In a September 19 speech at the Federal Communications Bar Association in Washington, FTC Acting Chairman Maureen K. Ohlhausen stated that the Commission should focus on addressing instances of “substantial consumer injury” in deciding which cases to pursue. Echoing (intentionally or not) the language of the Supreme Court’s foundational decision in Spokeo, Inc. v. Robins, Ohlhausen outlined the types of concrete injury—as opposed to “hypothetical” injury—potentially sufficient to warrant FTC involvement.
Ohlhausen began her speech by laying out, in broad strokes, the FTC’s enforcement powers and its track record of bringing enforcement actions on a case-by-case basis. She stressed that the FTC is the “primary U.S. enforcer of commercial privacy and data security obligations” and stated the agency takes that charge “very seriously.”
Discussing the types of incidents that warrant FTC action, Ohlhausen focused her discussion on consumer injury, noting it is part of the FTC’s Section 5 unfairness standard. She also touted a focus on consumer injury “plain good policy,” with the government doing the most good when it can address “substantial consumer injury” instead of expending resources to prevent “hypothetical injuries.”
With that focus in mind, Ohlhausen described in general terms five types of inaccuracies she sees as paradigmatic of warranting FTC focus, though she cautioned that the list was neither exhaustive nor intended to provide legal guidance on what the FTC considers substantial injury. She noted the FTC had focused on the following types of harms:
(1) deception injury or subverting consumer choice, relevant in instances where a company has misled consumers through material claims about a product or service’s privacy or security features, inducing consumers to make a choice that they otherwise wouldn’t have made;
(2) financial injury, relevant across various fact patterns of consumers suffering pecuniary loss;
(3) health or safety injury, relevant when, for example, personal information is misused by stalkers or abusive former spouses for nefarious purposes;
(4) unwarranted intrusion injury, relevant in, for example, claims for violation of the Telephone Consumer Protection Act through unsolicited spam phone calls; and
(5) reputational injury, which she acknowledged overlaps with the other categories, and is sometimes the reason why another type of harm is material to the consumer.
Ohlhausen also noted that, in addition to the type of injury, the FTC also considers its magnitude, both individually and in aggregate. She also stated, without further elaboration, that the FTC considers “both realized injuries as well as those that are likely.”
Together, Ohlhausen’s comments provide an informative look at the types of issues sufficient to catch the attention of regulators at the FTC, and a framework by which injuries can be assessed to determine whether they might warrant enforcement action.
Troutman Sanders LLP will continue to monitor FTC policy statements and any related enforcement actions.