Legislation to curb the Federal Trade Commission's power to attack unfair advertisements and practices, such as high-pressure sales, and to issue industrywide regulations won overwhelming approval from the House Energy and Commerce Committee yesterday.
By a voice vote, the committee adopted a measure that would bar the agency from attacking any unfair advertisements or practices unless the FTC first found that the ad or practice caused substantial and unavoidable injury that was not outweighed by any benefits the practice could bring consumers.
Additionally, in reauthorizing the FTC for another three years, the committee agreed to make permanent Congress' power to overturn FTC rules if a majority in both houses approve a resolution to veto. For the past three years, Congress has had the power to veto FTC rules, but that authority would have expired at the end of September, when the FTC's legislative lease on life expires, unless it is renewed.
The committee also directed the FTC to prove, before embarking on any industrywide rule-making proceeding, that the abuses it wants to correct through its rule are indeed prevalent.
Although the committee's measure would curb the agency's powers, it does not go as far as the reauthorization measure approved last May by the Senate Commerce Committee.
Unlike the Senate bill, the House measure does not bar the FTC completely from regulating advertisements it considers unfair.
Nor does it bar the FTC from taking any antitrust actions against state-regulated professionals, such as doctors and lawyers.
There is substantial support in the House to adopt a similar provision, which is strongly endorsed by the American Medical Association.
Even so, the prime sponsor of that provision in the House, Thomas A. Luken (D-Ohio), declined to offer his proposal as an amendment to the bill yesterday. Luken made it clear that he intended to offer his amendment barring the FTC from regulating the professions when the measure reached the floor.