What This Bill Does
This bill changes the rules for how the Federal Trade Commission can punish companies that harm consumers through unfair or deceptive practices. It allows courts to order companies to repay consumers, return property, cancel contracts and give money back to people who were wronged. The bill also allows the Attorney General to collect damages from companies that break antitrust laws.
Who It Affects
Companies, partnerships and corporations accused of unfair or deceptive business practices. Consumers who lose money or property because of these unfair practices. The Federal Trade Commission and the Attorney General.
Key Provisions
• A court can order a company to pay back money to consumers if the company benefited from unfair or deceptive acts, as long as the court has solid proof that the act was one a reasonable person would know was unfair or deceptive and the consumer actually relied on it. (Sec. 2(a)(1)(A))
• The Federal Trade Commission has 3 years from when a violation happens to ask a court for repayment, refunds, contract cancellation, or contract changes. (Sec. 2(a)(1)(B))
• A court can order a company to pay back any unfair profits the company made from the violation, but the payment cannot be more than the company's actual net profits related to that violation. (Sec. 2(a)(2)(A))
• The Federal Trade Commission has 3 years from when a violation happens to ask a court to order the company to return unfair profits. (Sec. 2(a)(2)(C))
• A court cannot assume a consumer relied on a company's unfair or deceptive practices just because the consumer was exposed to them. The Federal Trade Commission must prove the consumer actually relied on the unfair practice. (Sec. 2(a)(4)(B))
• When the Federal Trade Commission wins a case about unfair competition, it can refer the case to the Attorney General to collect actual damages. (Sec. 2(a)(f))
• The Attorney General can sue in federal court to recover damages and attorney fees on behalf of people injured by violations of antitrust laws without any limit on how much money is at stake. (Sec. 3(a))
What Changes
The Federal Trade Commission gains new power to ask courts for equitable relief (a legal term meaning fairness-based remedies like refunds and repayment), not just temporary orders to stop illegal behavior. Courts can now order companies to repay consumers, cancel or fix contracts, return property and return unfair profits they made. The bill requires stronger proof that a reasonable person would have known about the unfair practice and that the consumer actually relied on it before a court can order repayment. The Attorney General gains power to sue directly for damages from antitrust violations without restrictions on the amount of money involved.
Important Definitions
• Equitable relief: Court orders that require companies to fairly correct wrongs by repaying money, canceling contracts or returning property.
• Disgorgement: A court order requiring a company to give back unfair profits it gained from illegal acts.
• Restitution: Payment a company must make to repay consumer losses caused by its violation.
• Rescission: Canceling a contract as if it never happened.
• Reformation: Changing the terms of a contract by court order.
• Unfair or deceptive acts or practices: Business conduct that a reasonable person would know violates consumer protection laws.
• Antitrust laws: Federal laws that prevent companies from unfairly blocking competition.
Effective Date
These changes apply to any lawsuit started on or after the date the bill becomes law. Not specified in bill text when the bill becomes law.
II
118TH CONGRESS
1ST SESSION
S. 1076
To amend section 13 of the Federal Trade Commission Act to provide for
equitable relief, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 30, 2023
Mr. LEE (for himself, Mr. CRUZ, Mr. HAWLEY, and Mrs. BLACKBURN) intro-
duced the following bill; which was read twice and referred to the Com-
mittee on Commerce, Science, and Transportation
A BILL
To amend section 13 of the Federal Trade Commission Act
to provide for equitable relief, and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘The Consumer Protec-
4
tion and Due Process Act’’.
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SEC. 2. AMENDMENTS TO THE FEDERAL TRADE COMMIS-
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SION ACT.
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(a) PROVISION OF EQUITABLE RELIEF; AUTHORITY
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TO REFER TO THE ATTORNEY GENERAL.—
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•S 1076 IS
(1) IN GENERAL.—Section 13 of the Federal
1
Trade Commission Act (15 U.S.C. 53) is amended
2
by adding at the end the following:
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‘‘(e) EQUITABLE RELIEF.—
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‘‘(1) RESTITUTION; CONTRACT RESCISSION AND
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REFORMATION; REFUNDS; RETURN
OF
PROPERTY
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RESPECTING UNFAIR OR DECEPTIVE ACTS OR PRAC-
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TICES.—
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‘‘(A) IN GENERAL.—Subject to paragraph
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(4), in a suit brought under subsection
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(b)(2)(B), the Commission may seek, and the
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court may order—
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‘‘(i) restitution for consumer loss that
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the court has a sound basis to conclude re-
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sulted from such violation;
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‘‘(ii) rescission or reformation of con-
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tracts; or
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‘‘(iii) the refund of property.
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‘‘(B) LIMITATIONS
PERIOD.—In a suit
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brought under subsection (b)(2)(B), the Com-
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mission may bring a claim for relief under this
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paragraph not later than 3 years after the date
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on which the violation that gives rise to the suit
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in which the Commission seeks the claim oc-
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curs.
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•S 1076 IS
‘‘(2) DISGORGEMENT RESPECTING UNFAIR OR
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DECEPTIVE ACTS OR PRACTICES.—
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‘‘(A) IN GENERAL.—Subject to paragraph
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(4), in a suit brought under subsection
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(b)(2)(B), the Commission may seek, and the
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court may order, disgorgement of any unjust
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enrichment the court has a sound basis to con-
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clude that a person, partnership, or corporation
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obtained as a result of that violation.
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‘‘(B) CALCULATION.—Any amount that a
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court orders a person, partnership, or corpora-
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tion to pay under subparagraph (A) shall be
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offset by any amount a court orders the person,
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partnership, or corporation to pay or to return
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under paragraph (1)(A) and shall not exceed
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the net profits directly related to the violation
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by the person, partnership, or corporation.
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‘‘(C) LIMITATIONS
PERIOD.—In a suit
18
brought under subsection (b)(2)(B), the Com-
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mission may bring a claim for disgorgement
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under this paragraph not later than 3 years
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after the date on which the violation that gives
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rise to the suit in which the Commission seeks
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the claim occurs.
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•S 1076 IS
‘‘(3) CALCULATION
OF
LIMITATIONS
PERI-
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ODS.—For purposes of calculating any limitations
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period under paragraph (1) or (2), any time in
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which a person, partnership, or corporation against
4
which such equitable relief is sought is outside the
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United States shall not be counted for purposes of
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calculating such period.
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‘‘(4) BURDEN OF PROOF; PRESUMPTION.—
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‘‘(A) BURDEN OF PROOF.—The court may
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order equitable relief under paragraph (1) or
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(2) only if the Commission proves that—
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‘‘(i) the act or practice which relates
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to the violation that gives rise to the suit
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in which the Commission seeks such relief
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is an act or practice that a reasonable indi-
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vidual would have known, under the cir-
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cumstances, was unfair or deceptive within
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the meaning of section 5(a)(1); and
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‘‘(ii) a reasonable individual—
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‘‘(I) materially relied on such act
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or practice; and
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‘‘(II) such act or practice proxi-
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mately caused harm to the individual.
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‘‘(B) NO PRESUMPTION OF MATERIAL RE-
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LIANCE.—For
purposes
of
subparagraph
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•S 1076 IS
(A)(ii)(I), the court may not presume that an
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individual materially relied on any unfair or de-
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ceptive acts or practices solely on the basis of
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a finding that such individual was exposed to
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such unfair or deceptive acts or practices.
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‘‘(f) REFERRAL BY THE COMMISSION.—In any action
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brought by the Commission under this section involving
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an unfair method of competition in which the court rules
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in favor of the Commission, the Commission may refer the
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action to the Attorney General to collect actual damages
10
under section 4A(b) of the Clayton Act.’’.
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(2) CONFORMING AMENDMENTS.—Section 13 of
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the Federal Trade Commission Act (15 U.S.C. 53)
13
is amended by striking subsection (b) and inserting
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the following:
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‘‘(b) TEMPORARY RESTRAINING ORDERS; PRELIMI-
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NARY AND PERMANENT INJUNCTIONS; OTHER RELIEF.—
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Whenever the Commission has reason to believe—
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‘‘(1) that any person, partnership, or corpora-
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tion has violated, is violating, or is about to violate
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any provision of law enforced by the Federal Trade
21
Commission; and
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‘‘(2) that either—
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‘‘(A) the enjoining thereof pending the
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issuance of a complaint by the Commission and
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•S 1076 IS
until such complaint is dismissed by the Com-
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mission or set aside by the court on review, or
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until the order of the Commission made thereon
3
has become final, would be in the interest of the
4
public; or
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‘‘(B) the permanent enjoining thereof or
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the ordering of equitable relief under subsection
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(e) would be in the interest of the public,
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the Commission by any of its attorneys designated by it
9
for such purpose may bring suit in a district court of the
10
United States to obtain such injunction or relief. In a case
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brought under paragraph (2)(A), upon a proper showing
12
that, weighing the equities and considering the Commis-
13
sion’s likelihood of ultimate success, a temporary restrain-
14
ing order or preliminary injunction would be in the public
15
interest, and after notice to the defendant, a temporary
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restraining order or a preliminary injunction may be
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granted: Provided, however, That if a complaint is not filed
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within such period (not exceeding 20 days) as may be
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specified by the court after issuance of the temporary re-
20
straining order or preliminary injunction, the order or in-
21
junction shall be dissolved by the court and be of no fur-
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ther force and effect: Provided further, That in a case
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brought under paragraph (2)(B), after proper proof, the
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court may issue a permanent injunction, equitable relief
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•S 1076 IS
under subsection (e), or any other relief as the court deter-
1
mines to be just and proper, including temporary or pre-
2
liminary equitable relief. Any suit under paragraph (2)
3
may be brought where such person, partnership, or cor-
4
poration resides or transacts business, or wherever venue
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is proper under section 1391 of title 28, United States
6
Code. In addition, the court may, if the court determines
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that the interests of justice require that any other person,
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partnership, or corporation should be a party in such suit,
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cause such other person, partnership, or corporation to be
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added as a party without regard to whether venue is other-
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wise proper in the district in which the suit is brought.
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In any such suit, process may be served on any person,
13
partnership, or corporation wherever it may be found.’’.
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(b) AMENDMENTS TO AUTHORITY TO COMMENCE OR
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DEFEND LITIGATION.—
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(1) IN GENERAL.—Section 16(a)(2) of the Fed-
17
eral Trade Commission Act (15 U.S.C. 56(a)(2)) is
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amended—
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(A) in subparagraph (A), by striking ‘‘(re-
20
lating to injunctive relief)’’; and
21
(B) in subparagraph (B), by striking ‘‘(re-
22
lating to consumer redress)’’.
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(2)
TECHNICAL
AMENDMENT.—Section
24
16(a)(2)(D) of the Federal Trade Commission Act
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•S 1076 IS
(15 U.S.C. 56(a)(2)(D)) is amended by striking
1
‘‘subpena’’ and inserting ‘‘subpoena’’.
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(c) APPLICABILITY.—The amendments made by sub-
3
sections (a) and (b) shall apply with respect to any action
4
or proceeding that is commenced on or after the date of
5
enactment of this Act.
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SEC. 3. ACTIONS BY THE ATTORNEY GENERAL.
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(a) IN GENERAL.—Section 4A of the Clayton Act (15
8
U.S.C. 15a) is amended—
9
(1) by striking ‘‘Whenever’’ and inserting ‘‘(a)
10
Whenever’’; and
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(2) by adding at the end the following:
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‘‘(b)(1) The Attorney General may bring a civil action
13
in the name of the United States, as parens patriae on
14
behalf of natural persons residing in the United States
15
who shall be injured in his or her business or property
16
by reason of anything forbidden in the antitrust laws, in
17
any district court of the United States in the district in
18
which the defendant resides or is found or has an agent,
19
without respect to the amount in controversy, and shall
20
recover the damages sustained by him or her, and the cost
21
of the suit, including a reasonable attorney’s fee.
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‘‘(2) No damages or costs may be recovered for the
23
same injury that was the basis for the action under that
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•S 1076 IS
paragraph in addition to any damages or costs awarded
1
in such action.’’.
2
(b) APPLICABILITY.—The amendments made by sub-
3
section (a) shall apply with respect to any action or pro-
4
ceeding that is commenced on or after the date of enact-
5
ment of this Act.
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Æ
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