March 1, 2013

As announced yesterday, President Obama plans to name Edith Ramirez, a Democrat and current Federal Trade Commission ("FTC") Commissioner, to serve as Chairman of the FTC, effective March 4, 2013.  This appointment indicates continuity with the Consumer Protection and Competition  policies the Commission followed under her predecessor, Jon Leibowitz.  While Commissioner, she has voted, almost without exception, with  the majority of her colleagues.  When she takes over as Chairman on Monday, no confirmation hearings will be necessary because she is a sitting Commissioner who previously received Senate approval.

Consumer Protection Policy

Since her appointment as a Commissioner in April 2010, Ramirez seldom has distanced herself from Commission decisions.  Where she has, she has indicated a reluctance to depart from precedent.  For example, she opposed the addition of a deception count to a complaint alleging unfair and deceptive practices by a payday lender, a dissent indicating a more rigorous deception standard than her colleagues applied in the case.  As a Commissioner, she has specifically supported the Commission's focus on privacy and data security and advocated industry self-regulation as a complement to government regulation.

Privacy and Data Security

In a June 2012 speech, Commissioner Ramirez endorsed the FTC's final Privacy Report, which calls on companies to implement best practices to protect consumer information ("Privacy-By-Design"), Congress to enact baseline privacy and data security legislation with civil penalties, and industry to accelerate the pace of self-regulation.  She noted that, while the vision of Privacy-By-Design is not new, it now has "greater urgency as a result of the nearly constant collection and sharing of consumer data that changes in technology have made possible."

The FTC has aggressively enforced "Privacy-By-Design" in the mobile arena.  It is likely that, as Chairman, Commissioner Ramirez and the FTC will continue to address the Report's recommendations in the manner that she outlined in June, including urging Congress to enact "comprehensive privacy legislation to better address the privacy challenges of the digital age," while actively enforcing existing privacy and  data security laws.

Commissioner Ramirez also has expressed support for the final amendments to the Children's Online Privacy Protection Act ("COPPA") Rule, which go into effect July 1, 2013.  In October,  Commissioner Ramirez highlighted positive changes to the Rule, such as the requirement that companies obtain parental consent prior to collecting a child's information and the Rule's applicability to mobile apps, third-party plug-ins, and online tracking.  She also pointed out that the Commission had filed its twentieth COPPA case, underscoring that the defendant in that case operated a website with a general audience, but had knowledge of its use by children.  Given Commissioner Ramirez's position on privacy protection for children, and the FTC's recent enforcement activity – especially in the mobile arena – companies should expect continued Commission enforcement of the COPPA Rule both before and after the amendments take effect in July.

Self-Regulation

Commissioner Ramirez also has supported industry self-regulation.  In November 2012, she encouraged the use of self-regulation and voluntary codes of conduct, stressing that such codes should be transparent, implemented by industry, civil society, and government, and contain strong monitoring and enforcement provisions.  She was involved with the APEC Cross-Border Privacy Rules System and its attempt to create voluntary consumer data safeguards.  She also supports industry "Do Not Track" self-regulation.

Competition Policy

Commissioner Ramirez has supported the vast majority of the Commission's competition agenda, including Chairman Leibowitz' signature program challenging settlements between generic and branded-drug manufacturers that involve payments allegedly delaying the marketing of generic drugs when branded drugs lose patent protection.  The Supreme Court will decide the antitrust rules governing these settlements.  Should the decision favor challengers like the Commission and private plaintiffs, this enforcement program will intensify.

On topics from mergers to concerted action to monopolization, Commissioner Ramirez has staked positions in alignment with the current Commission.  She supported the Commission's decision to close the Google competition probe (although she objected to the form of the disposition).  She has supported the Commissions challenges against mergers and concerted action in the health care industry, an area that should see increasing attention from the Commission during her tenure.  One intriguing suggestion she recently floated – that the Commission use its authority to subpoena entire industries to examine the effects of mergers and acquisitions – could now become enforcement policy.  Her experience as an antitrust and intellectual-property practitioner is evident in her speeches and votes in cases involving the intersection between the disciplines.

Professional Background

Prior to becoming Commissioner in 2010, Commissioner Ramirez was appointed by Mayor Antonio Villaraigosa to the board of commissioners for the Los Angeles Department of Water and Power.  Commissioner Ramirez worked for Quinn Emanuel Urquhart & Sullivan and, before then, at Gibson, Dunn & Crutcher in the firms' Los Angeles offices.  While in private practice, she handled antitrust, unfair competition, intellectual property, and Lanham Act issues.  She clerked for the Honorable Alfred T. Goodwin on the Ninth Circuit from 1992 to 1993.

The Other Current Commissioners

The Commission is headed by five Commissioners who are nominated by the President and confirmed by the Senate, each for a term of seven years.  To preserve balance, at most three Commissioners can be of the same political party.  The other Commissioners are Julie Brill, a Democrat; Maureen K. Ohlhausen, a Republican; and Joshua D. Wright, a Republican.  With Chairman Leibowitz's departure, there is an opening for a third Democratic Commissioner.  While each Commissioner has one vote on issues of substantive policy, the Chairman exercises more influence charting the FTC's course.

Kelley Drye & Warren LLP

The attorneys in Kelley Drye & Warren's Advertising and Marketing practice group have broad experience at the FTC, the offices of state attorneys general, the National Advertising Division (NAD), and the networks; substantive expertise in the areas of advertising, promotion marketing and privacy law, as well as consumer class action defense; and a national reputation for excellence in advertising litigation and NAD proceedings. We are available to assist clients with developing strategies to address issues contained in this Advisory.

Kelley Drye is recognized as a premier antitrust and competition firm. Our national reputation stems from our proven track record of successfully representing clients in complex competition issues arising under federal and state antitrust laws. Our professionals include officials from the ABA Antitrust Section, and former officials of the United States Department of Justice Antitrust Division and the FTC. Our firm is also supported by Georgetown Economic Services, an economic consulting firm.

For more information about this Client Advisory, please contact:

Christie Grymes Thompson
(202) 342-8633
cgthompson@kelleydrye.com

Alysa Zeltzer Hutnik
(202) 342-8603
ahutnik@kelleydrye.com

William C. MacLeod
(202) 342-8811
wmacleod@kelleydrye.com

Gonzalo E. Mon
(202) 342-8576
gmon@kelleydrye.com

Sarah Roller
(202) 342-8582
sroller@kelleydrye.com

Lewis Rose
(202) 342-8821
lrose@kelleydrye.com

Dana B. Rosenfeld
(202) 342-8588
drosenfeld@kelleydrye.com

John E. Villafranco
(202) 342-8423
jvillafranco@kelleydrye.com