Corporate & Securities Law

Are State Consumer Protection Acts Really Little FTC Acts?

I’ve posted to SSRN my latest on state consumer protection litigation, Are State Consumer Protection Acts Really Little FTC Acts?, co-authored with Henry Butler (Searle Center, Northwestern University School of Law).  It is forthcoming in the Florida Law Review.  The project aims to empirically examine the similarities and differences between state and federal consumer protection enforcement.

State Consumer Protection Acts (CPAs) were designed to supplement the Federal Trade Commission?s mission of protecting consumers and are often referred to as ?little-FTC Acts.? There is growing concern that enforcement under these acts is not only qualitatively different than FTC enforcement, but may be counterproductive for consumers. This article examines a sample of CPA claims and compares them to the FTC standard. It identifies qualitative differences between CPA and FTC claims by commissioning a ?Shadow Federal Trade Commission? of experts in consumer protection. The study finds that many CPA claims include conduct that would not be illegal under the FTC standards and that most of the cases with illegal conduct would not warrant FTC enforcement. Even among CPA cases where the plaintiff prevailed, nearly half do not include illegal conduct under the FTC standard and most of the cases with illegal conduct would not invoke FTC enforcement. The results clearly suggest private litigation under little-FTC Acts tends to pursue a different consumer protection mission than the Bureau of Consumer Protection at the Federal Trade Commission.

Download here.

Full post as published by Truth on the Market on May 18, 2010 (boomark / email).