertising as to Sizes of Viewable Pictures Shown by Television Receiving Sets (The Picture Tube Rule): Federal 

Register Notice Repealing the Rule, 16 C.F.R. 410 (Oct. 2, 2018).
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on changes to improve the Rule’s organization.15 I supported those changes but questioned 

whether it was necessary for the Rule to prescribe the weight of the paper (58 pounds per 500 

sheets) a manufacturer must use when printing the EnergyGuide label and to specify the 

minimum peel capacity of the adhesive for affixing the label to the appliance. I wanted the 

Commission to use that opportunity to rethink its approach to the scope and detail of the Rule’s 

requirements. The majority declined to take that opportunity then, but recently agreed to seek 

comment on these requirements. In March 2020, the Commission sought comment on additional 

changes to the Energy Labeling Rule to incorporate conforming amendments to reflect upcoming 

Department of Energy changes to efficiency descriptors for central air conditioners. I am pleased 

to report that the March Federal Register Notice also sought comment on whether a more 

flexible approach to labeling obligations would provide sufficient guidance to businesses while 

simultaneously fulfilling the Commission’s mandate under the statute.16

For similar reasons, together with Commission Phillips, I issued a dissent from the 

Commission’s proposed amendments to the Safeguards Rule.17 As written, the Rule provides 

 15 Dissenting Statement of Commissioner Christine S. Wilson, Notice of Proposed Rulemaking: Energy Labeling 

Rule (Dec. 10, 2018), https://www.ftc.gov/public-statements/2018/12/dissenting-statement-commissioner-christines-wilson-notice-proposed. 16 16 C.F.R. 305: Energy Labeling Rule; Notice of Proposed Rulemaking; Request for Comment (March 7, 2020), 

https://www.federalregister.gov/documents/2020/04/10/2020-06960/energy-labeling-rule; see also Concurring 

Statement of Commissioner Christine S. Wilson, Energy Labeling Rule (March 7, 2020), 

https://www.ftc.gov/system/files/documents/public_statements/1569815/r611004_wilson_statement_energy_labelin

g.pdf. For example, the Rule specifies the trim size dimensions for labels, including the precise width and length 

(e.g. width 5 1⁄4 to 5 1⁄2 inches (13.34 cm. to 13.97 cm.)); the number of picas for the copy set (between 27 and 29); 

the type style and setting; the weight of the paper stock on which the labels are printed (not less than 58 pounds per 

500 sheets (25” x 38”) or equivalent); and a suggested minimum peel adhesive capacity of 12 ounces per square 

inch. These highly prescriptive requirements depart significantly from the approach employed by other Commission 

Rules and Guides that contain labeling requirements. For example, the Rules and Regulations Under the Textile 

Fiber Products Identification Act provide simply that the “label shall be conspicuous and shall be of such durability 

as to remain attached to the product and its package throughout any distribution, sale, resale and until sold and 

delivered to the ultimate consumer.” 16 C.F.R. Part 303.15. The Commission’s Guides for Select Leather and 

Imitation Leather Products similarly require that the label “should be affixed so as to remain on or attached to the 

product until received by the consumer purchaser.” 16 C.F.R. Part 24.2(g).

17 Dissenting Statement of Commissioner Noah Joshua Phillips and Commissioner Christine S. Wilson, Review of 

Safeguards Rule (Mar. 5, 2019), 
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guidance to financial institutions on how to protect data security – importantly, while not being 

overly prescriptive – in an area where standards continuously evolve. We explained in our 

dissent our concern that the proposal traded flexibility for a more prescriptive approach that 

potentially could handicap smaller players or newer entrants. Although the Notice of Proposed 

Rulemaking merely sought comment on proposed changes – in other words, it was not a final 

determination – given the momentum that gathers during the rulemaking process, I thought it 

important to express my reservations at the outset. Early comments in the docket provided 

support for the concerns that Commissioner Phillips and I expressed in our dissent, and were 

echoed at the subsequent FTC workshop on the proposed revisions. I hope the Commission will 

carefully consider the evidence and input we have received from relevant stakeholders as we 

move forward.

In addition to carefully reviewing our existing roster of Rules and Guides, I also believe the 

Commission should expand its regulatory footprint only after thoughtful deliberation and in a 

manner that falls squarely within the jurisdiction granted to the FTC by Congress. In the 1970s, 

the Commission was prolific in promulgating regulations. These activities earned it the sobriquet 

of the “second most powerful legislature in Washington”18 and resulted in condemnation from 

the courts and Congress.19 While the Commission long ago abandoned some of the most 

 

https://www.ftc.gov/system/files/documents/public_statements/1466705/reg_review_of_safeguards_rule_cmr_philli

ps_wilson_dissent.pdf. 18 See, e.g., J. Howard Beales III & Timothy J. Muris, FTC Consumer Protection at 100: 1970s Redux or Protecting 

Markets to Protect Consumers?, 83 Geo. Wash. L. Rev. 2157, 2159 (2015) (describing the “disastrous failures” of 

the FTC in the 1970s and the 1980s from enforcement and regulatory overreach after a period of intense rulemaking 

activity culminating in the agency’s being dubbed the “National Nanny” (quoting Jean Carper, The Backlash at the 

FTC, WASH. POST, Feb. 6, 1977, at C1)).

19 See Federal Trade Commission Improvements Act of 1980, Pub. L. No. 96-252, 94 Stat. 374 (1980) (reforming 

the ability of the FTC to promulgate rules by requiring a multi-step process with public comment and subject to 

Congressional review). This Act also authorized $255 million in funding for the Commission and was the first time 

since 1977 the agency was funded through the traditional funding process after the backlash from Congress over its 

rulemaking activities. See Kinter, Earl, et al., “The Effect of the Federal Trade Commission Improvements Act of 

1980 on the FTC’s Rulemaking and Enforcement Authority” 58 WASH. U. LAW REV. 847 (1980); see also Alex 

Propes, Privacy and FTC Rulemaking: A Historical Context, IAB (Nov. 6, 2018) (discussing how the FTC’s 
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egregious instances of invasive regulatory zeal, I am concerned that some of my colleagues 

appear eager to repeat history.

For example, the Commission recently sought comment on a proposed rule regarding Made 

in USA labeling. The statute that authorizes us to promulgate this rule limits our authority to 

labels. Significant precedent exists on the definition of “label,” both in the statute and in several

analogous FTC rules and guides in a variety of contexts. The NPRM defines the term “label” far 

more broadly than any of this FTC precedent, and in a way that appears to exceed our statutory 

grant of rulemaking authority. I support the FTC’s enforcement of deceptive Made in USA

claims, and voted to seek comment on this proposed rule. I issued a concurring statement, 

however, expressing my concerns that the proposal in some ways exceeds our authority. In the 

face of statutory constraints, it is not our job to interpret liberally the mandate we have been 

given. If we are unhappy with the scope of our authority, we need to address that issue with 

Congress – as we have on federal privacy and data security legislation. I look forward to 

feedback on the Made in USA labeling issue from stakeholders. 

I will continue to advocate that the Commission refresh and update its rules, regulations, and 

guidance so as to avoid saddling businesses with unduly burdensome, highly prescriptive, or 

outdated regulatory obligations. Mandates of this type ultimately harm consumers. 

III. Effectiveness of Non-Monetary Relief in FTC Orders

I’ll turn now to my second topic, the effectiveness of non-monetary settlements. In many 

enforcement actions for alleged violations of Section 5 of the FTC Act, the FTC enters into 

settlements that contain solely non-monetary relief. I believe that these consent decrees are an 

effective mechanism to bring companies into compliance and a sensible use of the agency’s

 

rulemaking history could be influencing Congressional comfort with vesting the FTC with additional privacy 

authority), https://www.iab.com/news/privacy-ftc-rulemaking-authority-a-historical-context/.
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scarce resources. Non-monetary settlements halt the deceptive or unfair conduct, impose liability 

on a company (and in some cases individuals), and include substantial conduct relief that 

constrains future behavior. In addition, by resolving Commission investigations with consents, 

we can free up staff resources to address other unlawful conduct. The FTC’s practice is not 

unique – the majority of federal cases end in settlement.20 Some of my Commissioner 

colleagues, however, have referred to these orders as “no money, no consequence” orders. They 

have argued that these cases amount to no more than “a slap on the wrist” and have asserted that 

the Commission should pursue litigation to obtain monetary relief.

21 But litigation entails the 

expenditure of substantial staff time, frequently requires costly expert testimony, and imposes 

significant opportunity costs. For this reason, I am reluctant to pursue litigation in federal district 

court when the conduct relief we can obtain through a non-monetary settlement provides full and 

meaningful relief, together with both specific and general deterrence.

Allow me to list just a few examples of the types of non-monetary relief the FTC has 

obtained in its consent decrees:

• Bans on participation in certain activities: in several matters, the Commission has

banned respondents from marketing or selling any weight loss product.22 And last 

year the Commission entered five consents against businesses banning them from 

 20 See Theodore Eisenberg & Charlotte Lanvers, What is the Settlement Rate and Why Should We Care?, 6 J.

EMPIR. LEG. STUD. 111, 132 (2009) (Table 5, finding that 66.9% of 2,966 cases filed between January 8, 2002 and 

July 8, 2002 in the Eastern District of Pennsylvania and the Northern District of Georgia settled, using Pacer data.) 21 Statement of Commissioner Rohit Chopra Joined by Commissioner Rebecca Kelly Slaughter In the Matter of 

Sunday Riley (Oct. 21, 2019), 

https://www.ftc.gov/system/files/documents/public_statements/1550127/192_3008_final_rc_statement_on_sunday_

riley.pdf; Statement of Commissioner Rohit Chopra In the Matter of Aromaflage (Sept. 27, 2018), 

https://www.ftc.gov/public-statements/2018/09/statement-commissioner-rohit-chopra-matter-aromaflage; Statement 

of Commissioner Rohit Chopra In the Matter of Sandpiper/PiperGear (Apr. 17, 2019), 

https://www.ftc.gov/system/files/documents/public_statements/1514787/sandpiper_chopra_dissenting_statement_4-

17-19.pdf. 22 See, e.g., In the Matter of John Matthew Dwyer III, C-4492 (2014);

https://www.ftc.gov/system/files/documents/cases/141024hlsdwyerdo.pdf; In the Matter of Norm Outfitters, C-4495 

(2014); https://www.ftc.gov/system/files/documents/cases/141110normthompsondo.pdf; In the Matter of Wacoal 

America, C-4496 (2014); https://www.ftc.gov/system/files/documents/cases/141110wacoal-americdo.pdf.
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using form contract provisions that preclude consumers from posting negative 

reviews online.23

• Bans on particular representations: in July 2020, the Commission entered a consent 

banning a respondent from making claims that certain products cure cancer.24

• Required disclosures: the Commission has required marketers of indoor tanning 

products or services to make disclosures about exposure to ultraviolet radiation and 

safety.25

• Requirements to implement compliance monitoring programs: in matters involving 

deceptive endorsements, the Commission has required that the endorsers disclose 

material relationships and also required the company to develop a program to 

monitor and review representations and disclosures and enforce compliance.

26

• Requirements to implement comprehensive privacy and/or data security programs: to 

remediate alleged privacy and data security violations, the Commission has required

 23 In the Matter of National Floors Direct, Inc. C-4684 (2019), https://www.ftc.gov/enforcement/casesproceedings/182-3085/national-floors-direct-inc; In the Matter of LVTR LLC C- 4679 (2019), 

https://www.ftc.gov/enforcement/cases-proceedings/182-3098/lvtr-llc; In the Matter of Shore to Please Vacations 

LLC C-4683 (2019), https://www.ftc.gov/enforcement/cases-proceedings/182-3088/shore-please-vacations-llcmatter; In the Matter of A Waldron HVAC, LLC C-4680 (2019), https://www.ftc.gov/enforcement/casesproceedings/182-3077/waldron-hvac-llc; In the Matter of Staffordshire Property Management, LLC C-4682 (2019), 

https://www.ftc.gov/enforcement/cases-proceedings/182-3084/staffordshire-property-management-llc-matter. 24 In the Matter of Marc Ching C-9394 2020) (banning respondents from making claims that certain products cure 

cancer), https://www.ftc.gov/enforcement/cases-proceedings/202-3110/marc-ching-matter. Similarly, the 

Commission banned a respondent from claiming a dietary supplement causes weight or fat loss and another 

respondent from making claims that its pest control product eliminates enumerated types of pests or protects areas 

from pests. See In the Matter of HealthyLife Sciences, Inc., C-4493 (2014) (dietary supplement), 

https://www.ftc.gov/system/files/documents/cases/141024healthylifesciencesdo.pdf; In the Matter of Wein Products, 

106 F.T.C. 51, 62 (1985) (pest control product). 25 In the Matter of Indoor Tanning Association, C-4290 (2010), 

https://www.ftc.gov/sites/default/files/documents/cases/2010/05/100519tanningdo.pdf; In the Matter of Sun 

Industries, Inc., 110 F.T.C. 511 (1988) (requiring notice of FDA warnings); see also In the Matter of Phusion 

Projects, LLC, C-4382 (2013), 

https://www.ftc.gov/sites/default/files/documents/cases/2013/02/130212phusiondo.pdf (requiring disclosures of 

alcohol facts for beverages). 26 See In the Matter of Creaxion Corp, et al., C-4669 (2019), https://www.ftc.gov/system/files/documents/cases/c4669_172_3067_inside_publications_decision_and_order_2-8-19.pdf; In the Matter of Lord & Taylor, Inc., C-4576 

(2016), https://www.ftc.gov/system/files/documents/cases/160523lordtaylordo.pdf; see also FTC v. Teami, LLC, 

No. 8:20-cv-518-T-33TGW (M.D. Fla. 2020) (requiring a monitoring program for endorsements).
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companies to establish, implement and maintain a comprehensive privacy and/or 

data security program. Among other obligations, companies must document the 

program in writing, designate an employee to coordinate and be responsible for the 

program, train employees and vendors, and implement processes to assess and 

document internal and external risks.

27

This non-monetary relief curtails behavior and requires sometimes fundamental changes in

the way companies do business. We also know that just because a settlement is non-monetary 

does not mean the respondent does not incur significant costs. Consent decrees also impose 

significant compliance costs on the parties – including staffing or procedural changes to ensure 

compliance; additional legal fees; substantiation expenses;

28 costs to execute consumer notices;29

and expensive third-party audits in privacy and data security orders.30

The Facebook settlement that the Commission announced last year provides a salient 

example of the costs of compliance with non-monetary relief. This settlement arose from 

allegations that Facebook violated the terms of the FTC’s 2012 order, and therefore resulted in a 

 27 See, e.g., In the Matter of LightYear Dealer Technologies, LLC, C-4687 (2019) (requiring a comprehensive data 

security program); https://www.ftc.gov/enforcement/cases-proceedings/172-3051/lightyear-dealer-technologies-llcmatter-0; In the Matter of James V. Grago, Jr., C-4678 (2019) (ordering company to implement a comprehensive 

information security program); 

https://www.ftc.gov/system/files/documents/cases/172_3003_clixsense_decision_and_order_7-2-19.pdf; In the 

Matter of Uber Technologies, Inc., C-4662 (2018) (mandating a comprehensive privacy program), 

https://www.ftc.gov/system/files/documents/cases/152_3054_c4662_uber_technologies_revised_decision_and_order.pdf. 28 See, e.g., In the Matter of Telomerase Activation Sciences, Inc., C-4644 (2018) (requiring human clinical testing 

to substantiate efficacy claims for covered products), https://www.ftc.gov/system/files/documents/cases/142_3103_-

_telomerase_decision_and_order_final.pdf. 29 See In the Matter of Unroll Me, Inc., C-4692 (2019) (requiring respondent to mail notices to consumers about how 

they use and share their information), https://www.ftc.gov/enforcement/cases-proceedings/172-3139/unrollme-incmatter; In the Matter of Benjamin Moore, C-4646 (2018) (requiring a notice to distributors regarding environmental 

and certification claims), 

https://www.ftc.gov/system/files/documents/cases/1623079_benjamin_moore_decision_and_order_updated_version

.pdf. 30 The order monitoring provisions in Commission orders also impose costs for recordkeeping, order distribution, 

corporate status notice, compliance reports, and responding to FTC information demands. See Orders at supra notes 

22-29.
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$5 billion civil penalty. Perhaps even more importantly, the order also includes significantly 

enhanced requirements for Facebook’s comprehensive privacy program, which are relevant to

this discussion.

31 Facebook itself acknowledged the seismic effect of these provisions – its CEO 

Mark Zuckerberg stated that the company was going to make “major structural changes” that 

would require the efforts of “hundreds of engineers and more than a thousand people across our 

company.”32

In addition to these compliance costs, non-monetary settlements impose reputational harm.

33

For example, the FTC recently issued a complaint alleging that Sunday Riley and her eponymous 

skincare company wrote and published fake product reviews. When the Commission 

simultaneously issued its proposed administrative order for public comment,

34 the Washington 

Post noted that Sunday Riley “is facing a public shaming that not even one of its best-selling 

 31 See Christine S. Wilson, “Remarks at the Global Antitrust Institute: FTC v. Facebook,” Arlington, VA (Dec. 11, 

2019) (describing the order enhancements in the Facebook settlement); see also In the Matter of Facebook, Inc. C4365 (2020) (order modifying prior administrative order), 

https://www.ftc.gov/system/files/documents/cases/c4365facebookmodifyingorder.pdf; U.S. v. Facebook, No. 19-cv2184 (D.D.C. 2019), https://www.ftc.gov/system/files/documents/cases/182_3109_facebook_order_filed_7-24-

19.pdf. 32 Mark Zuckerberg, Statement (July 24, 2019), https://www.facebook.com/zuck/posts/10108276550917411. 33 See Jonathan M. Karpoff & John R. Lott, Jr., The Reputational Penalty Firms Bear From Committing Criminal 

Fraud, 36 J. LAW & ECON 757, 758 (1993) (“. . .we present evidence that the reputational cost of corporate fraud is 

large and constitutes most of the cost incurred by firms accused or convicted of fraud... For a subset of firms on 

which we obtained sufficient data, just 6.5 percent of the loss represents court-imposed costs, with penalties and 

criminal fines accounting for 1.4 percent.”); Jonathan M. Karpoff et al., The Cost to Firms of Cooking the Books, 43 

J. FINANCIAL AND QUANTITATIVE ANALYSIS 581, 594 (2008) (Finding that only 8% of firms targeted by SEC 

settlements were assessed monetary penalties, while (from Table 6, at 593) the median firm targeted by the SEC lost 

31% of its value due to enforcement.); see also Pagliery, Jose, “Whistleblower accuses cybersecurity company of 

extorting clients,” CNN Business (May 7, 2015) (quoting CEO of LabMD stating that he refused to agree to an FTC 

administrative consent decree because “it would have tarnished his reputation and killed the business”), 

https://money.cnn.com/2015/05/07/technology/tiversa-labmd-ftc/index.html; Ruediger Bachmann et al., Firms and 

Collective Reputation: The Volkswagen Emission Scandal as a Case Study, NBER Working Paper, No. 26117, 9 

(2019) (summarizing sentiment analysis on Twitter data finding that positive statements about Volkswagen dropped 

while negative statements spiked immediately following the EPA’s September 18, 2015 serving of a Notice of 

Violation), available at https://www.nber.org/papers/w26117; J. Howard Beales, III and Timothy J. Muris, In 

Defense of the Pfizer Factors, George Mason Law & Economics Research Paper No. 12-49 (May 2012). Beales and 

Muris cite research indicating that “[t]he story the stock market appears to be telling is that an FTC complaint 

implies essentially a wiping out of the brand’s advertising capital.” Id. (citing Sam Peltzman, The Effects of FTC 

Advertising Regulation, 24 J.L. & ECON. 403 (1981)). 34 FTC administrative orders are placed on the public record for comment. Following the comment period, the 

Commission must vote to finalize the decree. The Commission has not finalized the Sunday Riley consent.
14

creams can smooth over.”35 The FTC’s proposed order holds liable not just the company but also 

Ms. Riley personally, prohibits both Ms. Riley and Sunday Riley Modern Skincare from making 

future misrepresentations (including through fake reviews), and requires them to instruct 

employees and agents about their legal responsibilities. Although Commissioner Chopra cited 

this order as another example of a “no money, no consequences” order, I disagree with his 

perspective. 

For confirmation of my perspective, one needs only to look at the lengths to which some 

companies will go to avoid being placed under order. Pom Wonderful is an apt example. The 

Commission filed an administrative complaint against Pom in September 2010. The case was 

litigated before the FTC’s Administrative Law Judge (ALJ) in 2011. The ALJ found that Pom 

made deceptive claims in violation of Section 5 and issued a decision and order. Pom appealed 

the decision to the Commission and the Commission issued an opinion in 2013.

36 Pom then 

appealed that decision to the D.C. Circuit Court of Appeals. In 2015 the D.C. Circuit ordered the 

Commission to modify one part of the Commission’s order and otherwise denied Pom’s 

petition.37 Pom then sought review by the U.S. Supreme Court, which was denied in 2016. It 

defies logic that Pom and similarly situated companies would invest so heavily in litigation to 

avoid non-monetary judgements if that relief were truly of no consequence.

 35 Beachum, Lateshia, “Skin-care company Sunday Riley settles FTC charges of fake product reviews,” Washington 

Post (Oct. 22, 2019), https://www.washingtonpost.com/business/2019/10/22/sunday-riley-wanted-take-out-skincarecompetition-so-it-had-employees-write-fake-reviews/, see also “FTC Hits Sunday Riley with Violations for Fake 

Reviews,” Global Cosmetic Industry Business Insider Magazine (Oct. 22, 2019) (stating that the “brand’s reputation 

has taken a significant hit”), https://www.gcimagazine.com/business/rd/regulatory/FTC-Hits-Sunday-Riley-withViolations-for-Faked-Sephora-Reviews--563624281.html; Krause, Amanda, “Sunday Riley won’t be punished for 

asking employees to post fake reviews of its skin-care products, but a new settlement is forcing the brand not to do it 

again” Insider (Oct. 21, 2019) (noting that the settlement is intended to ensure the brand’s employees “do not engage 

in similar allegedly illegal conduct in the future” and “will have to follow some new rules”),

https://www.insider.com/sunday-riley-fake-reviews-federal-trade-commission-settlement-2019-10. 36 POM Wonderful LLC and Roll Global, LLC Case Timeline: https://www.ftc.gov/enforcement/casesproceedings/082-3122/pom-wonderful-llc-roll-global-llc-matter. 37 POM Wonderful LLC, et al. Case Timeline: https://www.ftc.gov/enforcement/cases-proceedings/pom-wonderfulllc-et-al. 
15

Non-monetary orders also may limit business opportunities. In the most extreme cases, 

businesses that are subject to consents end up selling off assets and even going out of business 

following entry of an order.38 In other instances, entire lines of business may be foreclosed by 

some orders. For example, the FTC has banned respondents from marketing or selling weight 

loss products.39 And the fact that a company is under order serves as a red flag to third parties –

respondents may have difficulty securing credit or financial services, vendors or supplies, 

corporate or institutional investors, and highly accomplished employees and executives.40

Existing franchisees may lose their businesses, as some franchise agreements grant franchisors 

the right to terminate franchisees subject to civil, criminal, or administrative liability. And 

franchisors may be unsuccessful in securing franchisees, as disclosure of prior law enforcement 

actions may chill prospective purchasers.

41

Non-monetary settlements also deter respondents from further violations. Orders impose 

reporting requirements that enable the FTC to monitor parties’ compliance with order provisions, 

and our Division of Enforcement closely tracks the activities of parties under order. Moreover, 

 38 See, e.g., In the Matter of Serious Energy, Inc., No. C-4359 (2012), https://www.ftc.gov/enforcement/casesproceedings/112-3001/serious-energy-inc; McCombe, Patrick, “Serious Materials Exits the High-Performance 

Window Business,” Green Building News (Oct. 31, 2012) (reporting that Serious Energy plants closed and business 

sold), https://www.greenbuildingadvisor.com/article/serious-materials-exits-the-high-performance-windowbusiness; In the Matter of Gorell Enterprises, Inc., No. C-4360 (2012), https://www.ftc.gov/enforcement/casesproceedings/112-3053/gorell-enterprises-inc-matter; Spencer, Malia, “Gorell Windows & Doors bought by Ohio 

company,” Pittsburgh Business Times (Feb. 15, 2012) (reporting that plants and businesses were closed), 

https://www.bizjournals.com/pittsburgh/news/2012/02/15/gorell-windows-doors-bought-by-ohio.html. 39 See supra n.22. 40 See American Bar Association Section of Antitrust Law, “Presidential Transition Report: The State of Antitrust 

Enforcement,” (Jan. 2017) (detailing the enormous damage an FTC action can cause a company or individual

indefinitely branding a respondent as wrongdoers, including affecting abilities to secure finance sources, vendors, or 

investors); see also Pagliery, Jose, “Whistleblower accuses cybersecurity company of extorting clients,” CNN 

Business (May 7, 2015) (quoting CEO of LabMD stating that he refused to agree to an FTC administrative consent 

decree because “it would have tarnished his reputation and killed the business anyway”), 

https://money.cnn.com/2015/05/07/technology/tiversa-labmd-ftc/index.html; Ernest Gellhorn, Adverse Publicity by 

Administrative Agencies, 86 HARV. L.REV. 1380, 1388-93 (1973) (discussing the adverse effects on businesses from 

press announcements of FTC administrative actions), available at: 

https://www.acus.gov/sites/default/files/documents/1973-01%20Adverse%20Agency%20Publicity.pdf. 41 Disclosure Requirements and Prohibitions Concerning Franchising, 16 C.F.R. 436.5(c) (requiring disclosures of 

litigation, pending or prior actions); https://www.ecfr.gov/cgi-bin/textidx?SID=74fbb9eba307a167b88ae7abbf92b42a&mc=true&node=se16.1.436_15&rgn=div8. 
16

parties are subject to civil penalties and equitable relief for violations of administrative orders.

The burden of proof to demonstrate order violations is lower for the FTC than in contempt cases 

for violations of district court orders – preponderance of the evidence as opposed to a clear and 

convincing standard.

42

Moreover, non-monetary settlements provide general deterrence to industry. FTC 

enforcement actions signal to others in the industry the FTC’s resolve to hold bad actors to 

account, and underscore the applicable legal standards to follow so as to avoid running afoul of 

the law.43 In fact, many practitioners attend this conference for the purpose of learning more 

about FTC enforcement actions so as to counsel your clients more effectively about their legal 

obligations. Scholars have noted that in the wake of FTC enforcement, “[r]esponsible companies 

will have little choice but to conform to the new standards to avoid the risk of Commission 

challenges, which have substantial adverse effects on capital market values.”44

 42 Although we do not have public data on compliance rates with FTC orders, enforcement data in other industries 

supports the deterrent effect of non-monetary relief. The available evidence demonstrates that monetary penalties in 

settlements may constitute only a small portion of the overall cost to the targeted firm. See Jonathan M. Karpoff & 

John R. Lott, Jr., The Reputational Penalty Firms Bear From Committing Criminal Fraud, 36 J. LAW & ECON 757, 

758 (1993) (“. . .we present evidence that the reputational cost of corporate fraud is large and constitutes most of the 

cost incurred by firms accused or convicted of fraud... For a subset of firms on which we obtained sufficient data, 

just 6.5 percent of the loss represents court-imposed costs, with penalties and criminal fines accounting for 1.4 

percent.”); Jonathan M. Karpoff et al., The Cost to Firms of Cooking the Books, 43 J. FINANCIAL AND 

QUANTITATIVE ANALYSIS 581, 594 (2008) (finding that only 8% of firms targeted by SEC settlements were assessed 

monetary penalties, while (from Table 6, at 593) the median firm targeted by the SEC lost 31% of its value due to 

enforcement.); see also Ruediger Bachmann et al., Firms and Collective Reputation: The Volkswagen Emission 

Scandal as a Case Study, NBER Working Paper, No. 26117, 9 (2019) (summarizing sentiment analysis on Twitter 

data finding that positive statements about Volkswagen dropped while negative statements spiked immediately 

following the EPA’s September 18, 2015 serving of a Notice of Violation), available at 

https://www.nber.org/papers/w26117. 43 For example, after the announcement of the Sunday Riley order the press referred to an “FTC crackdown” and 

noted, for example, that “it would be naïve for companies to not start adjusting to the new standard now.” Brumley, 

James “What Might The FTC’s Crackdown On Deceptive Online Marketing Mean for Social Media Companies?” 

The Motley Fool (Oct. 29, 2019), https://www.fool.com/investing/2019/10/29/what-might-the-ftcs-crackdown-ondeceptive-online.aspx; see also Blog Post: Alexandra Mergaris, Consumer Review Fraud Top of FTC’s Priority List, 

All About Advertising Law (Oct. 28, 2019) (noting that “the threat of an enforcement action and steep civil penalties 

have both a specific and general deterrent effect”), https://www.allaboutadvertisinglaw.com/2019/10/customerreview-fraud-top-of-ftcs-priority-list.html. 44 Beales and Muris, supra n.33 at 37. In the months following the announcement of the Sunday Riley proposed 

consent, a national law firm has held training sessions for its corporate clients on how to use endorsements and 

reviews to promote products and services consistent with FTC law. See, e.g.,Venable LLP: Consumer Reviews: The 
17

One notable example can be found in the FTC’s privacy and data security orders. Absent 

baseline privacy and data security legislation at the federal level, the FTC’s orders have played a 

major role in setting the standards for industry. Professor Daniel Solove at the George 

Washington University Law School has explained that the FTC’s settlements have created a 

common law of privacy. “[C]ompanies look to these agreements to guide their privacy practices. 

Thus, in practice FTC privacy jurisprudence has become the broadest most influential regulating 

force on information privacy in the United States – more so than nearly any privacy statute or 

any common law tort.”45 Almost all of these orders entail only injunctive relief, not monetary 

relief.

Accordingly, I believe that non-monetary settlements are of great consequence to 

respondents and a highly useful enforcement tool.

IV. Individual Liability

Turning to individual liability, the FTC sometimes seeks to hold individuals liable in its 

enforcement actions. Over the past two years, members of the Commission, including me, have 

discussed the circumstances we view as appropriate for holding individuals liable. For example, 

in the recent Progressive Leasing matter, a case challenging deceptive practices in rent-to-own 

agreements, Commissioner Slaughter and I wrote statements detailing opposing views on 

individual liability.46 The Commission declined to name the CEO in that case. At approximately 

 

Dos and Don’ts (March 26, 2020), https://www.venable.com/insights/events/2020/03/customer-reviews-the-dosand-donts. 45 Daniel J. Solove and Woodrow Hartzog, The FTC and the New Common Law of Privacy, 114 COLUMBIA L. REV.

583 (2014); see also Organizational Accountability in Light of FTC Consent Orders, Centre for Information Policy 

Leadership (Nov. 13, 2019) (discussing how FTC consent orders have precedential effect beyond the target of the 

investigation and set forth all of the elements of organizational accountability for privacy and data security), 

https://www.informationpolicycentre.com/uploads/5/7/1/0/57104281/cipl_white_paper_-

_organizational_accountability_in_light_of_ftc_consent_orders__13_november_2019_.pdf/. 46 See Statement of Commissioner Christine S. Wilson Regarding FTC v. Progressive Leasing (Apr. 20, 2020) 

(discussing individual liability), https://www.ftc.gov/public-statements/2020/04/statement-commissioner-christine-swilson-regarding-ftc-v-progressive; see also Dissenting Statement of Commissioner Rebecca Kelly Slaughter 
18

the same time the Commission was considering Progressive Leasing, the Commission voted out 

another matter, Fleet Cor, in which we named the individual. The case is currently in litigation so

I will refrain from discussing the merits. I will say only that I voted no in that matter and that the 

Fleet Cor complaint names the CEO.

My statement in Progressive Leasing explained the relevant legal standard for individual 

liability and its implications. To seek injunctive relief with respect to a CEO or other principal, 

the Commission must show only that the individual “participated directly in the deceptive 

practices or had authority to control those practices.

47 This broad standard effectively could 

enable the Commission to hold individually liable the CEOs of most companies against which 

we initiate enforcement action. As a practical matter, though, the Commission traditionally has 

exercised its prosecutorial discretion and considered a variety of factors when deciding whether 

to name a CEO or principal. 

One important factor is whether individual liability is necessary to obtain effective relief. In 

some instances, for example, the CEO is the company – many FTC cases involve fraudulent or 

deceptive conduct by small, closely held companies that essentially serve as the alter egos of 

their CEO or principal. In other instances, fraudsters open and shutter companies to stay one step 

ahead of law enforcement, or undertake unlawful practices using multiple companies that operate 

as a common enterprise. In these circumstances, the Commission traditionally – and 

appropriately – has included the CEOs or principals in the enforcement action. I support naming 

 

Regarding FTC v. Progressive Leasing (Apr. 20, 2020), 

https://www.ftc.gov/system/files/documents/public_statements/1571915/182_3127_prog_leasing_-

_dissenting_statement_of_commissioner_rebecca_kelly_slaughter_0.pdf. 47 FTC v. Ross, 743 F.3d 886, 892-93 (4th Cir. 2014) (adopting the test for individual liability used by other federal 

appellate courts, including the First, Seventh, Ninth, Tenth, and Eleventh Circuits). The Commission also can 

establish liability for monetary relief by showing the defendant “had actual knowledge of the deceptive conduct, was 

recklessly indifferent to its deceptiveness, or had an awareness of a high probability of deceptiveness and 

intentionally avoided learning the truth.” Id.
19

the CEO or principal in these circumstances because doing so is necessary to obtain effective 

relief and protect consumers going forward.

In contrast, naming the CEO or principal of a large, established company, in my view, will

only rarely (if ever) be necessary to obtain effective relief. As I observed in my statement in 

Progressive Leasing, the currently popular notion of routinely imposing individual liability48 –

not just at the FTC, but elsewhere – appears more consistent with vilification of successful 

businesspeople than with an objective desire to obtain effective relief and instill effective 

deterrence. 

When evaluating whether naming the CEO or other principal is needed for effective relief, I 

also evaluate – among other things – the degree of that individual’s participation in the 

challenged practices. In larger companies, the number of issues crossing a CEO’s desk is 

substantial and the CEO often is not directly supervising or managing the infinite details 

pertaining to many aspects of the business. Thus, in many instances, the CEO will have little to 

no involvement, and in some cases no direct knowledge, of the practices that are the subject of 

an FTC investigation. 

My decades in the private sector have taught me that a culture of compliance must begin 

at the top; a CEO committed to legal compliance drives accountability throughout the 

organization. Accordingly, another factor I consider when determining whether individual 

liability is appropriate pertains to the CEO’s role in fostering compliance at the relevant 

company. In fact, naming a CEO in those circumstances could send the message that it is better 

 48 See Nguyen, Stephanie, “Moving Beyond Consent Models in Privacy Legislation,” Digital Labs at Consumer 

Reports (Aug. 2020) (describing a recent Public Knowledge panel discussion in which panelists discussed 

accountability and proposals to send corporate leadership to prison if they lie about or violate people’s privacy), 

https://medium.com/cr-digital-lab/moving-beyond-consent-models-in-privacy-legislation-2231cca9e356; see also 

Levin, Bess, “Elizabeth Warren Wants To Make It Easier To Throw C.E.O.S In Prison,” Vanity Fair (Apr. 3, 2019), 

https://www.vanityfair.com/news/2019/04/elizabeth-warren-wants-to-make-it-easier-to-throw-ceos-in-prison. 
20

for a CEO to be uninvolved and disengaged – clearly a suboptimal outcome given that a culture 

of compliance is strongest when compliance is prioritized by the CEO. 

Alternatively, naming a CEO in those circumstances could send the opposite message –

that the CEO himself is ultimately responsible for all failings even if he has undertaken 

objectively reasonable measures to ensure that his company follows the law. At the margins, this 

outcome could incentivize CEOs to devote an inefficient amount of time to compliance, at the 

expense of core business issues. In either scenario, CEO positions at firms posing the greatest 

risk will be the least appealing, deterring qualified and conscientious CEOs from accepting 

employment at the firms that need them most. 

I also believe that there are other ways to build accountability into an order without 

naming the CEO. For example, the certification provisions in the Facebook settlement were 

designed to create accountability – Mark Zuckerberg personally must certify, on a quarterly 

basis, that Facebook is complying with the revised and augmented order. And finally, it is 

important to note that CEOs are ultimately accountable to their Boards of Directors (which 

typically establish senior management compensation), to their shareholders and the market, and 

to their many stakeholders, including employees and customers. 

For these reasons, I will continue carefully to scrutinize the circumstances under which 

the Commission is considering holding individuals liable, and will only support that approach 

where it is necessary for effective relief.

V. Conclusion

Thank you for your time today. I am disappointed that we cannot be together in person, due 

to the pandemic sweeping the globe. But when I next see you again in person, I hope to be 

walking without a limp – and I hope to be able to reassure you that the FTC has avoided taking 
21

two steps back, and is instead moving full speed ahead with sound consumer protection 

enforcement. 

Take care, everyone.