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With Simons out, Biden likely to appoint two FTC commissioners

TAGS: Supplements
Federal Trade Commission 2019
The Biden administration will likely need to fill two vacancies at the Federal Trade Commission.

Joseph Simons, an antitrust lawyer who has led the FTC since May 2018, is stepping down from his post effective Jan. 29.

Simons made the announcement Tuesday, on the eve of the inauguration of the 46th president of the United States: Joe Biden.

Meanwhile, Biden designated Rebecca Kelly Slaughter as the FTC's acting chair, the agency announced Thursday. Slaughter has served as an FTC commissioner since 2018 and previously served as chief counsel to Sen. Charles Schumer of New York, a Democrat who is now Senate Majority Leader. 

With Simons’ pending exit from FTC, and recent revelations in POLITICO that Biden will nominate FCC commissioner Rohit Chopra to be the next director of the Consumer Financial Protection Bureau (CFPB), the Biden administration will need to fill two vacancies if the Senate confirms Chopra.

“The persons selected to fill those seats will tell us a great deal about the expected direction of the FTC under President Biden,” said John Villafranco, a partner with the law firm Kelley, Drye & Warren LLP.

Several other FTC officials also are departing the agency, including Andrew Smith, director of the Bureau of Consumer Protection (BCP). Over the last year, the bureau has vigorously targeted fraudulent advertising claims related to COVID-19, including claims made by marketers of dietary supplements.

In addition to cracking down on deception and fraud against consumers, the Simons-led FTC challenged anticompetitive mergers and business conduct.

Those activities included a lawsuit filed against Facebook in December, alleging the social networking giant sustained a monopoly through years of anticompetitive conduct. The complaint was filed against Facebook in U.S. District Court in Washington, D.C., following a probe in cooperation with a coalition of attorneys general of 46 states, the District of Columbia and Guam.

“It’s been a great honor to lead this incredible organization filled with so many talented people working on behalf of American consumers,” Simons said in a Jan. 19 press release. “As technology and our economy continue to evolve through the digital age, the FTC’s staff work tirelessly so that consumers continue to benefit from a fair and competitive marketplace. It’s been a privilege to be part of that effort.”

Consumer protection actions

Ivan Wasserman, a Washington, D.C.-based attorney, has practiced before the FTC for the last quarter century. He said his FTC law practice did not slow down significantly during the Trump administration, as is often predicted when a Republican controls the White House.

“The FTC under Chairman Simons has of course been very active in the whack-a-mole challenge of policing the internet of COVID-related claims and has wisely used warning letters to spur quick compliance rather than undertake lengthy and costly investigations,” Wasserman, a partner with Amin Talati Wasserman LLP, said in an email.

Villafranco, who focuses his practice on advertising law matters and consumer protection, also commented on Simons’ work protecting consumers.

“Together, Simons and Smith led the FTC Consumer Protection effort on numerous fronts, some controversial, including the effort to hold individuals liable along with the companies they lead, aggressive pursuit of civil penalties and other equitable monetary relief, and efforts to strengthen and improve conduct relief,” the Washington, D.C.-based lawyer said in an email.

In the experience of Katie Bond, who also practices law in the nation’s capital, Simons approached a hearing “with an exceptionally open mind and cool, evenhanded approach.” She suggested he carefully considered both the positions of FTC staff and a company before the agency.

Simons' evenhanded approach “led to an incredibly strong process,” added Bond, a partner with Lathrop GPM.

FTC in Biden administration

Looking ahead to the Biden administration, Wasserman doesn’t expect a significant change in FTC’s priorities regarding efforts to stop deceptive marketing practices of dietary supplements and other products.

“Biden has made a specific point that he wants to more vigorously enforce deceptive ‘Made In USA’ claims,” Wasserman observed. “Other than that, I fully expect that the career staff as well as the commissioners will continue to use their resources to target those products and claims they feel are doing the most harm to vulnerable populations.”

In the dietary supplement industry, the lawyer explained, FTC is typically focused on “widely advertised products making unsubstantiated claims to prevent or cure diseases, lose weight, quit smoking or drug use, and more—in particular when [advertising claims] target the elderly and children.”

Among the unknowns at FTC: who will fill Smith’s shoes, and how his or her agenda will affect dietary supplements, writ large. During the Obama administration, the director of the BCP— David Vladeck, then later Jessica Rich—aimed to target health-related advertising by small and large companies and increase standards for substantiation, Bond reflected.

The doctrine of substantiation concerns the type of evidence required to support an advertising claim. During the Obama administration, FTC and Bayer Corp. fought in court (Bayer ultimately prevailed) over the types of scientific evidence required to support advertising of a probiotic supplement.

While Smith didn’t share a similar health claims agenda as his predecessors, Bond acknowledged his consumer protection bureau brought many actions against dietary supplements and other products advertising health benefits.

“We can expect that health-related advertising will always be a priority at FTC, no matter the administration,” Bond said. “The question now with the Biden administration really is whether it will look like the Obama administration with a newfound push to make reforms to the substantiation standards.”

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