Advertising Law Tool Kit - Ninth Edition | 2021

Venable / 89 88 / Venable Be Prepared: Surviving an FTC Investigation Keep these points in mind when navigating an FTC investigation: • This isn’t private litigation, and a scorched‑earth strategy likely will backfire. Know that the FTC can play the roles of investigator, prosecutor, and judge. • The FTC staff’s goals are to determine whether a violation of law has occurred, how to remedy any resultant harm to consumers, and how to deter others from engaging in similar practices. Keeping the lines of communication with FTC staff open from the outset provides the opportunity to correct any staff misimpressions before they solidify, and help you better understand staff’s concerns and frame your response. • Consider whether to take steps to proactively remedy the problem the FTC believes may exist, or to put in place a more rigorous compliance program. Although there are countervailing considerations relating to admitting “guilt,” dealing early with a possible problem may yield benefits later on. • If you are facing related or overlapping legal problems on multiple fronts (e.g., class actions, state attorneys general), consider a strategy to coordinate a resolution that minimizes redress and fees, and avoids inconsistent injunctive provisions. • Carefully review the CID’s instructions and defined terms; they contain important information about your procedural rights, relevant deadlines, and the scope of the investigation. The FTC Act and FTC rules also set forth the ground rules that both the FTC and the recipient of a CID must follow. • Before negotiating with FTC staff on modifications to the CID and a schedule of productions, bring all relevant stakeholders at your company together to carefully assess the volume and nature of the documents, information, and data sought by the CID. The earlier you involve your IT professionals, the better. • Provide written advocacy when producing information or documents in response to a CID to properly frame the materials. • Consider taking businesspeople, if relevant, to meetings. Although there are risks, the FTC typically would rather hear from them than from you (or your outside counsel). • Last, there is a proper protocol for going over the head of staff, and it is important to follow it, as the FTC staff is charged with preparing the arguments provided to the FTC commissioners for any resolution of the case. Jeffrey D. Knowles jdknowles@Venable.com +1 202.344.4860 Alexandra Megaris amegaris@Venable.com +1 212.370.6210 If your advertising or marketing practices have triggered a Federal Trade Commission (FTC) investigation and you have received a Civil Investigation Demand (CID) (i.e., administrative subpoena) or access letter, what’s next? While every situation is unique and every strategy heavily fact dependent, to the right are a few points to consider, based on our considerable years of experience handling significant FTC matters and working with and against senior FTC officials. Roger A. Colaizzi rcolaizzi@Venable.com +1 202.344.8051 Leonard L. Gordon lgordon@Venable.com +1 212.370.6252