Resolution Opposing the Expansion of the Federal Trade Commission’s Rulemaking Authority

Resolution Opposing the Expansion of the Federal Trade Commission’s Rulemaking Authority

WHEREAS, it is the mission of ALEC to advance the Jeffersonian principles of free markets, limited government, federalism, and individual liberty; and

WHEREAS, the process of government should be open, transparent and in keeping with the separation of powers as detailed by the authors of the Constitution; and

WHEREAS, the Federal Trade Commission (FTC) is currently seeking to greatly expand its authority, in contradiction with the established separation of powers and federalist principles, by petitioning Congress for expanded rulemaking authority; and

WHEREAS, this expanded authority would embolden a five person independent agency with the ability to declare business activities illegal; and

WHEREAS, the expressed purpose of this new authority is to create new restrictions on currently accepted business practices which the FTC alone deems “unfair” including advertising and other longstanding retailer relationships that deliver free services to consumers; and

WHEREAS, the specific purpose of the Magnuson-Moss Act was to enact safeguards that restrain the FTC’s ability to unilaterally deem certain practices “unfair” and, in turn, to expand its authority in many areas including the banning of broad categories of advertising; and

WHEREAS, these safeguards include important procedures that allow for enhanced stakeholder participation, require a detailed evidentiary record before the FTC can create new rules, and enable courts to scrutinize rulemakings as a valuable check to ensure proper process and evidentiary support.

WHEREAS, the current process through which the FTC promulgates rules, as established by the 35 year-old Magnuson-Moss Act, is a proven and effective vehicle for the regulation of business by the FTC and provides the Commission with the authority to punish businesses which act in a deceptive manner; and

WHEREAS, Congress already provides the FTC with “streamlined rulemaking authority” to implement laws on an expedited basis, as it has done so with such laws as CAN-SPAM and the Children’s Online Privacy Protection Act of 1998; and

WHEREAS, no evidence has been presented to support the claim that further expansion of the FTC’s authority is necessary to protect consumers.

NOW, THEREFORE, BE IT RESOLVED THAT [Insert State] urges Congress to refrain from granting the Federal Trade Commission streamlined rulemaking authority as it is unnecessary, could harm legitimate and successful business practices and would usurp the state and federal legislative roles.

BE IT FURTHER RESOLVED THAT copies of this resolution will be distributed to all Governors and all Members of the U.S. Senate and U.S. House of Representatives.

Approved by ALEC Board of Directors on April 29, 2010.

Keyword Tags: Communications and Technology Task Force, Federal Trade Commission, Regulation