As FTC turnover begins industry expects greater focus on consumer protection

By Hank Schultz contact

- Last updated on GMT

©Getty Images - Hulyi Lee
©Getty Images - Hulyi Lee

Related tags: Dietary supplement caucus, Dietary supplement industry, regulations, Ftc

Federal Trade Commission Chairman Joseph Simons announced his resignation yesterday, which begins the process of filling slots at the commission with Biden Administration appointees. A reformed FTC is likely to take a stronger line on consumer protection, industry observers say.

Simons’ resignation will take effect on Jan. 29, at which time eight senior staff members will leave as well.  Also leaving the panel will be commissioner Rohit Chopra, whom the Biden Administration reportedly plans to nominate as the heat of the Consumer Financial Protection Bureau, a post he also held during the administration of President Barack Obama.

Perhaps the most significant development at FTC during Simons’ tenure was the antitrust suit filed against Facebook in which 46 state attorneys general also signed on.  In addition, in 2020 FTC ramped up its cooperation with the Food and Drug Administration in the policing of COVID-19 treatment claims by dietary supplement and medical device marketers.

The two agencies hold joint jurisdiction over the dietary supplement industry.  FTC polices the truthfulness of advertising claims while FDA oversees GMP compliance and disease claims.

Consumer protection focus

Megan Olsen, vice president and associate general counsel for the Council for Responsible Nutrition said it’s likely that the new FTC might wield a stronger arm with the supplement industry.

"CRN is following the changes at the FTC very closely and hopes the Biden administration is quick to fill the two open spots on the Commission and nominate a new Chairman to allow the agency to seamlessly continue its important consumer protection missions. Having a full panel of five Commissioners is important to support robust debate and ensure checks and balances on consumer protection actions," ​Olsen said.

 It is possible that the Biden administration will look inwardly at the other current Democrat Commissioner, Rebecca Slaughter, as a potential leader for the agency. Given the Trump administration’s deregulatory approach, we expect to see the FTC under the Biden administration take a stronger position on consumer protection matters, regardless of who is nominated as the new Chairman or Chairwoman,” ​she added.

 “CRN welcomes this heightened review of the industry and looks forward to working with the new FTC Chairman under the Biden Administration to help create a stronger and safer supplement marketplace,”​ Olsen concluded.

Loren Israelsen, president of the United Natural Products Alliance, echoed Olsen’s views on the  role of FTC in protecting consumers.

“I think it’s fair to say that whoever is nominated, they will come in reflecting the Biden Administration’s general views.  We think the commission will exercise particular vigor in consumer protection and in policing anti competitive behavior,” ​he said.

Israelsen said the amount of staff turnover at a level or two down from the political appointee spots might be a better barometer of where FTC might be going. In any case, changes in direction are likely to be mild.  The Biden campaign seemed to trade on the idea of restoring calm and predictability to the functions of the federal government.  And even during the recent turbulent and divisive times, FTC has been a model of cooperation, said Natural Products Association president and CEO Daniel Fabricant, PhD.

“The current group of commissioners has worked very well together as regulators and shown ample ability to cross party lines to accomplish their goals,” ​he said.

Made in USA claims

Attorney Ivan Wasserman of Amin Talati Wasserman said his firm anticipates one clear message will come through via the new FTC regardless of who is nominated to fill the vacant positions.

“Of course Simons is a Republican, and his resignation will allow Biden to appoint a new commissioner, as well as designate a new Democrat Chair.  Currently Republicans Commissioners are in the majority 3-2, and this will flip it to the Democrats,   Does that mean there will be dramatic shift in FTC’s approach toward the regulation of dietary supplement advertising?    We will have to see but the changes if any are likely to be more subtle than dramatic.  One thing Biden has announced is his intention to more vigorously pursue deceptive ‘Made In USA’ claims, which have already been an increased target of the FTC,”​ he said.

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