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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5510 Introduced in House (IH)]

<DOC>

114th CONGRESS
  2d Session
                                H. R. 5510

To amend the Federal Trade Commission Act to establish new requirements 
relating to investigations, consent orders, and reporting requirements, 
                        and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 16, 2016

 Mr. Burgess introduced the following bill; which was referred to the 
 Committee on Energy and Commerce, and in addition to the Committee on 
   the Judiciary, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
To amend the Federal Trade Commission Act to establish new requirements 
relating to investigations, consent orders, and reporting requirements, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``FTC Process and 
Transparency Reform Act of 2016''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Unlawful act or practice.
Sec. 3. Time limitation for consent orders.
Sec. 4. Annual reporting on the status of investigations.
Sec. 5. Requirement of analysis and rationale for legislative and 
                            regulatory recommendations.
Sec. 6. Effects of guidelines, general statements of policy, and 
                            similar guidance.
Sec. 7. Termination of inactive investigations.
Sec. 8. Nonpublic collaborative discussions.
Sec. 9. Annual plan required.

SEC. 2. UNLAWFUL ACT OR PRACTICE.

    Section 5(n) of the Federal Trade Commission Act (15 U.S.C. 45(n)) 
is amended to read as follows:
    ``(n) Unlawful Act or Practice.--
            ``(1) Substantial injury required.--
                    ``(A) In general.--The Commission shall have no 
                authority under this section or section 18 to declare 
                unlawful an act or practice on the grounds that such 
                act or practice is unfair unless the act or practice 
                causes or is likely to cause substantial injury to 
                consumers which is not reasonably avoidable by 
                consumers themselves and not outweighed by 
                countervailing benefits to consumers or to competition.
                    ``(B) Substantial injury to consumers.--For 
                purposes of this subsection, an act or practice does 
                not cause and is not likely to cause substantial injury 
                to consumers if the injury or harm resulting from such 
                act or practice is trivial or merely speculative. An 
                injury may be sufficiently substantial if the injury 
                does a small harm to a large number of people. An act 
                or practice may be likely to cause a substantial injury 
                if the act or practice raises a significant risk of 
                concrete harm.
                    ``(C) Considerations required.--In determining 
                whether an act or practice causes or is likely to cause 
                substantial injury to consumers under this subsection, 
                the Commission shall consider the following:
                            ``(i) Whether the act or practice results 
                        in monetary harm.
                            ``(ii) Whether the act or practice results 
                        in unwarranted health or safety risk.
                            ``(iii) Whether the act or practice results 
                        only in emotional or other more subjective 
                        harm.
            ``(2) Net effects of injury required.--
                    ``(A) Considerations required.--An act or practice 
                is not unfair unless the act or practice is injurious 
                in its net effects. In determining whether an act or 
                practice is injurious in its net effects, the 
                Commission shall consider the following:
                            ``(i) The various costs for a remedy, 
                        including the costs to the parties directly 
                        before the Commission.
                            ``(ii) The burdens on society in general in 
                        the form of increased paperwork, increased 
                        regulatory burdens on the flow of information, 
                        reduced incentives to innovation and capital 
                        formation, and other similar matters.
                    ``(B) Consumer decisions.--The Commission may not 
                second-guess the wisdom of particular consumer 
                decisions, but may consider whether the act or practice 
                unreasonably creates or takes advantage of an obstacle 
                to the free exercise of consumer decisionmaking.
            ``(3) Public policy considerations.--In determining whether 
        an act or practice is unfair, the Commission may consider 
        established public policies as evidence to be considered with 
        all other evidence. Such public policy considerations may not 
        serve as a primary basis for such determination.''.

SEC. 3. TIME LIMITATION FOR CONSENT ORDERS.

    (a) Amendment.--Section 5 of the Federal Trade Commission Act (15 
U.S.C. 45) is amended by adding at the end the following new 
subsection:
    ``(o) Termination Clause Required for Consent Orders.--Any consent 
order entered into by the Commission relating to alleged unfair or 
deceptive acts or practices by the person, partnership, or corporation, 
subject to the consent order shall include a termination clause that 
the consent order shall expire not later than 8 years after the date on 
which the consent order is entered into, unless the consent order 
relates to alleged fraud by the person, partnership, or corporation 
subject to the consent order or requires a time limit longer than 8 
years based on the factors described in this subsection. In determining 
the time limit for any termination clause, the Commission shall 
consider each of the following factors:
            ``(1) The impact of technological progress on the 
        continuing relevance of the consent order.
            ``(2) Whether there is reason to believe that the person, 
        partnership, or corporation would continue to engage in 
        activities that violate this section without the consent order.
    ``(p) Consent Order Review.--Any consent order entered into by the 
Commission that is unrelated to alleged fraud by the person, 
partnership, or corporation subject to the consent order and has a 
termination date more than 5 years after such consent order is entered 
into shall include a clause providing for Commission review of the 
consent order 5 years after the date on which the order is entered 
into. Such clause shall require the Commission to evaluate whether the 
consent order has achieved its initial purposes based on the factors 
described in subsection (o). The clause shall provide that if, based on 
such evaluation, the Commission determines that the consent order has 
achieved its purposes, the Commission shall terminate the consent 
order.
    ``(q) Petition for Review of Existing Consent Orders.--Any person, 
partnership, or corporation that as of the effective date of this 
subsection is subject to a consent order that is unrelated to alleged 
fraud and has been effective for a period of at least five years may 
petition the Commission to terminate such consent order. In evaluating 
a petition to terminate a consent order under this subsection, the 
Commission shall consider whether the consent order has achieved its 
initial purposes based on each of the factors described in subsection 
(o). If, based on such evaluation, the Commission determines that the 
consent order has achieved its purposes, the Commission shall terminate 
the consent order.''.
    (b) Effective Date; Applicability.--The amendment made by 
subsection (a) shall take effect on the date of enactment of this Act 
and with respect to subsections (o) and (p) of section 5 of the Federal 
Trade Commission Act (15 U.S.C. 45), as added by subsection (a), shall 
apply with respect to any consent order entered into after such date.

SEC. 4. ANNUAL REPORTING ON THE STATUS OF INVESTIGATIONS.

    Section 5 of the Federal Trade Commission Act (15 U.S.C. 45), as 
amended by section 3, is further amended by adding at the end the 
following new subsection:
    ``(r) Report on Investigations.--
            ``(1) In general.--The Commission shall, on an annual 
        basis, submit a report to Congress on investigations with 
        respect to unfair or deceptive acts or practices, and with 
        respect to unfair methods of competition, in or affecting 
        commerce (within the meaning of subsection (a)(1)), detailing--
                    ``(A) the number of such investigations the 
                Commission has commenced;
                    ``(B) the number of such investigations the 
                Commission has closed with no official agency action;
                    ``(C) the disposition of such investigations, if 
                such investigations have concluded and resulted in 
                official agency action; and
                    ``(D) for each such investigation that was closed 
                with no official agency action, subject to paragraph 
                (2), a description--
                            ``(i) sufficient to indicate the legal 
                        analysis supporting the Commission's decision 
                        not to continue such investigation; and
                            ``(ii) of the industry sectors of the 
                        persons, partnerships, or corporations who are 
                        subjects of such investigation.
            ``(2) Consent required.--The Commission shall not include 
        in a report required under paragraph (1) the description 
        required under subparagraph (D) of such paragraph unless the 
        Commission has--
                    ``(A) provided to each person, partnership, or 
                corporation who is a subject of the investigation a 
                notification containing the description to be included 
                in the report; and
                    ``(B) obtained the consent of each such person, 
                partnership, or corporation to the inclusion of the 
                description in the report.
            ``(3) Privacy protection.--The description required under 
        paragraph (1)(D) shall not include the identity of any person, 
        partnership, or corporation who is a subject of the 
        investigation or any other information that identifies the 
        person, partnership, or corporation.''.

SEC. 5. REQUIREMENT OF ANALYSIS AND RATIONALE FOR LEGISLATIVE AND 
              REGULATORY RECOMMENDATIONS.

    The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended 
by inserting after section 6 the following new section:

``SEC. 6A. ECONOMIC ANALYSIS REQUIRED.

    ``(a) In General.--Except as provided in subsection (b), the 
Commission may not publish a recommendation for legislative or 
regulatory action without publishing the economic analysis or advice 
prepared by the Bureau of Economics of the Commission relating to such 
recommendation. If no such economic analysis or advice was prepared, 
the Commission shall indicate, in writing as part of the 
recommendation, that no such analysis or advice was given.
    ``(b) Exception.--The requirement in subsection (a) shall not apply 
if--
            ``(1) the recommendation for legislative or regulatory 
        action is made as part of an appearance by a Commissioner 
        before Congress;
            ``(2) the recommendation is made to a State or local 
        government entity; or
            ``(3) the recommendation is requested by and submitted to 
        any member or committee of Congress, including the Committee on 
        Energy and Commerce of the House of Representatives.''.

SEC. 6. EFFECTS OF GUIDELINES, GENERAL STATEMENTS OF POLICY, AND 
              SIMILAR GUIDANCE.

    Section 18(a) of the Federal Trade Commission Act (15 U.S.C. 
57a(a)) is amended by adding at the end the following:
    ``(3)(A) No guidelines, general statements of policy, or similar 
guidance related either to unfair methods of competition or to unfair 
or deceptive acts or practices, in or affecting commerce, issued by the 
Commission shall confer any rights upon any person, State, or locality, 
nor shall operate to bind the Commission or any person, State, or 
locality to the approach recommended in such guidelines, general 
statements of policy, or similar guidance. In any enforcement action, 
the Commission shall prove a violation of a provision of law enforced 
by the Commission. The Commission may not base an enforcement action 
on, or execute a consent order based on, acts or practices that are 
alleged to be inconsistent with any such guidelines, general statements 
of policy, or similar guidance, unless the acts or practices violate a 
provision of law enforced by the Commission.
    ``(B) Compliance with any guidelines, general statement of policy, 
or similar guidance issued by the Commission may be used as evidence of 
compliance with the provision of law under which the guidelines, 
general statement of policy, or guidance was issued.
    ``(C) Nothing in this paragraph shall be construed to confer any 
authority upon or negate any authority of the Commission to issue 
guidelines, general statements of policy, or similar guidance.''.

SEC. 7. TERMINATION OF INACTIVE INVESTIGATIONS.

    Section 20 of the Federal Trade Commission Act (15 U.S.C. 57b-1) is 
amended--
            (1) by redesignating subsection (j) as subsection (k); and
            (2) by inserting after subsection (i) the following new 
        subsection:
    ``(j) Termination of Inactive Investigation.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        covered investigation shall terminate at the expiration of the 
        six-month period beginning on the date on which a covered 
        verifiable written communication is sent by the Commission.
            ``(2) Exception.--Paragraph (1) does not apply if--
                    ``(A) an additional covered verifiable written 
                communication is sent by the Commission during the 
                period described in paragraph (1);
                    ``(B) the Commission votes to extend the covered 
                investigation before the expiration of such period; or
                    ``(C) the Commission determines in a vote, within 
                30 days after the expiration of such period, that the 
                Commission did not send a covered verifiable written 
                communication during such period because of excusable 
                neglect or a circumstance beyond the control of the 
                Commission that rendered notification during such 
                period impossible.
            ``(3) Definitions.--In this subsection:
                    ``(A) Covered investigation.--The term `covered 
                investigation' means an investigation conducted 
                pursuant to this section in which the Commission has 
                notified the person, partnership, or corporation that 
                is the subject of the investigation by verifiable 
                written communication.
                    ``(B) Covered verifiable written communication.--
                The term `covered verifiable written communication' 
                means a verifiable written communication relating to an 
                investigation conducted pursuant to this section that 
                is sent to the person, partnership, or corporation that 
                is the subject of the investigation.''.

SEC. 8. NONPUBLIC COLLABORATIVE DISCUSSIONS.

    The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended 
by inserting after section 26 the following:

``SEC. 27. NONPUBLIC COLLABORATIVE DISCUSSIONS.

    ``(a) In General.--Notwithstanding section 552b of title 5, United 
States Code, a bipartisan majority of Commissioners may hold a meeting 
that is closed to the public to discuss official business if--
            ``(1) a vote or any other agency action is not taken at 
        such meeting;
            ``(2) each person present at such meeting is a Commissioner 
        or an employee of the Commission; and
            ``(3) an attorney from the Office of General Counsel of the 
        Commission is present at such meeting.
    ``(b) Disclosure of Nonpublic Collaborative Discussions.--Not later 
than 2 business days after the conclusion of a meeting held under 
subsection (a), the Commission shall publish on its Internet website a 
disclosure of such meeting, including--
            ``(1) a list of the persons who attended such meeting; and
            ``(2) a summary of the matters discussed at such meeting, 
        except for such matters as the Commission determines may be 
        withheld under section 552b(c) of title 5, United States Code.
    ``(c) Preservation of Open Meetings Requirements for Agency 
Action.--Nothing in this section shall alter or supersede section 552b 
of title 5, United States Code, with respect to any meeting of 
Commissioners other than a meeting held under subsection (a).
    ``(d) Definitions.--In this section:
            ``(1) Agency action.--The term `agency action' has the 
        meaning given such term in section 551 of title 5, United 
        States Code.
            ``(2) Bipartisan majority.--The term `bipartisan majority' 
        means, when used with respect to a group of Commissioners, that 
        such group--
                    ``(A) is a group of two or more Commissioners; and
                    ``(B) includes, for each political party of which 
                any Commissioner is a member, at least 1 Commissioner 
                who is a member of such political party, and, if any 
                Commissioner has no political party affiliation, at 
                least 1 unaffiliated Commissioner.''.

SEC. 9. ANNUAL PLAN REQUIRED.

    (a) Amendments.--The Federal Trade Commission Act (15 U.S.C. 41 et 
seq.), as amended by section 8, is further amended--
            (1) by redesignating section 28 as section 30; and
            (2) by inserting after section 27 the following new 
        sections:

``SEC. 28. ANNUAL PLAN REQUIRED.

    ``Not later than December 1 of each year, the Commission shall 
publish and submit to the Committees on the Judiciary and Commerce, 
Science, and Transportation of the Senate and the Committees on the 
Judiciary and Energy and Commerce of the House of Representatives a 
plan for the next calendar year describing the projected activities of 
the Commission, including each of the following:
            ``(1) The policy priorities of the Commission.
            ``(2) Any rulemakings projected to be commenced.
            ``(3) Any plans to develop guidelines or other non-
        regulatory guidance documents.
            ``(4) Any plans to restructure the Commission or establish 
        or alter working groups.
            ``(5) Any planned projects or initiatives of the 
        Commission, including workshops, conferences, and reports.
            ``(6) With respect to any activities of the Commission, 
        including workshops, conferences, reports, working groups, 
        guidance documents, or rulemakings, that relate specifically to 
        combating unfair or deceptive acts or practices that target or 
        significantly affect individuals who are 65 years of age or 
        older, a description of how such activities will address such 
        acts or practices.
            ``(7) Projected dates and timelines associated with any of 
        the required disclosures in this section.

``SEC. 29. REPORT ON ELDER FRAUD REQUIRED.

    ``Not later than January 31 of each year, the Commission shall 
publish and submit to the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Energy and Commerce 
of the House of Representatives a report on the Commission's 
enforcement actions to address unfair or deceptive acts or practices 
that may have targeted or significantly affected individuals who are 65 
years of age or older during the previous calendar year, including each 
of the following:
            ``(1) A brief description of each such enforcement action.
            ``(2) The disposition of such enforcement actions, broken 
        down by category.
            ``(3) The proportion of such enforcement actions as a 
        percentage of all enforcement actions relating to unfair or 
        deceptive acts or practices in or affecting commerce brought by 
        the Commission.''.
    (b) Rule of Construction.--Nothing in the amendments made by 
subsection (a) shall be construed to limit or restrict the Federal 
Trade Commission's activities or disclosure of information to the 
public, consistent with applicable law.
    (c) Effective Date; Applicability.--The amendments made by 
subsection (a) shall take effect on the date of enactment of this Act 
and shall apply with respect to the first December 1 and January 31, as 
applicable, occurring after such effective date.
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