IB 
Union Calendar No. 685 
114TH CONGRESS 
2D SESSION 
H. R. 5510 
[Report No. 114–875, Part I] 
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 Com-
mittee 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 juris-
diction of the committee concerned 
DECEMBER 13, 2016 
Reported from the Committee on Energy and Commerce with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
DECEMBER 13, 2016 
The Committee on the Judiciary discharged; committed to the Committee of 
the Whole House on the State of the Union and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on June 16, 2016] 
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A BILL 
To amend the Federal Trade Commission Act to establish 
new requirements relating to investigations, consent or-
ders, and reporting requirements, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives 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 rec-
ommendations. 
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 rea-
sonably avoidable by consumers themselves and 
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not outweighed by countervailing benefits to con-
sumers or to competition. 
‘‘(B) 
SUBSTANTIAL
INJURY
TO
CON-
SUMERS.—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 prac-
tice 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 substan-
tial injury if the act or practice raises a signifi-
cant risk of concrete harm. 
‘‘(C) CONSIDERATIONS REQUIRED.—In de-
termining whether an act or practice causes or 
is likely to cause substantial injury to consumers 
under this subsection, the Commission shall con-
sider 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 re-
sults only in emotional or other more sub-
jective harm. 
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‘‘(2) NET EFFECTS OF INJURY REQUIRED.— 
‘‘(A) CONSIDERATIONS REQUIRED.—An act 
or practice is not unfair unless the act or prac-
tice is injurious in its net effects. In determining 
whether an act or practice is injurious in its net 
effects, the Commission shall consider the fol-
lowing: 
‘‘(i) The various costs for a remedy, in-
cluding the costs to the parties directly be-
fore the Commission. 
‘‘(ii) The burdens on society in general 
in the form of increased paperwork, in-
creased regulatory burdens on the flow of 
information, reduced incentives to innova-
tion and capital formation, and other simi-
lar matters. 
‘‘(B) CONSUMER DECISIONS.—The Commis-
sion may not second-guess the wisdom of par-
ticular consumer decisions, but may consider 
whether the act or practice unreasonably creates 
or takes advantage of an obstacle to the free exer-
cise of consumer decisionmaking. 
‘‘(3) PUBLIC POLICY CONSIDERATIONS.—In de-
termining whether an act or practice is unfair, the 
Commission may consider established public policies 
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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 subsections: 
‘‘(o) TERMINATION CLAUSE REQUIRED FOR CONSENT 
ORDERS.—Any consent order entered into by the Commis-
sion 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, partner-
ship, or corporation subject to the consent order or requires 
a time limit longer than 8 years based on the factors de-
scribed 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 
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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 Commis-
sion determines that the consent order has achieved its pur-
poses, 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 effec-
tive for a period of at least five years may petition the Com-
mission 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, 
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the Commission determines that the consent order has 
achieved its purposes, the Commission shall terminate the 
consent order.’’. 
(b) EFFECTIVE DATE; APPLICABILITY.—The amend-
ment 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 INVES-
TIGATIONS. 
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 inves-
tigations with respect to unfair or deceptive acts or 
practices, and with respect to unfair methods of com-
petition, in or affecting commerce (within the mean-
ing of subsection (a)(1)), detailing— 
‘‘(A) the number of such investigations the 
Commission has commenced; 
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‘‘(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 re-
sulted 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 deci-
sion not to continue such investigation; and 
‘‘(ii) of the industry sectors of the per-
sons, partnerships, or corporations who are 
subjects of such investigation. 
‘‘(2) CONSENT
REQUIRED.—The Commission 
shall not include in a report required under para-
graph (1) the description required under subpara-
graph (D) of such paragraph unless the Commission 
has— 
‘‘(A) provided to each person, partnership, 
or corporation who is a subject of the investiga-
tion a notification containing the description to 
be included in the report; and 
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‘‘(B) obtained the consent of each such per-
son, partnership, or corporation to the inclusion 
of the description in the report. 
‘‘(3) PRIVACY PROTECTION.—The description re-
quired 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 in-
formation that identifies the person, partnership, or 
corporation.’’. 
SEC. 5. REQUIREMENT OF ANALYSIS AND RATIONALE FOR 
LEGISLATIVE 
AND 
REGULATORY 
REC-
OMMENDATIONS. 
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 unless— 
‘‘(1) the Commission publishes any economic 
analysis or advice prepared by the Bureau of Eco-
nomics of the Commission relating to such rec-
ommendation; or 
‘‘(2) if no such economic analysis or advice was 
prepared, the Commission indicates, in writing as 
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part of such 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 regu-
latory 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; 
‘‘(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; 
‘‘(4) the recommendation is submitted to another 
Federal agency in response to a notice of proposed 
rulemaking, including comments to the Federal Com-
munications Commission; or 
‘‘(5) the recommendation is submitted to the 
United Kingdom, the European Union or members 
thereof, including recommendations to the European 
Parliament, the European Commission, or any data 
protection authorities of any member state with re-
gard to cross-border data flows and other privacy and 
data security matters.’’. 
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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 com-
petition 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 Com-
mission 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 state-
ments of policy, or similar guidance, unless the acts or 
practices violate a provision of law enforced by the Commis-
sion. 
‘‘(B) Compliance with any guidelines, general state-
ment of policy, or similar guidance issued by the Commis-
sion may be used as evidence of compliance with the provi-
sion of law under which the guidelines, general statement 
of policy, or guidance was issued. 
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‘‘(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 pol-
icy, 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 para-
graph (2), a covered investigation shall terminate at 
the expiration of the six-month period beginning on 
the date on which a covered verifiable written commu-
nication is sent by the Commission. 
‘‘(2) EXCEPTION.—Paragraph (1) does not apply 
if— 
‘‘(A) an additional covered verifiable writ-
ten 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 
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‘‘(C) the Commission determines in a vote, 
within 30 days after the expiration of such pe-
riod, that the Commission did not send a covered 
verifiable written communication during such 
period because of excusable neglect or a cir-
cumstance 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 investiga-
tion by verifiable written communication. 
‘‘(B) COVERED VERIFIABLE WRITTEN COM-
MUNICATION.—The term ‘covered verifiable writ-
ten communication’ means a verifiable written 
communication relating to an investigation con-
ducted 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: 
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