In April we reviewed several new initiatives within the Federal Trade Commission (FTC) focused on eliminating “wasteful, legacy regulations and processes that have outlived their usefulness,” in the words of FTC Acting Chair Maureen K. Ohlhausen. As part of these initiatives, the FTC recently announced that its Bureau of Consumer Protection will be implementing “process reforms” for civil investigatory demands (CIDs), and they also could lighten the burden of responding in antitrust investigations.
According to the FTC’s press release, process reforms to be implemented by the Bureau of Consumer Protection include:
- Providing plain-language descriptions of the CID process and developing business education materials to help small businesses understand how to comply.
- Adding more detailed descriptions of the scope and purpose of investigations to give companies a better understanding of the information the agency seeks.
- Where appropriate, limiting the relevant time periods to minimize undue burden on companies.
- Where appropriate, significantly reducing the length and complexity of CID instructions for providing electronically stored data.
- Where appropriate, increasing response times for CIDs (for example, often 21 days to 30 days for targets, and 14 days to 21 days for third parties) to improve the quality and timeliness of recipient compliance.
In addition to these CID process reforms, the FTC also announced that “the Bureau will adhere to its current practice of communicating with investigation targets concerning the status of investigations at least every six months after they comply with the CID.” This will, the FTC stated, “ensure companies are aware of the status of investigations.”
These announced reforms within the Bureau of Consumer Protection could meaningfully reduce the burden of responding to CIDs. These requests often demand that parties produce information for a broad period of time, including information that predates any conduct at issue by several years. The FTC’s plan to reduce the temporal scope of such CIDs could help decrease the burden of responding to them. Likewise, the FTC’s plan to simplify its instructions for providing electronically stored data, given the proliferation of electronic messaging, could further decrease the burden of responding. Most important, perhaps, the FTC’s commitment to provide more detailed descriptions of the scope and purpose of investigations should better enable the parties to negotiate and maximize these and other limitations to the scope of CIDs.
It is notable that the FTC’s recent press release attributes these reforms to the Bureau of Consumer Protection only. Back in April, the FTC stated that both the Bureau of Consumer Protection and the Bureau of Competition “are working to streamline demands for information in investigations to eliminate unnecessary costs to companies and individuals who receive them.” It is not clear from the FTC’s release whether the Bureau of Competition is also implementing the announced reforms or is developing its own reforms that will be separately released.
In any event, parties responding to antitrust-related CIDs from the Bureau of Competition may be able to rely on the announced reforms for the Bureau of Consumer Protection to lessen their burden. For example, the FTC’s Operating Manual generally instructs the FTC staff who manage CIDs to minimize the burden and inconvenience to CID recipients when practical – and if the Bureau of Consumer Protection implements reform to limit the temporal scope of CIDs, it should be practical for the Bureau of Competition to accept the same sort of limitation to minimize burden and inconvenience. Similarly, the Operating Manual suggests that all CID recipients should be provided investigation descriptions similar to those provided by the Bureau of Consumer Protection – and if that Bureau implements reform that adds more detailed descriptions of the scope and purpose of investigations, the Bureau of Competition should provide the same additional descriptions.
Whether and when the Bureau of Competition implements its own CID process reforms remains to be seen. In the meantime, however, the Bureau of Consumer Protection’s reforms could lighten the burden of responding to CIDs, and there is good reason for these reforms to be applicable to investigations undertaken by the Bureau of Competition.
*The Eagles, Take It Easy