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Federal Register / Vol. 86, No. 138 / Thursday, July 22, 2021 / Rules and Regulations
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provisions allow Commission to designate disputed issues of material fact earlier in the rulemaking proceeding with the issuance of the Notice of Proposed Rulemaking NPRM
and avoid delaying proceedings with unrelated matters late in the process.
These procedures also enhance Commission transparency by requiring that records of both written and oral communications to a Commissioner or their advisors during a rulemaking proceeding will be placed in the rulemaking record and be available to the public.
The revised rules respect the underlying statutory requirements of Section 18 that provide ample transparency and opportunity for public participation in the promulgation of Trade Regulation Rules. These requirements include: The publication of an ANPRM for comment; the advance submission of the ANPRM to our congressional oversight committees; the publication of an NPRM; the advance submission of the NPRM to the congressional committees; an informal hearing to resolve any disputed issue of material fact; and publication of a final rule accompanied by a statement of basis and purpose.5 These statutory guidelines provide for substantially greater public engagement and congressional oversight than the Administrative Procedure Act, under which most federal rulemaking is conducted. The Commissions rules of practice shouldand now doadhere closely to this statutory framework.
III. Conclusion Revitalizing the Commissions ability to issue timely Trade Regulation Rules under Section 18 will provide much needed clarity about how our centuryold statute applies to contemporary economic realities and will allow the FTC to define with specificity what acts or practices are unfair or deceptive under Section 5 of the FTC Act.
Prospective trade rules will give businesses and consumers concrete guidance about their responsibilities and rights. Importantly the Commission will be able to exercise its prosecutorial discretion to seek a wide variety of relief, including redress, civil monetary penalties, reformation of contracts, and other relief, against first-time violators of Trade Regulation Rules under Section 19 of the FTC act. While rulemaking is no substitute for a permanent fix to our Section 13b authority to obtain monetary relief, trade rules can help ensure businesses will no longer be able to take advantage of consumers and 5 15

U.S.C. 57a.

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cement their market position by engaging in practices that do people real harm until we catch them and take them to court the first time.
Self-imposed red tape has only created uncertainty and delay for the important business of this Commission.
The imposition of those requirements decades ago was the FTCs signal to the business world that the brief era of Section 18 rulemaking had come to an end. With the adoption of these streamlined procedures we wish to signal a change in Commission practice and ambition: We intend to fulfil our mission to protect against unfair and deceptive practices in commerce and provide consumers and businesses with due process, clarity, and transparency while crafting the rules to do so.
Dissenting Statement of Commissioner Christine S. Wilson Regulations, even well-intentioned ones, impose costs that stifle innovation, raise the costs of doing business, limit consumer choice and increase the prices that consumers must pay, and ultimately undercut Americas global competitiveness.1 Congress empowered the FTC to issue trade regulations when it passed the Magnuson-Moss Act.2 At the same time, it imposed significant procedural obligations on the Commission to cabin the agencys broad rulemaking discretion.
In the wake of the Magnuson-Moss Act, the agency engaged in a flurry of rulemaking activity that sought to regulate broad swaths of the economy.3
The negative reaction from businesses and many in Congress was swift. During 1 I have issued several statements discussing this previously. See Regulatory Review of Safeguards Rule, Dissenting Statement of Commissioner Noah Joshua Phillips and Commissioner Christine S.
Wilson Mar. 5, 2019, available at https
www.ftc.gov/system/files/documents/
publicstatements/1466705/reg_review_of_
safeguards_rule_cmr_phillips_wilson_dissent.pdf;
Notice of Proposed Rulemaking: Energy Labeling Rule, Dissenting Statement of Christine S. Wilson Dec. 10, 2018, available at https www.ftc.gov/
system/files/documents/publicstatements/1433166/
2018-12-7_statement_of_c_wilson_energy_
labeling.pdf.
2 Magnuson-Moss Warranty Act, Public Law 93
637, 88 Stat. 2183.
3 I have described some of these rulemaking initiatives in recent statements. See Notice of Proposed Rulemaking for the Energy Labeling Rule, Dissenting Statement of Commissioner Christine S.
Wilson Dec. 22, 2020, available at https
www.ftc.gov/system/files/documents/public_
statements/1585242/commission_wilson_
dissenting_statement_energy_labeling_rule_final1222-2020revd2.pdf; Advance Notice of Proposed Rulemaking for Regulatory Review of the Amplifier Rule, Concurring Statement of Commissioner Christine S. Wilson Dec. 17, 2020, available at https www.ftc.gov/system/files/documents/
public_statements/1585038/
p974222amplifierrulewilsonstatement.pdf.

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this period, the Washington Post famously accused the agency of attempting to be the national nanny. 4
Congress found that the agencys rulemaking efforts were filled with excessive ambiguity, confusion, and uncertainty. 5 Backlash from the agencys sweeping regulatory efforts of the late 1970s culminated in the Federal Trade Commission Improvements Act of 1980, which imposed additional procedural obligations on Section 18
rulemaking efforts.6 In other words, Congress sought to cabin the agencys discretion even more in what famed legal scholar Earnest Gellhorn characterized as The Wages of Zealotry. 7
Considering the backlash to this agencys earlier era of unbounded rulemaking activity, I am gravely concerned about todays proposals to pare down procedural safeguards embedded in our rules of practice related to Section 18 rulemaking. I want to thank Commissioner Slaughter for her transparency in explaining the materials included in the Commissions Section 18 rule proposal. Making this kind of information available to the public helps to foster the publics understanding of our proposal and also creates an opportunity for more open dialogue. Considering the proposal outlined by Commissioner Slaughter today, I would find it constructive to discuss a number of questions.
First, with respect to the objective management of the rulemaking process:
The role of a Presiding Officer is to oversee the fair adjudication of the hearing process and make independent recommendations to the Commission based on relevant and material evidence. During the 1970s rulemaking spree, the Presiding Officer was viewed as a puppet of agency management, leading to the perception that outcomes were biased and predetermined. To address this issue and build trust in the rulemaking process, Congress imposed obligations designed to ensure the independence of the Presiding Officer.8
The Commission, heeding Congressional concerns regarding independence, required the Chief Administrative Law Judge to serve as the Chief Presiding Officer and 4 The FTC as National Nanny, Wash. Post Mar.
1, 1978, https www.washingtonpost.com/archive/
politics/1978/03/01/the-ftc-as-national-nanny/
69f778f5-8407-4df0-b0e9-7f1f8e826b3b/.
5 S. Rep. No. 96500, at 3 1979.
6 Federal Trade Commission Improvements Act of 1980, Public Law 96252, 94 Stat. 374.
7 Ernest Gellhorn, The Wages of Zealotry: The FTC Under Siege, 4 Regulation 33 1980.
8 Federal Trade Commission Improvements Act of 1980, Public Law 96252, 94 Stat. 374.

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