Advertisers fight FTC's power expansion in financial reform bill

The advertising industry is fighting against a provision in the financial reform bill that would give the Federal Trade Commission more power than it's had in nearly 40 years.

The American Association of Advertising Agencies, the Direct Marketing Association and the American Advertising Federation, along with two dozen other groups, took out a full-page add in Roll Call this week warning against giving the FTC so much authority that it will become the "nation's nanny."

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"It would be the FTC on steroids," Dick O'Brien, executive vice presdient of government relations for the American Assocation of Advertising Agencies told AdAge.com.

President Barack ObamaBarack ObamaWhite House declines to apologize to Boy Scouts Boy Scouts chief apologizes for Trump’s Jamboree address Dem lawmaker: Boy Scouts leader should condemn Trump's 'inappropriate remarks' MORE was in New York last week to push Wall Street Reform proposals. The House has already passed a version of the Financial Reform Bill and the Senate is drafting its own "Financial Stability Act."


A measure in the House version would restore rule-making and enforcement authority to the agency. The FTC had such powers before 1975, when Congress restricted the agency's reach with the Magnuson-Moss Warranty Act.

The FTC has jurisdiction over the online advertising industry and has been hinting that it intends to impose stricter standards for how advertisers collect, share and use consumer data for commercial purposes. The FTC has held a series of workshops on the issue.

The agency also oversees other sectors of the economy, from insurance companies to retailers.

But the advertising industry says an FTC-expanding measure has no business in a financial reform bill. The groups also sent a letter to Senate Majority Leader Harry ReidHarry ReidConservative Senate candidate calls on GOP to end filibuster Ex-Reid aide: McConnell's 'original sin' was casting ObamaCare as 'partisan, socialist takeover' GOP faces growing demographic nightmare in West MORE (D-Nev.) in protest.

The proposal would grant "such sweeping powers that the Commission could essentially act as an unelected legislature, governing industries and sectors that had nothing to do with the financial crisis....Granting the Federal Trade Commission broad new authority across all but a few sectors of the American economy is not a necessary or relevant response to the causes of the recent recession."

The ad in Roll Call says "Retailers have not asked for tax-payer bailouts."

NetChoice, a group of e-commerce companies, listed the FTC's bid for more power as the worst legislative proposals of the year.

The FTC's request for more authority goes too far, NetChoice says, by removing congressionally imposed safeguards meant to temper the FTC's broad jurisdiction over the internet industry. NetChoice says online services and content providers are still experimenting with new models for advertising and distribution, and too much regulation will stunt the growth of new business models.

Consumer advocates, however, say the FTC needs more teeth to effectively police the industries it oversees. They argue the agency should have broader rule-making authority like other agencies, such as the FCC, to really crack down on fraudulent practices that put consumers at risk.

Check out this AdAge.com story for more details.