ADventures in Law

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There is so much Federal Trade Commission (FTC) rulemaking going on that we needed a second blog to provide the necessary update on all the matters that are pending. And Daniel is right: Who doesn’t love a two-parter? However, as everyone knows, the sequel is always superior. Well, consider this the “The Empire Strikes Back” to Daniel’s “A New Hope.” Daniel’s blog focused on the Mag-Moss rulemakings; this will focus on all the other rules currently under construction as of February 2024.&nbsp;

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The Children’s Online Privacy Protection Rule (COPPA) was enacted by Congress in 1998 and gave powers to the FTC to enforce the law and to issue some regulations. We’ve <a href="https://www.bakerlaw.com/insights/the-times-they-are-coppa-changing-ftcs-latest-public-meeting-discusses-proposed-updates-to-childrens-privacy-rules/">previously discussed</a> the December 2023 proposed update. The FTC is seeking to strengthen the rule by, among other things, requiring a separate opt-in for targeted advertising, limiting the internal operations exception and limiting the use of personal information used to convince children to stay online more. The comment period for this proposal is open until March 11.

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The Combating Auto Retail Scams (CARS) Rule was <a href="https://www.ftc.gov/news-events/news/press-releases/2023/12/ftc-announces-cars-rule-fight-scams-vehicle-shopping">finalized by the FTC in 2023</a> under authority granted by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CARS Rule is designed to prevent junk fees and bait-and-switch claims in the sale of automobiles. The rule is currently <a href="https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-pauses-cars-rule-effective-date">paused</a> while a legal challenge against it is pending.&nbsp;&nbsp;

The <a href="https://www.ecfr.gov/current/title-16/chapter-I/subchapter-C/part-310?toc=1">Telemarketing Sales Rule</a> was created under the rulemaking authority granted to the agency under the Telephone Consumer Protection Act (TCPA). The FTC <a href="https://www.ftc.gov/news-events/news/press-releases/2022/04/federal-trade-commission-proposes-small-business-protections-against-telemarketing-tricks-traps">proposed changes to this rule</a> in April 2022, but there has been radio silence since then. All this occurred while the FCC recently <a href="https://docs.fcc.gov/public/attachments/DOC-399082A1.pdf">proposed a rule</a> under its TCPA rulemaking authority designed to close the “lead generator loophole.”&nbsp;

The Gramm-Leach-Bliley Act empowers the FTC to create and enforce the Safeguards Rule, which regulates financial institutions. The rule was <a href="https://www.ftc.gov/business-guidance/blog/2023/10/ftc-announces-new-safeguards-rule-provision-your-company-whats-required">previously updated</a> in 2023 to require nonbank financial institutions to report data breaches affecting 500 or more people. We previously discussed this update in <a href="https://www.bakerlaw.com/insights/ftc-amends-safeguards-rule-to-require-notification-of-unauthorized-data-acquisitions-to-the-agency/">greater detail</a> when it occurred.&nbsp;

In 2023, the FTC issued a <a href="https://www.ftc.gov/legal-library/browse/federal-register-notices/16-cfr-part-318-health-breach-notification-rule-nprm">Notice of Proposed Rulemaking</a> with regard to the Health Breach Notification Rule, but nothing further has come out and is still pending.&nbsp;

Also in 2023, the FTC announced <a href="https://www.ftc.gov/legal-library/browse/federal-register-notices/non-compete-clause-rulemaking">a proposed new rule</a>, the Non-Compete Clause Rule, which would prevent employers from entering into non-compete clauses with workers and require employers to rescind existing non-compete clauses. There have been no updates on this rule; however, much has been written about this proposal, and many questions exist as to its legal authority.

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With that, we wrap up our latest update on FTC rulemaking. We will keep you posted as significant developments occur in 2024.

Keeping Up with the FTC Rulemakings – Part Two