On March 10, Christopher Mufarrige, the newly-appointed Director of the Bureau of Consumer Protection at the Federal Trade Commission (FTC), published a blog explaining the significance of Civil Investigative Demands (CIDs) for businesses and the ramifications for failing to respond. The Director warns that “[i]f your business receives such a demand for information, we expect you to respond in a reasonable and timely manner or face legal consequences.” The blog also provides the following primer about CIDs:

What is a CID?

A CID is an investigative tool granted to the FTC under Section 20 of the FTC Act. It functions similarly to a subpoena, allowing the FTC to compel businesses to provide documents, testimony, tangible items, reports, or answers to specific questions. The primary purpose of a CID is to investigate potentially unfair or deceptive acts or practices.

Who Receives CIDs?

CIDs can be issued to various entities, including potential violators and information holders. Receiving a CID does not necessarily mean a business is the target of an investigation. The CID will clearly outline the subject matter and any laws or rules that may have been violated.

Mandatory Response

Responding to a CID is not optional. It is a legally enforceable demand, and businesses must comply fully and promptly. If additional time or adjustments are needed, businesses should immediately communicate with FTC staff to discuss possible accommodations.

Key Deadlines

Upon receiving a CID, businesses should note two critical deadlines:

  • Response Deadline: Clearly printed on the CID form.
  • Meeting Deadline: A specified timeframe to contact and meet with FTC staff, generally required shortly after receiving the CID. Although it can be waived, the FTC’s Rules of Practice generally require such a meeting to identify any issues, problems, or concerns.

Consequences of Noncompliance

Ignoring or refusing to comply with a CID can lead to the Commission seeking judicial enforcement to ensure compliance.

Conclusion

The blog strongly signals the FTC will not relax its consumer-protection efforts. It also removes ignorance about the CID process as an excuse for companies who receive one. The title of the blog itself makes this clear: “Did your business receive a CID? The FTC means business.” Director Mufarrige then emphasizes that the FTC will provide “legal clarity” and “rules of the road” for legitimate businesses that treat consumers fairly to follow as they innovate. But businesses must take these directives seriously. If a company receives a CID, it must promptly respond by engaging with the staff attorneys and complying with the CID. Troutman Pepper Locke has extensive experience in responding to FTC CIDs and stands ready to assist.