Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC Submits Budget Request and Performance Plan to Congress, (Apr 11, 2013)

By Tobias J. Gillett, J.D., LL.M.

The FTC has submitted to Congress its Fiscal Year 2014 budget request and its FY 2013 to FY 2014 Performance Plan, which lay out the agency’s goals, objectives, planned activities, and budget needs, the agency has announced.

The FTC’s Performance Plan, required by the Government Performance and Results and Modernization Act of 2010, and its Congressional Budget Justification identify three principal strategic goals of the agency: (1) protecting consumers, (2) maintaining competition, and (3) advancing performance. The Performance Plan specifies objectives within each strategic goal, strategies to carry out those objectives, implementation plans for the strategies, and measures to assess performance.

FTC goals and objectives. The Performance Plan explains that the FTC has jurisdiction over a broad array of consumer protection issues. As the FTC has limited resources, it must target its law enforcement and education efforts to areas where they may have their maximum impact and must partner with federal, state, international, and private sector entities. The Performance Plan identifies five objectives for its strategic goal of protecting consumers, including:

• Identify fraud, deception, and unfair practices that cause the greatest consumer injury

• Stop fraud, deception, unfairness, and other unlawful practices through law enforcement

• Prevent consumer injury through education

• Enhance consumer protection through research, reports, rulemaking, and advocacy

• Protect American consumers in the global marketplace by providing sound policy and technical input to foreign governments and international organizations to promote sound consumer policy

The FTC also seeks to maintain competition by blocking or remedying anticompetitive mergers and by taking enforcement actions against anticompetitive conduct. For its strategic goal of maintaining competition, the Performance Plan identifies four objectives:

• Take action against anticompetitive mergers and practices that may cause significant consumer injury

• Prevent consumer injury through education

• Enhance consumer benefit through research, reports, and advocacy

• Protect American consumers in the global marketplace by providing sound policy recommendations and technical input to foreign governments and international organizations to promote sound competition policy

The Performance Plan also sets forth methods the FTC intends to employ to enhance its performance. The Performance Plan presents these methods in relation to four functional areas: human resources, infrastructure and security, information resources, and finance and acquisition. For its strategic goal of advancing performance, the Performance Plan identifies four objectives:

• Provide effective human resources management

• Provide effective infrastructure and security management

• Provide effective information resources management

• Provide effective financial and acquisition management

FTC planned activities. The FTC’s Budget Justification outlines specific planned activities the FTC intends to engage in during FY 2013 and beyond. With respect to its goal of protecting consumers, the FTC’s intended activities include:

• Protecting consumer privacy and improving data security

• Stopping harmful uses of technology

• Protecting consumers in the financial services marketplace

• Protecting vulnerable Americans from other fraud

• Combating identity theft

• Promoting compliance in new media

• Targeting deceptive advertising affecting consumers’ health

• Protecting children in the marketplace

• Evaluating environmental marketing claims

• Serving Hispanic and African-American populations

• Ensuring compliance with FTC orders

• Globalization and cross-border enforcement

With respect to its goal of maintaining competition, the FTC’s intended activities include:

• Promoting competition in health care and pharmaceuticals

• Aggressively challenging anticompetitive mergers

• Continuing emphasis on high technology

• Preventing anticompetitive activity in energy industries

• Increasing consumer and business outreach

• Promoting global competition

• Pursuing administrative and federal litigation

• Advocating for competition before the courts and other government agencies

• Enforcing FTC orders

FY 2013 and FY 2014 budgets. In its Budget Request, the FTC lays out a FY 2014 budget of $170,230,000 to protect consumers and $130,770,000 to maintain competition, for a total of $301,000,000. This compares to a FY 2013 budget of $175,689,000 to protect consumers and $135,874,000 to maintain competition, for a total of $311,563,000. This represents a decrease of $10,563,000 from the enacted FY 2013 budget to the proposed FY 2014 budget. The budget provides for 1,176 full-time equivalent positions.

The FTC intends to decrease costs through facility efficiencies, such as streamlined guard services and lower utility costs stemming from sustainability efforts and through a decrease in costs associated with replacement of satellite space. The budget also reflects increases from mandatory pay adjustments, contracts, and inflation; technology investments; increased anticompetition expert witness costs; and increased consumer demand for its Sentinel Network Services.

FY 2012 accomplishments. The Budget Justification also reviews the FTC’s accomplishments from FY 2012 in relation to its strategic goals of protecting consumers and maintaining competition. In FY 2012, the FTC protected consumers by protecting financially distressed consumers; protecting consumer privacy, data, and computer security; prosecuting false or deceptive health claims; protecting children in the marketplace; and focusing on telemarketing, prepaid phone cards, mobile payments, cramming, and auto financing.

The FTC filed 67 new complaints in federal district court and 31 new administrative actions, and obtained 87 permanent injunctions and 17 administrative orders. It obtained orders requiring defendants to pay more than $737.1 million, obtained contempt orders totaling more than $183,000, and referred cases to the Department of Justice that resulted in more than $40.5 million in civil penalties. The FTC also produced 10 reports, 56 consumer and business education publications, 13 education videos and audio public service announcements, and three education websites and microsites.

With respect to maintaining competition, the FTC pursued 29 new competition law enforcement actions, including 25 merger enforcement challenges and four non-merger enforcement actions. The merger actions resulted in 15 consent agreements, seven transactions abandoned or restructured, and three administrative complaints. The non-merger actions included a settlement with PoolCorp over its use of alleged monopoly power in the swimming pool products market; consent orders with two of three suppliers of ductile iron pipe fittings over price fixing in that market, with an administrative case ongoing against the third; and a consent order with Puerto Rico pharmacy owners over price fixing in contracts with insurance companies and pharmacy benefit managers. The FTC also conducted an initial review of hundreds of mergers pursuant to the Hart-Scott-Rodino Act and conducted various workshops, reports, and advocacy efforts.

News: Antitrust ConsumerProtection FederalTradeCommissionNews