Dealing with an FTC investigation can be intimidating. But having an experienced FTC defense attorney on your side makes all the difference. This guide will walk you through key things to know about FTC defense and how a knowledgeable lawyer can help.

What is the FTC?

The Federal Trade Commission (FTC) is a government agency that enforces consumer protection and antitrust laws. Their goal is to protect consumers from unfair or deceptive business practices and promote competition.

The FTC has the power to investigate companies and individuals they suspect of violating the law. This includes issuing subpoenas, demanding documents, and requiring sworn testimony. If they determine violations occurred, the FTC can file lawsuits in federal court seeking injunctions or monetary damages.

Why Would the FTC Investigate Your Business?

There are many reasons the FTC may start poking around your company. Here are some common triggers for FTC investigations:

• Consumer complaints about fraud, data breaches, or other issues
• Making misleading claims in advertising or marketing materials
• Violating laws related to privacy, data security, or telemarketing
• Unfair or anti-competitive business practices
• Deceptive pricing, refund policies, or subscription plans

Often investigations begin with the FTC issuing a Civil Investigative Demand (CID). This is a request for information similar to a subpoena. It will specify what documents, data, or testimony the FTCrequires you to provide.

Responding to an FTC Investigation

If you receive notice of an FTC investigation, it’s crucial to involve an experienced FTC defense attorney right away. Here’s what a knowledgeable lawyer can do to protect your interests:

• Carefully review the CID and determine what information the FTC is seeking
• Negotiate with the FTC to narrow the scope of the CID if it seems overly broad
• Gather responsive documents and materials from your company
• Prepare company representatives for investigative hearings
• Assert privileges and confidentiality protections where appropriate
• Present defenses and arguments to convince the FTC no laws were violated

Having legal counsel involved early allows you to put your best foot forward and avoid missteps when responding to an investigation.

Settling FTC Charges

If the FTC believes your business violated the law, they may try to reach a settlement. This involves agreeing to an order that prohibits you from engaging in the contested practices in the future. It may also require paying fines or restitution.

An experienced FTC defense lawyer can negotiate with regulators to secure the most favorable settlement terms possible. This includes limiting the scope of injunctive provisions, reducing monetary payments, and carving out important business practices from restrictions.

Fighting Back in Federal Court

If a settlement can’t be reached, the FTC may decide to file a lawsuit against your company in federal court. Your lawyer’s litigation experience will be indispensable if you end up in court.

A skilled FTC defense attorney can:

• File motions contesting the FTC’s legal theories and allegations
• Take discovery to obtain evidence weakening the FTC’s case
• Retain expert witnesses to rebut the FTC’s positions
• Attempt to have the case dismissed before trial if the FTC lacks proof
• Argue to narrow the scope of requested remedies
• Appeal any unfavorable rulings after trial

Having an attorney well-versed in FTC litigation procedures can help you get the best possible outcome if a lawsuit occurs.

Key FTC Defense Strategies

Experienced FTC defense lawyers have many strategies to protect clients during investigations and litigation. Here are some of the most effective techniques top attorneys use:

• Question the FTC’s authority – In some cases, experienced lawyers can argue the FTC is overstepping its jurisdiction or lacks legal basis for its allegations.
• Dispute the FTC’s interpretations – There is often room for debate around how consumer protection and antitrust laws apply to novel business practices.
• Demonstrate good faith – Showing that you acted ethically and tried to comply with the law can convince the FTC violations were unintentional.
• Focus on consumer benefits – Explaining how consumers broadly benefit from your business model can undermine allegations of unfair competition.
• Leverage industry expertise – Retaining experts familiar with your sector’s economics can weaken the FTC’s assumptions.

A creative and strategic defense drawing on these principles can get charges reduced or even dismissed. An experienced FTC defense lawyer will know how to craft the most compelling arguments for your unique situation.

Choosing the Right FTC Defense Attorney

Picking the right lawyer to defend against FTC charges is critical. Look for these key traits in prospective counsel:

DEFENSE TEAM SPOTLIGHT

Todd Spodek

Lead Attorney & Founder

Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.

NY Bar Admitted NJ Bar Admitted Federal Courts

Meet the Full Team

• Extensive experience handling FTC investigations and litigation
• In-depth knowledge of consumer protection and antitrust laws
• Creativity pursuing legal and factual defenses
• Skill negotiating favorable settlements
• Dedication to meticulous preparation
• Tenacity fighting for your interests

It also helps to pick a lawyer with subject matter expertise related to your industry. This allows them to better understand your business practices and mount strong defenses.

Legal Scenario: What Would You Do?

Scenario

You receive a Civil Investigative Demand (CID) from the FTC alleging that your online supplement company made deceptive health claims in its advertising. The CID requires you to produce thousands of internal documents, marketing materials, and substantiation files within 30 days.

Should I comply with the FTC's CID immediately, or do I have options to challenge or narrow the scope of their demands?

Attorney's Answer

You absolutely have the right to negotiate and even petition to limit or quash an FTC Civil Investigative Demand under Section 20 of the FTC Act (15 U.S.C. § 57b-1). An experienced FTC defense attorney can file a petition to modify or set aside the CID if it is unreasonably broad, unduly burdensome, or seeks privileged materials. We can also negotiate directly with FTC staff to narrow the document requests and extend deadlines, which the Commission routinely allows when counsel is involved. Acting quickly is critical because failing to respond or ignoring the CID can result in a federal court enforcement action compelling compliance and potentially leading to contempt sanctions.

This is general information only. Contact us for advice specific to your situation.

Vet any attorney thoroughly and don’t hesitate to ask questions. Get a sense of their track record with past cases and overall philosophy. Take time to find the right fit. Your freedom to continue operating how you see fit could depend on it.

The Bottom Line

Responding to FTC scrutiny is daunting but manageable with experienced legal counsel guiding you. Focus on finding the right defense attorney fit. Be proactive and compliant during the investigation. Keep believing in your business model while making necessary tweaks. With perseverance and a strong defense, you can emerge from even rigorous FTC scrutiny with your business intact.

Helpful Legal Resources

• Price Fixing Laws and Regulations
• Predatory Pricing Laws
• FTC Endorsement Guidelines
• Data Security Compliance Guidance
• FTC Truth in Advertising Standards

Responding to FTC Investigations of Influencers and Endorsers

If you’re an influencer or brand who works with influencers, you may find yourself on the receiving end of an FTC investigation regarding endorsements. Don’t panic! Here’s what you need to know about responding to these inquiries and staying on the right side of the law.

Why the FTC Investigates Endorsements