PREPARED STATEMENT OF THE FEDERAL TRADE COMMISSION: 

STRENGTHENING THE FEDERAL TRADE COMMISSION’S AUTHORITY TO 

PROTECT CONSUMERS 

Before the 

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

WASHINGTON, DC 

APRIL 20, 2021 
 

 

I. INTRODUCTION 

Chair Cantwell, Ranking Member Wicker, and Members of the Committee, we are 

pleased to appear before you today.1

 Despite the unprecedented challenges of the past year, the 

Federal Trade Commission (Commission or FTC) has endeavored to protect consumers and 

competition. A key part of this work has been combatting COVID-related harms. The 

Commission staff recently released a report describing the major challenges consumers face from 

the pandemic and the Commission’s efforts to help: using reports from consumers to identify and 

respond to emerging unlawful practices in real time; filing more than a dozen law enforcement 

cases; directing the removal of deceptive claims related to COVID-19 made by more than 350 

companies; and educating consumers and businesses through more than 100 alerts on COVIDrelated topics. 

The civil penalty authority in the newly-enacted COVID-19 Consumer Protection Act2 

and additional funding the Commission recently received from the American Rescue Plan will 

enable us to intensify our efforts to protect consumers from unscrupulous actors that seek to 

exploit the pandemic and its economic fallout. The Commission just brought its first action 

seeking monetary penalties under its new authority, targeting deceptive COVID-19 marketing of 

vitamin D and zinc products.3 

In this testimony, we provide a high-level summary of the Commission’s efforts and 

highlight the pressing need, in light of legal challenges, for Congress to affirm the FTC’s 

authority to return money to consumers using Section 13(b) of the Federal Trade Commission 

1

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

questions reflect the views of individual Commissioners, and do not necessarily reflect the views of the Commission 

or any other Commissioner. 

2

 Pub. L. No. 116-260, 134 Stat. 1182, Division FF, Title XIV, § 1401(b)(1). 3

 FTC Press Release, In First Action Under COVID-19 Consumer Protection Act, FTC Seeks Monetary Penalties for 

Deceptive Marketing of Purported Coronavirus Treatments, https://www.ftc.gov/news-events/pressreleases/2021/04/first-action-under-covid-19-consumer-protection-act-ftc-seeks (April 15, 2021). 

1 
 

 

Act. 

II. COVID-19 CONSUMER PROTECTION EFFORTS 

The Commission has worked diligently to identify and address the effects of the COVID19 pandemic on American consumers and businesses. The Commission’s response to COVID-19 

has included law enforcement, consumer education and outreach, and data collection, each of 

which is discussed in more detail below. 

a. Law Enforcement 

Most recently, the FTC deployed its new authority under the COVID-19 Consumer 

Protection Act to charge that a chiropractor and his company deceptively marketed products 

containing vitamin D and zinc as scientifically proven to treat or prevent COVID-19.4

 This 

action is merely the latest in a long line of enforcement efforts that began early in the pandemic. 

The FTC issued its first warnings to consumers about COVID-19 related scams in February 

2020, even before the declaration of a national emergency.5

 As schemes proliferated in response 

to demand for scarce goods, to peddle treatments and cures, and to exploit consumers’ and small 

businesses’ financial distress, the FTC moved quickly to challenge deceptive claims. The agency 

filed its first action6

 just one month after the President declared a national emergency concerning 

the COVID-19 outbreak on March 13, 2020.7

 Since then, the FTC has sued entities for allegedly 

4 See supra n. 3. 5 Coronavirus: Scammers follow the headlines, https://www.consumer.ftc.gov/blog/2020/02/coronavirus-scammersfollow-headlines (Feb. 10, 2020). 6

 Complaint, FTC v. Ponte Investments, LLC, Case No. 1:20-cv-00177 (D.R.I.), available at 

https://www.ftc.gov/system/files/documents/cases/sbacomplaint.pdf. The FTC alleged that the company falsely 

claimed an affiliation with the U.S. Small Business Administration (SBA) and marketed themselves to small 

businesses as an approved lender under SBA’s Paycheck Protection Program (PPP). 7 Proclamation 9994 of March 13, 2020, available at https://www.govinfo.gov/content/pkg/FR-2020-03-

18/pdf/2020-05794.pdf. 

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breaking promises to quickly ship personal protective equipment (PPE) and cleaning products,8 

tricking consumers into paying for sanitizing products that were never delivered,9 falsely 

claiming that their products could treat and/or prevent COVID-19,10 and making deceptive 

claims regarding stimulus benefits.11 In addition, to protect consumers attempting to replace or 

supplement income during the pandemic, the Commission—along with 19 federal, state, and 

local partners—led a nationwide crackdown against scams making false promises of income and 

financial independence.12 

Starting in March 2020, the FTC also launched a campaign to challenge companies’ 

deceptive COVID-19 claims—directing the companies to cure violations and pursuing 

enforcement actions if problematic claims were not quickly removed. To date, the FTC has 

issued more than 350 warning letters, many in conjunction with the Food and Drug 

Administration (FDA), to sellers and marketers that claimed that their products could treat or 

8

 Complaint, FTC v. SuperGoodDeals.com, Inc., Case No. 20-cv-3027 (E.D.N.Y.), available at 

https://www.ftc.gov/system/files/documents/cases/202_3135_supergooddeals_-_complaint.pdf; Complaint, FTC v. 

QYK Brands LLC, Case No. 8:20-cv-01431-JLS-KES (C.D. Cal.), available at 

https://www.ftc.gov/system/files/documents/cases/202_3147_qyk_brands_-_complaint.pdf; Complaint, FTC v. Am. 

Screening, LLC, Case No. 4:20-cv-1021 (E.D. Mo.), available at 

https://www.ftc.gov/system/files/documents/cases/202_3158_american_screening_-_complaint.pdf; Complaint, 

FTC v. Zaappaaz LLC, Case No. 4:20-cv-02717 (S.D. Tex.), available at 

https://www.ftc.gov/system/files/documents/cases/202_3136_zaappaaz_-_complaint.pdf. 9

 Complaint, FTC v. One or More Unknown Parties Deceiving Consumers Into Making Purchases Through: 

www.cleanyos.com, Case No. 5:20-cv-02494 (N.D. Ohio), available at 

https://www.ftc.gov/system/files/documents/cases/complaint_w-a_filed.pdf. 10 Complaint, FTC v. Golden Sunrise Nutraceutical, Inc., Case No. 1:20-cv-00540-DAD-SKO (E.D. Cal.), available 

at https://www.ftc.gov/system/files/documents/cases/202_3146_golden_sunrise_-_complaint.pdf; Complaint, FTC 

v. Ching, Case No. 2:20-cv-03775 (C.D. Cal.), available at 

https://www.ftc.gov/system/files/documents/cases/whole_leaf_complaint.pdf; Complaint, In re Ching, Docket No. 

9394 (FTC), available at, 

https://www.ftc.gov/system/files/documents/cases/d09394_administrative_part_iii_complaint.pdf. 11 Complaint, In re Traffic Jam Events, LLC, Docket No. 2:20-cv-1740,9395 (FTC), available at 

https://www.ftc.gov/system/files/documents/cases/traffic_jam_events_complaint.pdfhttps://www.ftc.gov/system/file 

s/documents/cases/d9395_traffic_jam_complaint_final.pdf. 

12 FTC Press Release, As Scammers Leverage Pandemic Fears, FTC and Law Enforcement Partners Crack Down 

on Deceptive Income Schemes Nationwide, https://www.ftc.gov/news-events/press-releases/2020/12/scammersleverage-pandemic-fears-ftc-law-enforcement-partners (Dec. 14, 2020). 

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prevent COVID-19.13 The Commission also issued warning letters with the Small Business 

Administration regarding small business relief14 and joint letters with the Federal 

Communications Commission (FCC) to Voice Over Internet Protocol service providers and 

others “assisting and facilitating” illegal telemarketing calls, including calls to market products 

such as fraudulent home test kits.15 The Commission has monitored responses to these warning 

letters closely, and has been pleased to see that in the overwhelming majority of cases, letter 

recipients removed problematic claims quickly. The Commission is determined to pursue swift 

enforcement action against noncompliant warning letter recipients. 

In light of the eviction crisis caused by the pandemic, the Commission has partnered with 

fellow enforcers at the Consumer Financial Protection Bureau (CFPB) to focus on ensuring 

renters are not subjected to unlawful practices.16 The Commission also will continue its efforts to 

ensure that tenant screening companies comply with the Fair Credit Reporting Act, so that 

consumers who have gone or will go through an eviction are not further stigmatized by 

incomplete or inaccurate information as they seek new housing.17 The Commission is also 

Misleading Coronavirus Relief Loan Marketing, https://www.ftc.gov/news-events/press-releases/2020/05/ftc-sbawarn-operator-sbacom-lead-generator-lendio-stop (May 18, 2020); Press Release, FTC and SBA Warn Six 

Companies to Stop Potentially Misleading Marketing Aimed at Small Businesses Seeking Coronavirus Relief Loans 

13 Copies of all of the FTC’s COVID-19 related warning letters are available here: 

https://www.ftc.gov/coronavirus/enforcement/warning-letters. 14 FTC Press Release, FTC and SBA Warn Operator of SBA.com and Lead Generator Lendio to Stop Potentially 

https://www.ftc.gov/news-events/press-releases/2020/06/ftc-sba-warn-six-companies-stop-potentially-misleadingmarketing (June 24, 2020). 15 FTC Press Release, FTC and FCC Send Joint Letters to VoIP Service Providers Warning against ‘Routing and 

Transmitting’ Illegal Coronavirus-related Robocalls, https://www.ftc.gov/news-events/press-releases/2020/04/ftcfcc-send-joint-letters-voip-service-providers-warning-against (Apr. 3, 2020); FTC Press Release, FTC and FCC 

Send Joint Letters to Additional VoIP Providers Warning against ‘Routing and Transmitting’ Illegal Coronavirusrelated Robocalls, https://www.ftc.gov/news-events/press-releases/2020/05/ftc-fcc-send-joint-letters-additionalvoip-providers-warning (May 20, 2020). 16 Press Release, FACT SHEET: The Biden-Harris Administration’s Multi-Agency Effort to Support Renters and 

Landlords, https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/29/fact-sheet-the-biden-harrisadministrations-multi-agency-effort-to-support-renters-and-landlords/ (Mar. 29, 2021). 17 An example of the FTC’s efforts to protect tenants even before the pandemic is our case against AppFolio, in 

which the defendant agreed to settle charges that it failed to follow reasonable procedures to ensure the accuracy of 

criminal and eviction records in tenant screening reports and reported obsolete information. See Complaint, United 

4 
 

 

monitoring and investigating conduct by multistate landlords that may violate the FTC Act or 

other laws if they evict tenants in violation of national, state, or local eviction moratoriums, as 

Acting Chairwoman Slaughter and Acting CFPB Director Uejio recently warned in a joint 

statement.18 

The Commission will remain vigilant in order to protect the public from harms that stem 

directly and indirectly from the COVID-19 pandemic. The FTC is committed to tackling 

emerging threats, adjusting our strategies wherever necessary, and working in close coordination 

with our partners. 

b. Consumer Education and Outreach 

The Commission has buttressed its law enforcement actions with consumer and business 

education. Since the beginning of the pandemic, the FTC has worked aggressively to dispel 

misinformation and confusion about the pandemic and related issues that have fueled COVIDrelated scams. The Commission’s education campaign has several facets: consumer and business 

alerts; a multi-media campaign; substantive business guidance; and outreach with partners. 

Early in the pandemic, the Commission began issuing alerts warning consumers and the 

business community of COVID-related frauds. To date, the FTC has issued more than 100 

consumer and business alerts on a wide range of COVID-related topics, including economic 

impact payments, health claims, online shopping, privacy in a virtual environment, contact 

tracing, government imposter scams, job scams, and misinformation.19 The FTC sends its alerts 

to more than 367,000 email subscribers, which include consumers, businesses, partners, and the 

States v. AppFolio, Inc., Case No. 1:20-cv-03563 (D.D.C. Dec. 8, 2020), available at 

https://www.ftc.gov/system/files/documents/cases/ecf_1_-_us_v_appfolio_complaint.pdf. 18 Joint Statement by FTC Acting Chairwoman Rebecca Kelly Slaughter and CFPB Acting Director Dave Uejio 

(Mar. 29, 2021), https://www.ftc.gov/news-events/press-releases/2021/03/joint-statement-ftc-acting-chairwomanrebecca-kelly-slaughter. 19 All of the FTC’s business and consumer alerts are available at http://ftc.gov/coronavirus. 

5 
 

 

 

media. In turn, many of these subscribers share the information with their communities, greatly 

expanding the reach of the agency’s message. The FTC has developed a multimedia campaign 

with a dedicated website (ftc.gov/coronavirus) that contains a library of materials for consumers 

and businesses in several different languages. 

As the pandemic required many work, school, recreational, and social activities to 

transition from in-person to online and virtual platforms, the shift to digital life presented new 

opportunities for bad actors to exploit. The Commission worked to prevent this exploitation from 

occurring in the first instance. Accordingly, in April 2020, the Commission published guidance 

for education technology companies and schools regarding their duties to protect children’s 

privacy and personal data—including warnings of the parental consent requirements for data 

collection imposed by the Children’s Online Privacy Protection Act (COPPA).20 The FTC also 

took enforcement actions to stop digital harms.21 

Finally, FTC staff has engaged in national and local outreach with partners to reach a 

variety of audiences, including older consumers, ethnic and community media, housing 

organizations, re-entry groups, library patrons, and the military community. The staff has used 

webinars, tele-town halls, Twitter chats, Facebook Live events, and interviews with local and 

national media to reach its audiences. During the pandemic, FTC staff has participated in 

20 COPPA Guidance for Ed Tech Companies and Schools during the Coronavirus, https://www.ftc.gov/newsevents/blogs/business-blog/2020/04/coppa-guidance-ed-tech-companies-schools-during-coronavirus (Apr. 9, 2020). 21 Although the conduct in these matters occurred before the COVID-19 outbreak, the relief in these orders seeks to 

protect consumers from digital harms that have been exacerbated by the pandemic. See Complaint, United States v. 

HyberBeard, Inc., Case No. 3:20-cv-03683 (N.D. Cal.) (enforcement of the COPPA Rule against kids app 

developer), available at https://www.ftc.gov/system/files/documents/cases/192_3109_hyperbeard_-_complaint.pdf; 

Complaint, In re Zoom Video Comms., Inc., Docket No. C-4731 (FTC) (administrative action challenging claims 

that gave consumers a false sense of security about how the company protected their information), available at 

https://www.ftc.gov/system/files/documents/cases/1923167zoomcomplaint_0.pdf; Complaint, In re Flo Health, Inc., 

File No. 1923133 (FTC) (charges a developer of a period and fertility-tracking app with allegedly sharing consumer 

health information with outside data analytics providers after promising that such information would be kept private, 

available at https://www.ftc.gov/system/files/documents/cases/flo_health_complaint.pdf. 

6 
hundreds of virtual webinars, presentations, and interviews—in English, Spanish, and Mandarin. 

The FTC also has used new methods to reach people in economically and geographically diverse 

communities who are targeted by COVID-19 scam artists. For example, the FTC conducted a 

national radio media tour, mailed post cards to communities with low broadband access, and 

delivered letters to community health professionals in 5,000 rural and urban health clinics to help 

people avoid COVID-related fraud. 

 As the pandemic has deepened, some new consumer financial issues have arisen and 

others have been exacerbated. To ensure we are responding appropriately to the issues 

consumers are facing, the FTC coordinated a series of virtual listen-and-learn sessions across the 

country. Participants have included representatives from legal services, social services, elder 

justice centers, departments of aging, housing counselors, Catholic Charities, the Better Business 

Bureau, and the offices of State Attorneys General. Based on input from stakeholders, the FTC is 

enhancing and expanding its COVID-19 financial recovery and resiliency campaign, the 

centerpiece of which will be a web-based toolkit available in multiple languages. 

c. Data Collection 

The FTC’s Consumer Sentinel Network collects millions of reports from the public about 

fraud, identity theft, and other consumer problems, and makes them available to thousands of 

law enforcement users across the country. In the weeks following the first known cases of 

COVID-19 in the U.S., the FTC developed systems to track and alert the public to shifts in 

Sentinel reporting. On ftc.gov/exploredata, the FTC launched public dashboards showing 

aggregate Sentinel data on reports associated with COVID-19 by age, type of fraud, and 

geographic location, with figures that are updated daily. Since January 2020 and as of April 7, 

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2021, the FTC has received more than 436,000 such reports, reflecting $399 million in fraud 

losses.22 

The FTC’s monitoring and analyses of Sentinel data reveal increased fraud activity in 

2020. Specifically, the number of fraud, identity theft, and other reports to Sentinel (excluding 

Do Not Call) increased more than 45% over 2019 numbers, and reported losses from fraud grew 

from more than $1.8 billion in 2019 to $3.3 billion in 2020.23 Being able to use Sentinel data to 

spot trends has helped the FTC respond to emerging scams in real time—from bringing cases to 

halt fraudulent activity, to targeting alerts warning of the newest fraud, to addressing specific 

threats, such as the proliferation of identity theft related to unemployment insurance benefits.24 

Ensuring that the experiences of all consumers are represented in Sentinel is critically 

important to the agency’s work. To expand accessibility, the FTC launched a new modernized 

reporting website, ReportFraud.ftc.gov, in October 2020. The updated site includes a COVID-19 

banner, providing an easy way for consumers to report COVID-related issues. And, this month, 

the FTC launched the Community Advocate Center, which is part of the agency’s ongoing work 

to collaborate with legal services organizations to learn about consumer protection needs and 

22 The figures reflect reports in Sentinel that specifically mention words related to the pandemic, such as COVID, 

stimulus, N95 and related terms. To provide the most relevant results, some subcategories are excluded. For more 

information, visit https://public.tableau.com/profile/federal.trade.commission#!/vizhome/COVID19andStimulusReports/Map. 23 Some of the increase in complaints for 2020 is due to a new large data contributor, namely the FBI’s Internet 

Crime Complaint Center, which added about 200,000 complaints in 2020. In addition, the FTC launched a redesigned website to capture consumer reports more easily at the end of October 2020. Nevertheless, the rise in 

reports is highly significant. From FTC’s websites and call center alone, the surge in reports was about 970,000 in 

2020, and many Sentinel data contributors also experienced an increase in complaint volume in 2020. 24 Identity thieves targeted unemployment insurance benefits in record numbers in 2020. Of the identity theft reports 

received in 2020, over 400,000 came from people who said their information was misused to apply for a government 

benefit, and the overwhelming majority of these related to unemployment insurance. This represents a staggering 

increase of nearly 3000% from 2019. These reports were overwhelmingly about fraudulently obtained 

unemployment benefits claims, a problem that has proliferated during the pandemic. Working in cooperation with 

the U.S. Department of Justice Unemployment Insurance Fraud Task Force, the FTC launched 

www.IdentityTheft.gov/unemploymentinsurance to provide information to the public on where to report and how 

consumers can protect their credit. 

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problems affecting the lower-income communities they serve. The Center provides a new way 

for organizations that provide free and low-cost legal services to report fraud and other illegal 

business practices directly to the FTC on behalf of their clients. 

III. 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 

others.25 More recently, in light of the pandemic, the FTC has used Section 13(b) to take action 

against entities operating COVID-related scams.26 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.27 Section 13(b) is a critical tool in support of our enforcement missions, but its 

effectiveness is currently imperiled, and this uncertainty is hurting our ongoing enforcement 

efforts. 

Section 13(b) of the FTC Act is 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 

25 15 U.S.C. § 53(b). 26 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). 27 See 

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

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proper proof, the court may issue, a permanent injunction.” 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 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.28 

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,

29 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,

30 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 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 

28 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. 29 FTC v. Credit Bureau Center, LLC, 937 F.3d 764 (7th Cir. 2019). 30 FTC v. AbbVie Inc., 976 F.3d 327 (3d Cir. 2020). 

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

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

This issue is now pending before the U.S. Supreme Court, and the agency presented oral 

argument before the Court in January 2021.31 Although the Commission hopes to obtain a 

favorable ruling, the recent judicial trends exemplified by Credit Bureau Center and AbbVie are 

concerning. If the Supreme Court were to adopt the Seventh and Third Circuit’s interpretation of 

Section 13(b), it would eliminate the primary tool that the FTC uses today to return money to 

consumer victims. 

The uncertainty in the law is taxing the Commission’s law enforcement resources. 

Defendants now routinely attempt to delay ongoing litigation for as long as possible in the hope 

that the Supreme Court will allow them to escape liability for any monetary relief, and several 

matters have been stayed pending the forthcoming Supreme Court decision.32 Defendants are 

also refusing to engage in settlement discussions unless the Commission agrees to abandon all 

claims for monetary relief. One defendant has gone as far as to initiate preemptive litigation in 

the Seventh Circuit to take advantage of the fact that the Commission already is precluded from 

seeking monetary relief under Section 13(b) there.33 These developments have slowed the 

resolution of our pending enforcement cases, requiring the Commission to expend more 

resources, and preventing staff from taking on new work. 

31 AMG Capital Mgmt. LLC v. FTC, No. 19-508. AMG is an appeal by defendants from a 2018 Ninth Circuit ruling 

in which the court re-affirmed its prior precedent interpreting Section 13(b) to allow the FTC to obtain monetary 

relief. FTC v. AMG Capital Mgmt., LLC, 910 F.3d 417 (9th Cir. 2018). 32 See, e.g., FTC v. Cardiff, No. 5-18-CV-02104, Dkt. # 511 (C.D. Cal. Oct. 9, 2020) (staying ruling on monetary 

relief pending disposition of AMG); FTC v. Match Group Inc., No. 3-19-CV-02281, Dkt. # 54 (N.D. Tex. Oct. 9, 

2020); FTC v. Lending Club Corp., No. 18-CV-02454, 2020 WL 4898136 (C.D. Cal. Aug. 20, 2020). 33 See Nerium Int’l, LLC v. FTC, No. 1:19-CV-7189 (N.D. Ill. filed Nov. 1, 2019) (motion to dismiss granted Aug. 

31, 2020). 

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In addition, 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, a case involving a drug company’s alleged abuse of 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.34 That decision unnecessarily limits the Commission’s ability to obtain monetary 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, incorrectly, that the FTC cannot sue under Section 13(b) unless conduct is imminent or 

ongoing.35 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.36 

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

enjoining defendants from resuming their unlawful activities in cases where the conduct has 

stopped but there is a reasonable likelihood that the defendants will resume their unlawful 

activities in the 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 the fact that there is a likelihood of 

recurrence, and they make these arguments even in cases when they stopped violating the law 

only after learning that the FTC was investigating them. 

Overall, the judicial threats outlined above are grave and, if Congress does not act 

promptly, the FTC’s ability to protect consumers and execute its law enforcement mission will 

34 FTC v. Shire ViroPharma, Inc., 917 F.3d 147 (3d Cir. 2019). 35 AbbVie, 976 F.3d at 376. 36 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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be significantly impaired. 

IV. CONCLUSION 

Throughout the past year, the Commission has worked tirelessly to stop bad actors from 

exploiting the pandemic at the public’s expense. But the Commission’s work is far from over. 

COVID-related scams are likely to persist as the country continues to grapple with this 

pandemic. Combatting these scams will remain a top priority for the Commission, and we will 

continue to use every tool we have to stop this predatory behavior, including seeking civil 

penalties under the newly enacted COVID-19 Consumer Protection Act, where appropriate.37 

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

FTC’s ability to enjoin illegal conduct and restore to consumers money they have lost. A 

legislative solution that addresses the threat to the FTC’s authority to obtain redress for 

consumers would enhance our efforts to protect consumers from COVID-related harms. 

We look forward to continuing to work with the Committee and Congress, and we would 

be happy to answer your questions. 

37 Pub. L. No. 116-260, 134 Stat. 1182, Division FF, Title XIV, § 1401(b)(1). 

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