The Supreme Court Changed the FTC: Consumers Lost and Scams Won

I'm going to change the subject just a little bit because this is just something that's of particular interest to me.

I'm actually working on a research project on this subject.

So insurance in the United States developed first at the state levels, and I think initially fire insurance because everything was made out of wood.

And towns would burn down.

And then, of course, they developed life insurance and auto insurance and things like that.

So the first regulations of insurance came at the state level.

And then it became, obviously, a national kind of issue.

I am aware that in 1980, Congress passed the FTC Improvement Act, which forbids the FTC from investigating the insurance industry except in matters of antitrust.

And I think in our earlier exchanges, I understand there were other acts that have limited the FTC's ability to look at this industry.

And it's an industry where it seems to me there's lots of opportunities for abuse.

So I wonder if you could talk a little bit about that.

Yeah, sure.

So what was actually limited by Congress was the ability for the FTC to conduct investigative reports, conduct investigations, industry-wide investigations into the insurance industry.

So one of the powers that the FTC has is it can issue compulsory process, so subpoenas, administrative subpoenas to FTC.

And some of those happen in the law enforcement context.

So if maybe you're worried about a law enforcement violation, some of them just happen in a different context.

We used to call them the 6B subpoenas.

We call them that because it's Section 6B of the FTC Act.

And that is a provision that is a really important provision for what it is that the FTC can do.

When we're talking about being able to study a full industry, study it and to be able to provide some information to the public, expose some bad practices to the public.

That is one of the key powers that the agency has.

It is neither adjudicative, it is not enforcement, it is not rulemaking.

And so it is one of those core powers that we think of as being insulated from the Trump fee slaughter decision, for instance.

So what happened was that the FTC lost its authority to conduct those types of industry-wide studies on the insurance industry.

It was fairly limited.