I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘FTC Process and Transparency Reform Act of 2016’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 


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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. 

1 SEC. 2. UNLAWFUL ACT OR PRACTICE. 

2 Section 5(n) of the Federal Trade Commission Act 

3 (15 U.S.C. 45(n)) is amended to read as follows: 

4 ‘‘(n) UNLAWFUL ACT OR PRACTICE.— 

5 ‘‘(1) SUBSTANTIAL INJURY REQUIRED.— 

6 ‘‘(A) IN GENERAL.—The Commission shall 

7 have no authority under this section or section 

8 18 to declare unlawful an act or practice on the 

9 grounds that such act or practice is unfair un10 less the act or practice causes or is likely to 

11 cause substantial injury to consumers which is 

12 not reasonably avoidable by consumers them13 selves and not outweighed by countervailing 

14 benefits to consumers or to competition. 

15 ‘‘(B) SUBSTANTIAL INJURY TO CON16 SUMERS.—For purposes of this subsection, an 

17 act or practice does not cause and is not likely 

18 to cause substantial injury to consumers if the 

19 injury or harm resulting from such act or prac20 tice is trivial or merely speculative. An injury 

21 may be sufficiently substantial if the injury 


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1 does a small harm to a large number of people. 

2 An act or practice may be likely to cause a sub3 stantial injury if the act or practice raises a sig4 nificant risk of concrete harm. 

5 ‘‘(C) CONSIDERATIONS REQUIRED.—In de6 termining whether an act or practice causes or 

7 is likely to cause substantial injury to con8 sumers under this subsection, the Commission 

9 shall consider the following: 

10 ‘‘(i) Whether the act or practice re11 sults in monetary harm. 

12 ‘‘(ii) Whether the act or practice re13 sults in unwarranted health or safety risk. 

14 ‘‘(iii) Whether the act or practice re15 sults only in emotional or other more sub16 jective harm. 

17 ‘‘(2) NET EFFECTS OF INJURY REQUIRED.— 

18 ‘‘(A) CONSIDERATIONS REQUIRED.—An 

19 act or practice is not unfair unless the act or 

20 practice is injurious in its net effects. In deter21 mining whether an act or practice is injurious 

22 in its net effects, the Commission shall consider 

23 the following: 


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1 ‘‘(i) The various costs for a remedy, 

2 including the costs to the parties directly 

3 before the Commission. 

4 ‘‘(ii) The burdens on society in gen5 eral in the form of increased paperwork, 

6 increased regulatory burdens on the flow of 

7 information, reduced incentives to innova8 tion and capital formation, and other simi9 lar matters. 

10 ‘‘(B) CONSUMER DECISIONS.—The Com11 mission may not second-guess the wisdom of 

12 particular consumer decisions, but may consider 

13 whether the act or practice unreasonably cre14 ates or takes advantage of an obstacle to the 

15 free exercise of consumer decisionmaking. 

16 ‘‘(3) PUBLIC POLICY CONSIDERATIONS.—In de17 termining whether an act or practice is unfair, the 

18 Commission may consider established public policies 

19 as evidence to be considered with all other evidence. 

20 Such public policy considerations may not serve as 

21 a primary basis for such determination.’’. 

22 SEC. 3. TIME LIMITATION FOR CONSENT ORDERS. 

23 (a) AMENDMENT.—Section 5 of the Federal Trade 

24 Commission Act (15 U.S.C. 45) is amended by adding at 

25 the end the following new subsection: 


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1 ‘‘(o) TERMINATION CLAUSE REQUIRED FOR CON2 SENT ORDERS.—Any consent order entered into by the 

3 Commission relating to alleged unfair or deceptive acts or 

4 practices by the person, partnership, or corporation, sub5 ject to the consent order shall include a termination clause 

6 that the consent order shall expire not later than 8 years 

7 after the date on which the consent order is entered into, 

8 unless the consent order relates to alleged fraud by the 

9 person, partnership, or corporation subject to the consent 

10 order or requires a time limit longer than 8 years based 

11 on the factors described in this subsection. In determining 

12 the time limit for any termination clause, the Commission 

13 shall consider each of the following factors: 

14 ‘‘(1) The impact of technological progress on 

15 the continuing relevance of the consent order. 

16 ‘‘(2) Whether there is reason to believe that the 

17 person, partnership, or corporation would continue 

18 to engage in activities that violate this section with19 out the consent order. 

20 ‘‘(p) CONSENT ORDER REVIEW.—Any consent order 

21 entered into by the Commission that is unrelated to al22 leged fraud by the person, partnership, or corporation sub23 ject to the consent order and has a termination date more 

24 than 5 years after such consent order is entered into shall 

25 include a clause providing for Commission review of the 


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1 consent order 5 years after the date on which the order 

2 is entered into. Such clause shall require the Commission 

3 to evaluate whether the consent order has achieved its ini4 tial purposes based on the factors described in subsection 

5 (o). The clause shall provide that if, based on such evalua6 tion, the Commission determines that the consent order 

7 has achieved its purposes, the Commission shall terminate 

8 the consent order. 

9 ‘‘(q) PETITION FOR REVIEW OF EXISTING CONSENT

10 ORDERS.—Any person, partnership, or corporation that as 

11 of the effective date of this subsection is subject to a con12 sent order that is unrelated to alleged fraud and has been 

13 effective for a period of at least five years may petition 

14 the Commission to terminate such consent order. In evalu15 ating a petition to terminate a consent order under this 

16 subsection, the Commission shall consider whether the 

17 consent order has achieved its initial purposes based on 

18 each of the factors described in subsection (o). If, based 

19 on such evaluation, the Commission determines that the 

20 consent order has achieved its purposes, the Commission 

21 shall terminate the consent order.’’. 

22 (b) EFFECTIVE DATE; APPLICABILITY.—The amend23 ment made by subsection (a) shall take effect on the date 

24 of enactment of this Act and with respect to subsections 

25 (o) and (p) of section 5 of the Federal Trade Commission 


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1 Act (15 U.S.C. 45), as added by subsection (a), shall apply 

2 with respect to any consent order entered into after such 

3 date. 

4 SEC. 4. ANNUAL REPORTING ON THE STATUS OF INVES5 TIGATIONS. 

6 Section 5 of the Federal Trade Commission Act (15 

7 U.S.C. 45), as amended by section 3, is further amended 

8 by adding at the end the following new subsection: 

9 ‘‘(r) REPORT ON INVESTIGATIONS.— 

10 ‘‘(1) IN GENERAL.—The Commission shall, on 

11 an annual basis, submit a report to Congress on in12 vestigations with respect to unfair or deceptive acts 

13 or practices, and with respect to unfair methods of 

14 competition, in or affecting commerce (within the 

15 meaning of subsection (a)(1)), detailing— 

16 ‘‘(A) the number of such investigations the 

17 Commission has commenced; 

18 ‘‘(B) the number of such investigations the 

19 Commission has closed with no official agency 

20 action; 

21 ‘‘(C) the disposition of such investigations, 

22 if such investigations have concluded and re23 sulted in official agency action; and 


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1 ‘‘(D) for each such investigation that was 

2 closed with no official agency action, subject to 

3 paragraph (2), a description— 

4 ‘‘(i) sufficient to indicate the legal 

5 analysis supporting the Commission’s deci6 sion not to continue such investigation; 

7 and 

8 ‘‘(ii) of the industry sectors of the 

9 persons, partnerships, or corporations who 

10 are subjects of such investigation. 

11 ‘‘(2) CONSENT REQUIRED.—The Commission 

12 shall not include in a report required under para13 graph (1) the description required under subpara14 graph (D) of such paragraph unless the Commission 

15 has— 

16 ‘‘(A) provided to each person, partnership, 

17 or corporation who is a subject of the investiga18 tion a notification containing the description to 

19 be included in the report; and 

20 ‘‘(B) obtained the consent of each such 

21 person, partnership, or corporation to the inclu22 sion of the description in the report. 

23 ‘‘(3) PRIVACY PROTECTION.—The description 

24 required under paragraph (1)(D) shall not include 

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1 tion who is a subject of the investigation or any 

2 other information that identifies the person, partner3 ship, or corporation.’’. 

4 SEC. 5. REQUIREMENT OF ANALYSIS AND RATIONALE FOR 

5 LEGISLATIVE AND REGULATORY REC6 OMMENDATIONS. 

7 The Federal Trade Commission Act (15 U.S.C. 41 

8 et seq.) is amended by inserting after section 6 the fol9 lowing new section: 

10 ‘‘SEC. 6A. ECONOMIC ANALYSIS REQUIRED. 

11 ‘‘(a) IN GENERAL.—Except as provided in subsection 

12 (b), the Commission may not publish a recommendation 

13 for legislative or regulatory action without publishing the 

14 economic analysis or advice prepared by the Bureau of Ec15 onomics of the Commission relating to such recommenda16 tion. If no such economic analysis or advice was prepared, 

17 the Commission shall indicate, in writing as part of the 

18 recommendation, that no such analysis or advice was 

19 given. 

20 ‘‘(b) EXCEPTION.—The requirement in subsection (a) 

21 shall not apply if— 

22 ‘‘(1) the recommendation for legislative or regu23 latory action is made as part of an appearance by 

24 a Commissioner before Congress; 


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1 ‘‘(2) the recommendation is made to a State or 

2 local government entity; or 

3 ‘‘(3) the recommendation is requested by and 

4 submitted to any member or committee of Congress, 

5 including the Committee on Energy and Commerce 

6 of the House of Representatives.’’. 

7 SEC. 6. EFFECTS OF GUIDELINES, GENERAL STATEMENTS 

8 OF POLICY, AND SIMILAR GUIDANCE. 

9 Section 18(a) of the Federal Trade Commission Act 

10 (15 U.S.C. 57a(a)) is amended by adding at the end the 

11 following: 

12 ‘‘(3)(A) No guidelines, general statements of policy, 

13 or similar guidance related either to unfair methods of 

14 competition or to unfair or deceptive acts or practices, in 

15 or affecting commerce, issued by the Commission shall 

16 confer any rights upon any person, State, or locality, nor 

17 shall operate to bind the Commission or any person, State, 

18 or locality to the approach recommended in such guide19 lines, general statements of policy, or similar guidance. In 

20 any enforcement action, the Commission shall prove a vio21 lation of a provision of law enforced by the Commission. 

22 The Commission may not base an enforcement action on, 

23 or execute a consent order based on, acts or practices that 

24 are alleged to be inconsistent with any such guidelines, 

25 general statements of policy, or similar guidance, unless 


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1 the acts or practices violate a provision of law enforced 

2 by the Commission. 

3 ‘‘(B) Compliance with any guidelines, general state4 ment of policy, or similar guidance issued by the Commis5 sion may be used as evidence of compliance with the provi6 sion of law under which the guidelines, general statement 

7 of policy, or guidance was issued. 

8 ‘‘(C) Nothing in this paragraph shall be construed to 

9 confer any authority upon or negate any authority of the 

10 Commission to issue guidelines, general statements of pol11 icy, or similar guidance.’’. 

12 SEC. 7. TERMINATION OF INACTIVE INVESTIGATIONS. 

13 Section 20 of the Federal Trade Commission Act (15 

14 U.S.C. 57b–1) is amended— 

15 (1) by redesignating subsection (j) as sub16 section (k); and 

17 (2) by inserting after subsection (i) the fol18 lowing new subsection: 

19 ‘‘(j) TERMINATION OF INACTIVE INVESTIGATION.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), a covered investigation shall terminate at 

22 the expiration of the six-month period beginning on 

23 the date on which a covered verifiable written com24 munication is sent by the Commission. 


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1 ‘‘(2) EXCEPTION.—Paragraph (1) does not 

2 apply if— 

3 ‘‘(A) an additional covered verifiable writ4 ten communication is sent by the Commission 

5 during the period described in paragraph (1); 

6 ‘‘(B) the Commission votes to extend the 

7 covered investigation before the expiration of 

8 such period; or 

9 ‘‘(C) the Commission determines in a vote, 

10 within 30 days after the expiration of such pe11 riod, that the Commission did not send a cov12 ered verifiable written communication during 

13 such period because of excusable neglect or a 

14 circumstance beyond the control of the Commis15 sion that rendered notification during such pe16 riod impossible. 

17 ‘‘(3) DEFINITIONS.—In this subsection: 

18 ‘‘(A) COVERED INVESTIGATION.—The term 

19 ‘covered investigation’ means an investigation 

20 conducted pursuant to this section in which the 

21 Commission has notified the person, partner22 ship, or corporation that is the subject of the 

23 investigation by verifiable written communica24 tion. 


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1 ‘‘(B) COVERED VERIFIABLE WRITTEN

2 COMMUNICATION.—The term ‘covered verifiable 

3 written communication’ means a verifiable writ4 ten communication relating to an investigation 

5 conducted pursuant to this section that is sent 

6 to the person, partnership, or corporation that 

7 is the subject of the investigation.’’. 

8 SEC. 8. NONPUBLIC COLLABORATIVE DISCUSSIONS. 

9 The Federal Trade Commission Act (15 U.S.C. 41 

10 et seq.) is amended by inserting after section 26 the fol11 lowing: 

12 ‘‘SEC. 27. NONPUBLIC COLLABORATIVE DISCUSSIONS. 

13 ‘‘(a) IN GENERAL.—Notwithstanding section 552b of 

14 title 5, United States Code, a bipartisan majority of Com15 missioners may hold a meeting that is closed to the public 

16 to discuss official business if— 

17 ‘‘(1) a vote or any other agency action is not 

18 taken at such meeting; 

19 ‘‘(2) each person present at such meeting is a 

20 Commissioner or an employee of the Commission; 

21 and 

22 ‘‘(3) an attorney from the Office of General 

23 Counsel of the Commission is present at such meet24 ing. 


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1 ‘‘(b) DISCLOSURE OF NONPUBLIC COLLABORATIVE

2 DISCUSSIONS.—Not later than 2 business days after the 

3 conclusion of a meeting held under subsection (a), the 

4 Commission shall publish on its Internet website a disclo5 sure of such meeting, including— 

6 ‘‘(1) a list of the persons who attended such 

7 meeting; and 

8 ‘‘(2) a summary of the matters discussed at 

9 such meeting, except for such matters as the Com10 mission determines may be withheld under section 

11 552b(c) of title 5, United States Code. 

12 ‘‘(c) PRESERVATION OF OPEN MEETINGS REQUIRE13 MENTS FOR AGENCY ACTION.—Nothing in this section 

14 shall alter or supersede section 552b of title 5, United 

15 States Code, with respect to any meeting of Commis16 sioners other than a meeting held under subsection (a). 

17 ‘‘(d) DEFINITIONS.—In this section: 

18 ‘‘(1) AGENCY ACTION.—The term ‘agency ac19 tion’ has the meaning given such term in section 

20 551 of title 5, United States Code. 

21 ‘‘(2) BIPARTISAN MAJORITY.—The term ‘bipar22 tisan majority’ means, when used with respect to a 

23 group of Commissioners, that such group— 

24 ‘‘(A) is a group of two or more Commis25 sioners; and 


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1 ‘‘(B) includes, for each political party of 

2 which any Commissioner is a member, at least 

3 1 Commissioner who is a member of such polit4 ical party, and, if any Commissioner has no po5 litical party affiliation, at least 1 unaffiliated 

6 Commissioner.’’. 

7 SEC. 9. ANNUAL PLAN REQUIRED. 

8 (a) AMENDMENTS.—The Federal Trade Commission 

9 Act (15 U.S.C. 41 et seq.), as amended by section 8, is 

10 further amended— 

11 (1) by redesignating section 28 as section 30; 

12 and 

13 (2) by inserting after section 27 the following 

14 new sections: 

15 ‘‘SEC. 28. ANNUAL PLAN REQUIRED. 

16 ‘‘Not later than December 1 of each year, the Com17 mission shall publish and submit to the Committees on 

18 the Judiciary and Commerce, Science, and Transportation 

19 of the Senate and the Committees on the Judiciary and 

20 Energy and Commerce of the House of Representatives 

21 a plan for the next calendar year describing the projected 

22 activities of the Commission, including each of the fol23 lowing: 

24 ‘‘(1) The policy priorities of the Commission. 


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1 ‘‘(2) Any rulemakings projected to be com2 menced. 

3 ‘‘(3) Any plans to develop guidelines or other 

4 non-regulatory guidance documents. 

5 ‘‘(4) Any plans to restructure the Commission 

6 or establish or alter working groups. 

7 ‘‘(5) Any planned projects or initiatives of the 

8 Commission, including workshops, conferences, and 

9 reports. 

10 ‘‘(6) With respect to any activities of the Com11 mission, including workshops, conferences, reports, 

12 working groups, guidance documents, or rulemak13 ings, that relate specifically to combating unfair or 

14 deceptive acts or practices that target or signifi15 cantly affect individuals who are 65 years of age or 

16 older, a description of how such activities will ad17 dress such acts or practices. 

18 ‘‘(7) Projected dates and timelines associated 

19 with any of the required disclosures in this section. 

20 ‘‘SEC. 29. REPORT ON ELDER FRAUD REQUIRED. 

21 ‘‘Not later than January 31 of each year, the Com22 mission shall publish and submit to the Committee on 

23 Commerce, Science, and Transportation of the Senate and 

24 the Committee on Energy and Commerce of the House 

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1 ment actions to address unfair or deceptive acts or prac2 tices that may have targeted or significantly affected indi3 viduals who are 65 years of age or older during the pre4 vious calendar year, including each of the following: 

5 ‘‘(1) A brief description of each such enforce6 ment action. 

7 ‘‘(2) The disposition of such enforcement ac8 tions, broken down by category. 

9 ‘‘(3) The proportion of such enforcement ac10 tions as a percentage of all enforcement actions re11 lating to unfair or deceptive acts or practices in or 

12 affecting commerce brought by the Commission.’’. 

13 (b) RULE OF CONSTRUCTION.—Nothing in the 

14 amendments made by subsection (a) shall be construed to 

15 limit or restrict the Federal Trade Commission’s activities 

16 or disclosure of information to the public, consistent with 

17 applicable law. 

18 (c) EFFECTIVE DATE; APPLICABILITY.—The amend19 ments made by subsection (a) shall take effect on the date 

20 of enactment of this Act and shall apply with respect to 

21 the first December 1 and January 31, as applicable, occur22 ring after such effective date. 

Æ 


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