The FTC is the nation’s premier consumer-protection agency. Every year, it holds countless bad actors accountable for abuses committed against everyday Americans, ranging from identity theft and fraud to anticompetitive practices in violation of federal antitrust law. The agency has proven to be a particularly effective tool for holding Big Tech accountable for its many misdeeds. While the FTC can, and does, enforce the law through administrative proceedings, it often takes its claims against bad actors directly to court, which can provide quick and effective relief. Many times, the mere threat of FTC action is enough to prevent illegal conduct.
For decades, the FTC has used Section 13(b) of the Federal Trade Commission Act not only to obtain injunctions preventing future unlawful conduct, but also to force companies and individuals to relinquish money they wrongfully obtained from the public. That all changed on April 22, when the Supreme Court issued its long-anticipated decision in AMG Capital Management, LLC v. FTC. In a unanimous opinion authored by Justice Stephen Breyer, the high court ruled that Section 13(b) does not authorize the FTC to seek monetary disgorgement from businesses that engage in abusive practices. While the FTC may still obtain a court order forbidding a company from continuing its bad conduct, the agency must rely on a less efficient—and less effective—administrative process to recoup money taken as a result of that conduct.
It would be an understatement to say that the Court’s decision represents a setback for the FTC’s efforts to hold Big Tech accountable for abuses against Americans. Over the past five decades, the FTC had used Section 13(b) to return literally billions of dollars to everyday Americans—money that seedy companies wrongfully took from unsuspecting consumers. For example, Google and its subsidiary YouTube agreed to a record $170 million settlement in 2019 after the FTC brought an enforcement action in federal court challenging YouTube’s practice of illegally collecting personal information from children without their parents’ consent. The Supreme Court’s elimination of the FTC’s authority to seek disgorgement will make recoupments such as this impossible. In fact, even before the Court rendered its decision, companies under investigation by the FTC began refusing to agree to settlements, predicting (correctly) that the FTC would soon lack the ability to obtain court-ordered equitable relief.
Congress should send a bill to the president’s desk without delay. No one should be above the law—not even Big Tech.
Mike Davis is president and founder of the Internet Accountability Project. He is a former top attorney for the United States Senate Committee on the Judiciary and previously served in the United States Department of Justice. Davis also clerked for Justice Neil Gorsuch, both on the Tenth Circuit and on the Supreme Court.
The views expressed in this article are the writer’s own.
