In a subsection of the more than 2,100-page 2021 Appropriations Bill, a brief but powerful segment titled “COVID–19 Consumer Protection Act” granted the Federal Trade Commission the authority to swiftly penalize companies for FTC violations for the duration of the public health emergency created by the pandemic. The subsection states:
“For the duration of a public health emergency declared…as a result of confirmed cases of the 2019 novel coronavirus (COVID–19), including any renewal thereof, it shall be unlawful for any person, partnership, or corporation to engage in a deceptive act or practice in or affecting commerce in violation of section 5(a) of the Federal Trade Commission Act (15 U.S.C. 45(a)) that is associated with—
(1) the treatment, cure, prevention, mitigation, or diagnosis of COVID–19; or
(2) a government benefit related to COVID–19.”
Violations, this subsection continues, will be treated and enforced as a violation of a rule defining an unfair or deceptive act under the Federal Trade Commission Act. The maximum civil penalty, as adjusted for inflation last year, for violating the FTC Act is $43,280 per violation.
With the empowerment provided by this new COVID-19 Consumer Protection Act, the FTC can now seek first-time civil penalties for what they deem to be claims of treatment, cure, prevention, mitigation or diagnosis of COVID-19.
In April of last year, the FTC published a press release announcing it was sending warning letters to multi-level marketing companies who had made false or hyperbolic health and earnings claims related to the coronavirus. Now emboldened to enforce the FTC Act more powerfully, companies can expect the commission to make good on its promises.