PREPARED STATEMENT OF THE FEDERAL TRADE COMMISSION:

THE URGENT NEED TO FIX SECTION 13(b) OF THE FTC ACT

Before the

COMMITTEE ON ENERGY AND COMMERCE

SUBCOMMITTEE ON CONSUMER PROTECTION AND COMMERCE

UNITED STATES HOUSE OF REPRESENTATIVES

WASHINGTON, D.C.

APRIL 27, 2021
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I. INTRODUCTION

Chair Schakowsky, Ranking Member Bilirakis, and Members of the Subcommittee, I am 

Rebecca Kelly Slaughter, Acting Chairwoman of the Federal Trade Commission, and I am

pleased to appear before you today. In this testimony, we express our gratitude for the 

introduction of H.R. 2668 and explain why legislation is so urgently needed to address legal 

challenges to critical authority that enables the FTC to do its job of protecting consumers and 

competition.

House bill 2668, which Congressman Cárdenas introduced last week, addresses the two 

significant judicial limitations to Section 13(b) of the FTC Act. First, late last week, the Supreme 

Court ruled that courts can no longer award refunds to consumers in FTC cases brought under 

13(b), reversing four decades of case law that the Commission has used to provide billions of 

dollars of refunds to harmed consumers. Second, some courts recently have ruled that the 

Commission cannot seek injunctive relief under 13(b) in cases where the unlawful conduct is no 

longer occurring, even if there is a reasonable likelihood that it will re-occur. The discussion 

below elaborates on these challenges and illustrates why we so appreciate that, with the 

introduction of H.R. 2668, Congress is acting to clarify one of the FTC’s most essential tools.

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II. LEGISLATION IS NEEDED TO ENSURE EQUITABLE MONETARY 

RELIEF UNDER SECTION 13(b) OF THE FTC ACT 

Over the past four decades, the Commission has relied on Section 13(b) of the Federal 

Trade Commission Act to secure billions of dollars in relief for consumers in a wide variety of 

cases, including telemarketing fraud, anticompetitive pharmaceutical practices, data security and 

privacy, scams that target seniors and veterans, and deceptive business practices, among many 

 

1 This written statement presents the views of the Federal Trade Commission. The oral statements and responses to 

questions do not necessarily reflect the views of the Commission or any other Commissioner. 
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others.2 More recently, in the wake of the pandemic, the FTC has used Section 13(b) to take 

action against entities operating COVID-related scams.3 Section 13(b) enforcement cases have 

resulted in the return of billions of dollars to consumers targeted by a wide variety of illegal 

scams and anticompetitive practices, including $11.2 billion in refunds to consumers during just 

the past five years.4 Section 13(b) is a critical tool in support of our enforcement missions, but its 

effectiveness has been substantially curtailed by recent judicial decisions, which have 

significantly weakened the Commission’s ability to protect consumers from deceptive, unfair, or 

anticompetitive practices. 

Section 13(b) of the FTC Act has been the agency’s primary and most effective way of 

returning money to consumers that was unlawfully taken from them. The relevant portion of 

Section 13(b), often referred to as the “second proviso,” authorizes the FTC to sue directly in 

federal court for violations of the FTC Act and states that “in proper cases, the Commission may 

seek, and after proper proof, the court may issue, a permanent injunction.”5 Beginning in the 

1980s, seven of the twelve courts of appeals, relying on longstanding Supreme Court precedent, 

interpreted the language in Section 13(b) to authorize district courts to award the full panoply of 

equitable remedies necessary to provide complete relief for consumers, including disgorgement 

and restitution of money. For decades, no court held to the contrary. In 1994, Congress ratified 

 

2 15 U.S.C. § 53(b).

3 See, e.g., FTC Press Release, FTC Sues California Marketer of $23,000 COVID-19 “Treatment” Plan, 

https://www.ftc.gov/news-events/press-releases/2020/07/ftc-sues-california-marketer-23000-covid-19-treatmentplan (July 31, 2020).

4 See Tableau, FTC Refunds to Consumers, 

https://public.tableau.com/profile/federal.trade.commission#!/vizhome/Refunds_15797958402020/RefundsbyCase.

5 15 U.S.C. § 53(b).
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its intent to enable the FTC to obtain monetary remedies when it expanded the venues available 

for FTC enforcement cases, strengthening the Commission’s ability to bring redress cases.6

Recent judicial rulings, however, indicate a dramatic shift in how courts are interpreting 

and applying Section 13(b) in FTC cases. For example, in 2019, the Seventh Circuit, in FTC v. 

Credit Bureau Center, LLC,

7 overruled its three decades of precedent and held that Section 13(b) 

no longer allows the FTC to obtain monetary relief. The Credit Bureau Center opinion held that 

the word “injunction” in the statute allows only behavioral restrictions and not monetary 

remedies. Last fall, the Third Circuit, in FTC v. AbbVie Inc.,

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relying heavily on the analysis in 

Credit Bureau Center, similarly concluded that the Commission could not obtain any monetary 

relief under Section 13(b). In AbbVie, for example, the court held that the defendant drug 

company violated the antitrust laws by engaging in sham litigation to keep out generic 

competition, but it nonetheless reversed the district court’s award of $448 million meant to repay 

overcharged consumers. The net effect of the AbbVie ruling is that an adjudicated violator is 

nonetheless free to keep enormous ill-gotten profits extracted from consumers, based on a legal 

interpretation of Section 13(b) that no court of appeals had adopted before 2019.

This dramatic shift culminated in last week’s decision by the U.S. Supreme Court in 

AMG Capital Management, LLC v. FTC, which held that equitable monetary relief such as 

 

6 Federal Trade Commission Act Amendments of 1994, S. Rep. No. 103-130, at 15–16, as reprinted in 1994 

U.S.C.C.A.N. 1776, 1790–91. As the Senate Report noted, “Section 13 of the FTC Act authorizes the FTC to file 

suit to enjoin any violation of the FTC Act. The FTC can go into court ex parte to obtain an order freezing assets, 

and is also able to obtain consumer redress. . . . The FTC has used its section 13(b) injunction authority to counteract 

consumer fraud, and the Committee believes that the expansion of venue and service of process in the reported bill 

should assist the FTC in its overall efforts.” Id.

7 FTC v. Credit Bureau Center, LLC, 937 F.3d 764 (7th Cir. 2019).

8 FTC v. AbbVie Inc., 976 F.3d 327 (3d Cir. 2020).
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restitution or disgorgement is not authorized by the text of Section 13(b).

9 That is why we call on 

you to fix our statute to clarify the FTC’s tools.

III. LEGISLATION IS ALSO NEEDED TO ENSURE THAT THE FTC CAN 

KEEP HARMFUL CONDUCT FROM RE-OCCURRING

In addition to the decisions that eliminate the FTC’s ability to use 13(b) to return money 

to consumers, two other recent Third Circuit decisions reinterpreting Section 13(b) jeopardize 

the FTC’s ability to enjoin illegal conduct in federal court. In FTC v. Shire ViroPharma, Inc., a 

case involving a drug company’s alleged abuse of the FDA’s citizen-petition process to delay 

generic competition, the court held that the FTC can bring enforcement actions under Section 

13(b) only when a violation is either ongoing or “impending” at the time the suit is filed.10 That 

decision unnecessarily limits the Commission’s ability to obtain injunctive relief for consumers 

who have been harmed by unlawful conduct that occurred entirely in the past. And, in the Third 

Circuit’s decision in FTC v. AbbVie, the court cited Shire ViroPharma in dicta while agreeing 

that the FTC cannot sue under Section 13(b) unless conduct is imminent or ongoing.11 Notably, 

in its motion to dismiss the Commission’s antitrust complaint, Facebook has cited these 

decisions and argued that Section 13(b) bars the federal court suit.12

These decisions hamper the Commission’s longstanding ability to protect consumers by 

enjoining defendants from resuming their unlawful activities when the conduct has stopped but 

there is a reasonable likelihood that the defendants will resume their unlawful activities in the 

 

9 See AMG Capital Mgmt., LLC v. FTC, No. 19-508, 593 U.S. ___, slip op. (Apr. 22, 2021), 

https://www.supremecourt.gov/opinions/20pdf/19-508_l6gn.pdf. AMG was an appeal by defendants from a 2018

Ninth Circuit ruling in which the court re-affirmed its precedent interpreting Section 13(b) to allow the FTC to 

obtain monetary relief, a judgment that the Supreme Court reversed. See FTC v. AMG Capital Mgmt., LLC, 910 F.3d 

417 (9th Cir. 2018).

10 FTC v. Shire ViroPharma, Inc., 917 F.3d 147 (3d Cir. 2019).

11 AbbVie, 976 F.3d at 376. 

12 Memorandum in Support of Facebook, Inc.’s Motion to Dismiss FTC’s Complaint, FTC v. Facebook, Inc., Case 

No. 1:20-cv-03590-JEB (D.D.C.).
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future. These decisions also limit the FTC’s ability to settle cases efficiently. Targets of FTC 

investigations now routinely argue that they are immune from suit in federal court because they 

are no longer violating the law, despite a likelihood of re-occurrence, and they make these 

arguments even when they stopped violating the law only after learning that the FTC was 

investigating them. 

Overall, these recent decisions have significantly limited the Commission’s primary and 

most effective tool for providing refunds to harmed consumers, and, if Congress does not act 

promptly, the FTC will be far less effective in its ability to protect consumers and execute its law 

enforcement mission. 

IV. CONCLUSION

We respectfully request that Congress act to clarify Section 13(b) of the FTC Act and 

revive the FTC’s ability to enjoin illegal conduct and return to consumers money they have lost, 

which will greatly assist our efforts to protect consumers. 

We look forward to continuing to work with the Subcommittee, Committee, and 

Congress, and we would be happy to answer your questions.