UNITED STATES OF AMERICA

Federal Trade Commission

WASHINGTON, D.C. 20580

Office of the Chair

1

Remarks of Chair Lina M. Khan

Regarding the Advance Notice of Proposed Rulemaking on Earnings Claims

Commission File No. R111003 

February 17, 2022

False earnings claims routinely mislead Americans into investing thousands of dollars 

into opportunities that turn out to be a sham. Be it misleading claims about multilevel marketing 

schemes that lure in aspiring entrepreneurs, false marketing from for-profit schools targeted at 

hopeful students, or deceptive representations from “gig” platforms that draw workers, the cost 

of these false claims can be devastating, losing people money and time and saddling them with 

debt. The economic precarity spurred for many by the pandemic has further created an 

environment ripe for these tactics, where fraudsters can use false claims to prey on Americans 

seeking additional income or a new job.

1 These tactics can also harm law-abiding businesses, 

who may lose out to rivals that are winning customers through deceptive claims.

The Commission has well-established legal authority to challenge deceptive earnings 

claims under Section 5 of the FTC Act. Since 2000, the FTC has brought over 129 enforcement 

actions against a wide array of companies making deceptive earnings claims, collecting more 

than $530 million for redress to Americans.2

The FTC’s enforcement work has highlighted the heavy costs of false earnings claims.

One area where these deceptive earnings claims can hit especially hard is in the “gig” economy, 

where information and power asymmetries between platform companies and their workers can 

be especially ripe for abuse. For example, in 2017, the FTC found that Uber had been 

exaggerating the yearly and hourly income that drivers could earn.

3 Uber ultimately agreed to 

pay $20 million to resolve the charges—the entirety of which went towards providing refunds to 

harmed drivers.4 Last year, the agency also took action against Amazon for deceiving drivers 

who deliver packages through Amazon Flex.5 Despite claiming that drivers would “receive 

100% of the tips” they earned, Amazon pocketed over $60 million in tips that rightfully belonged 

1 Stopping COVID-19 Fraud and Price Gouging, Hearing Before the Subcomm. On Consumer Prot., Product 

Safety, and Data Security of the S. Comm. on Com., Sci., and Transp., 117th Cong. (2022) (statement of Samuel 

Levine, Director, Fed. Trade Comm’n. Bureau of Consumer Prot.), available at 

https://www.ftc.gov/system/files/documents/public_statements/1600629/p210100stoppingcovid19fraudpricegouging

testimony.pdf. 2 Melissa Dickey, Attorney, Fed. Trade Comm’n, Presentation on Advanced Notice of Proposed Rulemaking 

Concerning Earnings Claims at FTC Open Commission Meeting (Feb. 17, 2021) (to be published at 

https://www.ftc.gov/news-events/events-calendar/open-commission-meeting-february-17-2022). 3 Press Release, FED. TRADE COMM’N., Uber Agrees to Pay $20 Million to Settle FTC Charges That It Recruited 

Prospective Drivers with Exaggerated Earnings Claims (Jan. 19, 2017), https://www.ftc.gov/news-events/pressreleases/2017/01/uber-agrees-pay-20-million-settle-ftc-charges-it-recruited. 4 Id. 5 Press Release, FED. TRADE COMM’N., Amazon To Pay $61.7 Million to Settle FTC Charges It Withheld Some 

Customer Tips from Amazon Flex Drivers (Feb. 2, 2021), https://www.ftc.gov/news-events/pressreleases/2021/02/amazon-pay-617-million-settle-ftc-charges-it-withheld-some.
2

to over 140,000 drivers. Amazon settled with the FTC, agreeing to turn over the full amount of 

the wrongly withheld tips for redress to the affected drivers.6

Evidence suggests that gig workers are disproportionately likely to be people of color, 

immigrants, or from other marginalized groups—communities already reeling from the effects of 

the deadly pandemic.7 I am also concerned by how false claims can aid firms in amassing market 

power and locking-in users, and how that market power, turn, may also enable deceptive claims.

8

In the Commission’s prior actions, the money won back for harmed consumers generally 

relied on our 13(b) authority, a path that is no longer available to the FTC after the Supreme 

Court’s decision in AMG.

9 In the wake of this loss, the Commission has been identifying 

additional ways it can use its broader toolkit and authorities to secure redress and penalties for 

lawbreakers. For example, in October 2021, the Commission put more than 1,100 businesses on 

notice, reminding them that making misleading moneymaking claims as established in case 

precedent could incur significant civil penalties.10

Codifying a rule like we propose today will enable us to return money to injured 

consumers in future cases like these. While a legislative fix to Section 13(b) remains a key 

priority for the agency, a potential rule against misleading earnings claims will enable us to 

return money to injured consumers when they have been harmed by small fraudsters and 

dominant firms alike. I strongly support staff’s recommendation to initiate this rulemaking. I

look forward to comments and engagement from the public as we pursue this rulemaking effort. 

***

6 Id. 7 See Risa Gelles-Watnick & Monica Anderson, Racial and Ethnic Differences Stand Out In the U.S. Gig 

Workforce, PEW RSCH. CTR. (Dec. 15, 2021), https://www.pewresearch.org/fact-tank/2021/12/15/racial-and-ethnicdifferences-stand-out-in-the-u-s-gig-workforce/; Chris Benner, et al., On-demand and On-the-edge: Ride-hailing 

and Delivery Workers in San Francisco, UC SANTA CRUZ (May 5, 2020), https://transform.ucsc.edu/wpcontent/uploads/2020/05/OnDemand-n-OntheEdge_MAY2020.pdf. 8 See Deception As an Antitrust Violation, 125 HARV. L. REV. 1235 (2012); Maurice E. Stucke, When a Monopolist 

Deceives, 76 ANTITRUST L.J. 823 (2010). 9 AMG Capital Management, LLC v. FTC, 141 S.Ct. 1341 (Apr. 2021). 10 Press Release, FED. TRADE COMM’N., FTC Puts Businesses on Notice that False Money-Making Claims Could 

Lead to Big Penalties (Oct. 26, 2021), https://www.ftc.gov/news-events/press-releases/2021/10/ftc-puts-businessesnotice-false-money-making-claims-could-lead.