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[Federal Register Volume 89, Number 247 (Thursday, December 26, 2024)]
[Proposed Rules]
[Pages 104905-104908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30718]

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FEDERAL TRADE COMMISSION

16 CFR Part 461

RIN 3084-AB71

Trade Regulation Rule on Impersonation of Government and 
Businesses

AGENCY: Federal Trade Commission.

ACTION: Initial notice of informal hearing; final notice of informal 
hearing; list of Hearing Participants; requests for submissions from 
Hearing Participants.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') 
published a supplemental notice of proposed rulemaking (``SNPRM'') in 
the Federal Register on March 1, 2024, titled ``Trade Regulation Rule 
on Impersonation of Government and Businesses'' (``Rule''), which 
requested additional public comment on whether the Commission should 
revise the title of the Rule, add a prohibition on the impersonation of 
individuals, and extend liability for violations of the Rule to parties 
who provide goods and services with knowledge or reason to know that 
those goods or services will be used in impersonation schemes that 
violate the Rule. The SNPRM announced the opportunity for interested 
parties to present their positions orally at an informal hearing. Six 
commenters requested to participate at the informal hearing. The 
Commission has decided not to proceed with the SNPRM's proposed means 
and instrumentalities provision at this time. The purpose of the 
informal hearing will be to address issues relating to the proposed 
prohibition on impersonating individuals.

DATES: 
    Hearing date: The informal hearing will be conducted virtually on 
January 17, 2025, at 1 p.m. Eastern.
    Participation deadline: If you are a Hearing Participant and would 
like to submit your oral presentation in writing or file a 
supplementary documentary submission, you must do so on or before 
January 9, 2025.

ADDRESSES: Hearing Participants may submit their oral presentations in 
writing or file supplementary documentary submissions, online or on 
paper, by following the instructions in part IV of the SUPPLEMENTARY 
INFORMATION section. Write ``Impersonation SNPRM, R207000'' on your 
submission and send it electronically to [email protected], 
with a copy to [email protected]. If you prefer to file your submission on 
paper, mail it via overnight service to: Federal Trade Commission, 
Office of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 
(Annex I), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Thomas Harris, [email protected], (202-
326-3620), Claire Wack, [email protected], (202-326-2836), and Ryan 
McAuliffe, [email protected], (202-326-3044).

SUPPLEMENTARY INFORMATION:

I. Background

    Following public comment on an advance notice of proposed 
rulemaking (``ANPRM''), 86 FR 72901 (Dec. 23, 2021), the FTC published 
a notice of proposed rulemaking (``NPRM''), 87 FR 62741 (Oct. 17, 
2022), entitled ``Trade Regulation Rule on Impersonation of Government 
and Business'' (``Rule''), in the Federal Register, proposing to add 
part 461 to title 16 of the Code of Federal Regulations, chapter I, to 
prohibit the impersonation of government, businesses, or their 
officers. On March 30, 2023, the Commission published an initial notice 
of informal hearing, 88 FR 19024, and on May 4, 2023, Chief 
Administrative

[[Page 104906]]

Law Judge Michael Chappell presided over the informal hearing, which 
was viewable live to the public from the Commission's website, https://www.ftc.gov. Based upon the comments submitted regarding the proposed 
provision imposing means and instrumentalities liability,\1\ the 
Commission decided that this provision warranted further analysis and 
consideration, and stated that it would continue to consider the issue, 
including soliciting additional comment.
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    \1\ See SNPRM, 89 FR 15072 (Mar. 1, 2024), https://www.federalregister.gov/documents/2024/03/01/2024-03793/trade-regulation-rule-on-impersonation-of-government-and-businesses.
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    On March 1, 2024, the Commission published its final Rule in the 
Federal Register, 89 FR 15017. In that same issue of the Federal 
Register, the Commission also published the SNPRM, 89 FR 15072, 
requesting additional public comment on whether the Commission should 
revise the title of the Rule, add a prohibition on the impersonation of 
individuals, and extend liability for violations of the Rule to parties 
who provide goods and services with knowledge or reason to know that 
those goods or services will be used in impersonation schemes that 
violate the Rule.
    In accordance with section 18(b)(1) of the FTC Act, 15 U.S.C. 
57a(b)(1), which requires the Commission to provide the opportunity for 
an informal hearing in section 18 rulemaking proceedings, the SNPRM 
also announced the opportunity for interested persons to present their 
positions orally at an informal hearing. Six of the commenters 
requested the opportunity to present their position orally or 
participate at an informal hearing. Three additional commenters 
requested the opportunity to participate in a hearing if one were held 
but did not request a hearing themselves.
    After further consideration, the Commission has decided not to 
proceed with the SNPRM's proposed means and instrumentalities provision 
(proposed Sec.  461.5) at this time. Therefore, the purpose of the 
informal hearing will be to address issues relating to the proposed 
prohibition on impersonating individuals (proposed Sec.  461.4).

II. The Requests for an Informal Hearing; Presentation of Oral 
Submissions

    Section 18 of the FTC Act, 15 U.S.C. 57a, as implemented by the 
Commission's Rules of Practice, 16 CFR 1.11(e), provides interested 
persons with the opportunity to present their positions orally at an 
informal hearing upon request.\2\ To make such a request, a commenter 
must submit, no later than the close of the comment period for the 
SNPRM, (1) a request to make an oral submission, if desired; (2) a 
statement identifying the interested person's interests in the 
proceeding; and (3) any proposal to add disputed issues of material 
fact to be addressed at the hearing.\3\
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    \2\ 16 CFR 1.11(e).
    \3\ 16 CFR 1.11(e)(1) through (3).
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    The following six commenters requested an informal hearing 
generally in accordance with the requirements of 16 CFR 1.11(e):
    1. The Abundance Institute; \4\
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    \4\ The Abundance Institute describes itself as ``a mission-
driven non-profit dedicated to creating the policy and cultural 
environment where emerging technologies can develop and thrive in 
order to perpetually expand widespread human prosperity.'' Abundance 
Institute Cmt. at 1.
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    2. Andreesen Horowitz (a16z); \5\
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    \5\ Andreesen Horowitz of a16z states that a16z is the ``world's 
largest venture capital firm'' and a ``leading investor'' in 
generative artificial intelligence (``AI'') ``with a wide-ranging 
portfolio of companies'' and the belief that AI ``should be able to 
do a better job than unaided human intelligence in solving the 
complex challenges facing humanity, thereby creating a better 
world.'' a16z Cmt. at 1-2.
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    3. The Consumer Technology Association (CTA); \6\
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    \6\ CTA states that it is the largest technology trade 
association in North America, whose members range from startups to 
established brands. CTA Cmt. at 1.
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    4. Software & Information Industry Association (SIIA); \7\
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    \7\ SIIA states that it is a trade organization made up of 
companies engaged in the information economy, ``including digital 
content providers and users in academic publishing, education 
technology companies, software developers, cloud service providers, 
financial information firms, and companies that host platforms used 
by billions of people worldwide.'' SIIA Cmt. at 1.
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    5. TechFreedom; \8\ and
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    \8\ TechFreedom states that it is a ``nonprofit, nonpartisan 
think tank . . . dedicated to promoting technological progress that 
improves the human condition.'' TechFreedom Cmt. at 1.
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    6. TechNet.\9\
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    \9\ TechNet describes itself as ``the national, bipartisan 
network of technology CEOs and senior executives that promotes the 
growth of the innovation economy by advocating a targeted policy 
agenda at the federal and 50-state level.'' TechNet Cmt. at 1.
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    In addition, while the following commenters stated that an informal 
hearing was not necessary, they requested the opportunity to make an 
oral presentation if the Commission holds an informal hearing at 
others' request:
    1. Electronic Privacy Information Center (EPIC), et al.; \10\
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    \10\ This comment was ``submitted by the following consumer and 
privacy advocacy organizations: Electronic Privacy Information 
Center (EPIC), National Consumer Law Center on behalf of its low-
income clients, Consumer Federation of America, National Consumers 
League, Consumer Action, and National Association of Consumer 
Advocates.'' EPIC, et al. Cmt. at 2.
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    2. The Internet & Television Association (NCTA); \11\ and
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    \11\ NCTA states that it is ``the principal trade association 
for the U.S. cable industry, representing cable operators serving 
nearly 90% of the nation's cable television households and cable 
program networks.'' NCTA Cmt. at 1.
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    3. Truth in Advertising (TINA).\12\
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    \12\ TINA describes itself as ``a nonpartisan, nonprofit 
consumer advocacy organization whose mission is to combat deceptive 
advertising and consumer fraud; promote understanding of the serious 
harms commercial dishonesty inflicts; and work with consumers, 
businesses, independent experts, synergy organizations, self-
regulatory bodies and government agencies to advance countermeasures 
that effectively prevent and stop deception in our economy.'' TINA 
Cmt. at 2.
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    The Commission finds that the requests submitted were generally 
adequate and therefore will hold an informal hearing. The nine 
commenters listed will have the opportunity to make oral presentations 
during the informal hearing. The Commission does not find it necessary 
to identify any group of interested persons with the same or similar 
interest in the proceeding.\13\
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    \13\ 16 CFR 1.12(a)(5) requires the initial notice of informal 
hearing to include a ``list of the groups of interested persons 
determined by the Commission to have the same or similar interests 
in the proceeding.'' 16 CFR 1.12(d) explains that the Commission 
``will, if appropriate, identify groups of interested persons with 
the same or similar interests in the proceeding.'' Doing so 
facilitates the Commission's ability to ``require any group of 
interested persons with the same or similar interests in the 
proceeding to select a single representative to conduct cross-
examination on behalf of the group.'' Id.
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III. Disputed Issues of Material Fact; Final Notice

    In the SNPRM, the Commission did not identify any disputed issues 
of material fact that needed to be resolved at an informal hearing. 
However, the Commission may still do so in this initial and final 
notice of informal hearing, either on its own initiative or in response 
to a persuasive showing from a commenter.\14\ To be appropriate for 
cross-examination or rebuttal, a disputed issue of material fact must 
raise ``specific facts'' that are ``necessary to be resolved.'' \15\
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    \14\ See 16 CFR 1.12(a)(3); 15 U.S.C. 57a(c)(2)(B); see also 89 
FR 15072 (Mar. 1, 2024).
    \15\ 16 CFR 1.13(b)(1)(i) (issues that ``must'' be considered 
for cross-examination or rebuttal are only those disputed issues of 
fact the Commission determines to be ``material'' and ``necessary to 
resolve'').
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    In response to the SNPRM, six commenters proposed disputed issues 
of material fact related to proposed Sec.  461.5 (Means and 
Instrumentalities: Provision of Goods or Services for Unlawful 
Impersonation Prohibited) regarding extending liability to parties who 
provide goods or services with

[[Page 104907]]

knowledge or reason to know that they will be used in impersonation 
schemes.
    The Abundance Institute claimed in its comment: ``The record 
contains reports of business practices described as `means and 
instrumentalities' violations. But none of the reports identify even a 
single incident (let alone a `prevalent' practice) of a party 
`pass[ing] on a false or misleading representation' as is necessary to 
meet the first prong of the two-prong test for M&I violations of 
Section 5.'' \16\
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    \16\ The Abundance Institute Cmt. at 15.
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    CTA proposed three disputed issues of material fact: \17\
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    \17\ CTA Cmt. at 11-12. CTA additionally requested to cross 
examine witnesses pursuant to 15 U.S.C. 57a(c)(2)(B) as to these 
proposed disputed issues of material fact.
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    1. ``Whether the Means and Instrumentalities Proposal imposes an 
affirmative obligation on companies to address the misuse of their 
products and services, and whether there are any costs associated with 
implementing compliance plans to satisfy this requirement.''
    2. ``Whether the Means and Instrumentalities Proposal will chill 
the development of new products and services that could be misused by 
fraudsters.''
    3. ``Whether the Means and Instrumentalities Proposal's liability 
framework is responsive to the known trends and evidence of online 
fraud.''
    TechNet proposed two disputed issues of material fact:
    1. ``Whether the means and instrumentalities provision imposes an 
affirmative obligation to address the misuse of tools, products, and 
services and the costs associated with such compliance programs.''
    2. ``Whether the means and instrumentalities provision will chill 
the development and deployment of legitimate tools that can be 
misappropriated for impersonation.''
    SIIA proposed three disputed issues of material fact:
    1. ``Whether the Commission has accurately estimated the costs 
associated with the proposed rule.'' \18\
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    \18\ See SIIA Cmt. at 7. Although it mentions generally the 
estimate of potential costs of the ``proposed rule,'' the Commission 
understands the substance of this proposed disputed issue of 
material fact to concern the estimated costs specifically associated 
with proposed Sec.  461.5 because SIIA stated in its comment that it 
recommends adoption of the other proposed amendments regarding 
individual impersonation. Id. at 1 (``SIIA supports the Commission's 
proposed extension of the impersonation rule to individuals.'').
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    2. ``Whether the means and instrumentalities provision would impose 
an affirmative obligation on companies to address misuses of goods and 
services and, if so, costs associated with implementing additional 
compliance programs or efforts to address potential misuse.''
    3. ``Whether the means and instrumentalities provision will impede 
the development of technologies that have positive societal benefits 
but could be misused to enable impersonation.''
    a16z quoted the following portion of a paragraph from the SNPRM, 
noting that it disputed ``those material facts[:]'' ``Because the 
deceptive impersonation of individuals is already prohibited by section 
5 of the FTC Act, and section 5 similarly makes unlawful providing the 
means and instrumentalities for a violation of section 5 of the Act, 
the SNPRM would not change the state of law in terms of what is legal 
and what is illegal. Furthermore, the proposed amendments to the Rule 
would impose no recordkeeping requirement and would not create or 
impose any compliance costs.'' \19\ Relatedly, it proposed as a 
disputed issue of material fact ``the existence and magnitude'' of 
``direct and indirect harms'' that the ``proposed constructive 
knowledge standard'' in Sec.  461.5 would, in a16z's view, ``inflict.'' 
\20\
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    \19\ a16z Cmt. at 20 (quoting SNPRM, 89 FR 15078). The 
Commission does not understand a16z's proposed disputed issue of 
material fact regarding the quoted portion of this paragraph to 
concern proposed Sec.  461.4. Like SIIA, ``a16z supports expanding 
the Impersonation Rule's scope to impersonations of individuals.'' 
Id. at 2.
    \20\ Id. at 20-21.
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    TechFreedom proposed as disputed issues of material fact whether 
``the rule would apply to AI tools covered by Section 230'' and ``the 
applicability of a constructive knowledge standard'' in proposed Sec.  
461.5.\21\
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    \21\ TechFreedom Cmt. at 2-3.
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    Each of these proposed disputed issues of material fact relates to 
the Sec.  461.5 proposal to extend liability to parties who provide 
goods or services with knowledge or reason to know that they will be 
used in impersonation schemes. After further consideration, the 
Commission has decided not to proceed with proposed Sec.  461.5 at this 
time. It is therefore not necessary to address the proposed disputed 
issues concerning Sec.  461.5, and the purpose of the informal hearing 
will be to address issues relating to proposed Sec.  461.4's 
prohibition on impersonating individuals.
    Thus, the Commission finds that there are no ``disputed issues of 
material fact'' to resolve at the informal hearing \22\ and no need for 
cross-examination or rebuttal submissions.\23\
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    \22\ If any interested person seeks to have additional disputed 
issues of material fact designated, the person may make such request 
to the presiding officer pursuant to 16 CFR 1.13(b)(1)(ii).
    \23\ 16 CFR 1.12(b).
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    This initial notice of informal hearing also serves as the ``final 
notice of informal hearing.'' \24\ A final notice of informal hearing 
is limited in its substance to matters that arise only when the 
Commission designates disputed issues of material fact: who will 
conduct cross-examination; whether any interested persons with similar 
interests will be grouped together for such purposes; and who will make 
rebuttal submissions.\25\ Because cross-examination and submissions of 
rebuttal evidence are not anticipated to occur in this informal 
hearing, no separate final notice of informal hearing is necessary.
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    \24\ 16 CFR 1.12(c).
    \25\ Id.
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IV. List of Hearing Participants; Making an Oral Statement; Requests 
for Documentary Submissions

    Pursuant to Commission Rule Sec.  1.12(a)(4), 16 CFR 1.12(a)(4), 
the following is the list of interested persons (``Hearing 
Participants'') who will have the opportunity to make oral 
presentations at the informal hearing:
    1. The Abundance Institute;
    2. Andreesen Horowitz (a16z);
    3. The Consumer Technology Association (CTA);
    4. Software & Information Industry Association (SIIA);
    5. TechFreedom;
    6. TechNet;
    7. Electronic Privacy Information Center (EPIC) (et al.);
    8. The Internet & Television Association (NCTA); and
    9. Truth in Advertising (TINA).
    Because the Commission has decided not to proceed with proposed 
Sec.  461.5, the purpose of the hearing will be to address issues 
relating to the remaining proposal to prohibit impersonation of 
individuals in Sec.  461.4. Oral statements will be limited to 15 
minutes, although they may be supplemented by documentary submissions, 
and the presiding officer may grant an extension of time for good cause 
shown. Transcripts of the oral statements will be placed in the 
rulemaking record. Hearing Participants will be provided with 
instructions as to how to participate in the virtual hearing.
    If you are a Hearing Participant and would like to submit your oral 
representation in writing or file a supplementary documentary 
submission, please write ``Impersonation SNPRM, R207000'' on your 
submission and send it

[[Page 104908]]

electronically to [email protected], with a copy to 
[email protected]. If you prefer to file your submission on paper, mail it 
by overnight service to: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex I), 
Washington, DC 20580.
    If you file a documentary submission under this section, your 
submission--including your name and your State--will be placed on the 
public record of this proceeding, including on the website https://www.ftc.gov. Because your documentary submission will be placed on the 
public record, you are responsible for making sure that it does not 
include any sensitive or confidential information. In particular, your 
submission should not contain sensitive personal information, such as 
your or anyone else's Social Security number; date of birth; driver's 
license number or other State identification number or foreign country 
equivalent: passport number; financial account number; or credit or 
debit card number. You are also solely responsible for making sure your 
documentary submission doesn't include any sensitive health 
information, such as medical records or other individually identifiable 
health information. In addition, your documentary submission should not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential''--as provided in section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule Sec.  
4.10(a)(2), 16 CFR 4.10(a)(2)--including, in particular, competitively 
sensitive information such as costs, sales statistics, inventories, 
formulas, patterns, devices, manufacturing processes, or customer 
names.
    Documentary submissions containing material for which confidential 
treatment is requested must be filed in paper form, must be clearly 
labeled ``Confidential,'' and must comply with Commission Rule Sec.  
4.9(c), 16 CFR 4.9(c). In particular, the written request for 
confidential treatment that accompanies the submission must include the 
factual and legal basis for the confidentiality request and must 
identify the specific portions to be withheld from the public record. 
See Commission Rule Sec.  4.9(c). Your documentary submission will be 
kept confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your documentary 
submission has been posted publicly at https://www.ftc.gov--as legally 
required by Commission Rule Sec.  4.9(b), 16 CFR 4.9(b)--we cannot 
redact or remove it, unless you submit a confidentiality request that 
meets the requirements for such treatment under Commission Rule Sec.  
4.9(c), 16 CFR 4.9(c), and the General Counsel grants that request.
    Visit the FTC website to read this document and the news release 
describing it. The FTC Act and other laws that the Commission 
administers permit the collection of submissions to consider and use in 
this proceeding as appropriate. The Commission will consider all timely 
and responsive documentary submissions it receives from the Hearing 
Participants on or before January 9, 2025. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
    Hearing Participants who need assistance should indicate as much in 
their submissions, and the Commission will endeavor to provide 
accommodations. Hearing Participants without the computer technology 
necessary to participate in video conferencing will be able to 
participate in the informal hearing by telephone; they should indicate 
as much in their submissions.

V. Conduct of the Informal Hearing; Role of Presiding Officer

    The Commission's Chief Presiding Officer, the Chair, has appointed 
and designates Administrative Law Judge for the Federal Trade 
Commission, the Honorable Jay L. Himes, to serve as the presiding 
officer of the informal hearing. Judge Himes will conduct the informal 
hearing virtually using video conferencing starting at 1 p.m. Eastern 
on January 17, 2025. The informal hearing will be available for the 
public to watch live from the Commission's website, https://www.ftc.gov, and a recording or transcript of the informal hearing will 
be placed in the rulemaking record.
    Because there are no ``disputed issues of material fact'' to 
resolve at the informal hearing, the presiding officer is not 
anticipated to make a recommended decision.\26\ The role of the 
presiding officer shall include presiding over and ensuring the orderly 
conduct of the informal hearing, including selecting the sequence in 
which oral statements will be heard, and placing the transcript and any 
additional written submissions received into the rulemaking record. The 
presiding officer may prescribe additional procedures or issue rulings 
in accordance with Commission Rule Sec.  1.13, 16 CFR 1.13. In 
execution of the presiding officer's obligations and responsibilities 
under the Commission Rules, the presiding officer may issue additional 
public notices.
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    \26\ See 16 CFR 1.13(d) (``The presiding officer's recommended 
decision will be limited to explaining the presiding officer's 
proposed resolution of disputed issues of material fact.'').
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VI. Communications by Outside Parties to the Commissioners or Their 
Advisors

    Pursuant to Commission Rule Sec.  1.18(c)(1), 16 CFR 1.18(c)(1), 
the Commission has determined that communications with respect to the 
merits of this proceeding from any outside party to any Commissioner or 
Commissioner advisor shall be subject to the following treatment. 
Written communications and summaries or transcripts of oral 
communications shall be placed on the rulemaking record if the 
communication is received before the participation deadline. They shall 
be placed on the public record if the communication is received later. 
Unless the outside party making an oral communication is a Member of 
Congress, such communications are permitted only if advance notice is 
published in the Weekly Calendar and Notice of ``Sunshine'' 
Meetings.\27\
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    \27\ See 15 U.S.C. 57a(i)(2)(A); 16 CFR 1.18(c).

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2024-30718 Filed 12-23-24; 8:45 am]
BILLING CODE 6750-01-P
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