Federal Trade Commission Squashing Small Businesses

For decades, the Federal Trade Commission could, under its interpretation of Section 13(b) of the Federal Trade Act, go to court and obtain a court order placing a company's assets under the FTC's control. Such a company would have no opportunity to defend itself, much less to challenge the order in court before it was imposed. It would effectively be at the mercy of the FTC to impose settlement conditions. In May 2021, the Supreme Court unanimously held that Section 13(b) of the Federal Trade Commission Act does not give the Commission authority to bypass administrative proceedings and seek equitable monetary relief directly from the federal courts. Despite the Supreme Court decision, the FTC has continued to demand monetary sanctions that are impermissible under Section 13(b). And some courts have granted that relief.