A Busy Fall for Direct Response & Government Affairs

by Bill McClellan on Dec 6, 2017 12:11:14 PM Government Relations


It has been a busy fall for ERA’s government affairs efforts! It seems like just yesterday that we were all gathered together as an industry at the D2C show in Las Vegas.

Last week, I was in NYC with the board of directors for a town hall meeting to get industry feedback on our members’ concerns followed by our annual NYC reception. It was a great event and I enjoyed catching up with everyone who was able to make it.

While in New York City, I was asked about a lot of issues that you might be interested in. So thought I would do a high level run down on some of the things that came up as follows:  

The FTC…

This fall, the FTC continued to operate with only two commissioners well into the first year of the Trump administration. However, recently we have had news on candidates who might fill the open positions. The new names making the rounds start with Joseph Simons as the Republican nominee for FTC Chair. He is currently the co-chairman of the antitrust group at Paul Weiss and a former FTC antitrust official in the George W. Bush administration.

Rohit Chopra has been slated for the open Democratic Commission seat. He formerly served as the assistant director of the Consumer Financial Protection Bureau for President Obama. He is noted for having close ties to Senator Elizabeth Warren (D-MA).

Noah Phillips is the second Republican nominee for a commissioner slot. He currently serves as the chief counsel for Senator John Cornyn (R-TX) and had previously worked at Steptoe & Johnson as well as Cravath, Swaine & Moore as a civil litigator.

Industry participants should pay special attention to such a large leadership change at the FTC. While many commission policies are bipartisan, it will be interesting to watch the priorities these new commissioners bring to the table.     

Online Sales Tax...

State legislatures continue passing nuisance legislation designed to force a Supreme Court review of the Bellas Hass and Quill decisions. Earlier this summer, the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law held a hearing on the No Regulation Without Representation Act of 2017 (H.R. 2887). The proposal from Jim Sensenbrenner (R-WI) provides that “to the extent otherwise permissible under Federal law, a State may tax or regulate a person’s activity in interstate commerce only when such person is physically present in the State during the period in which the tax or regulation is imposed”.

However, for now this issue has frozen in place with little prospect of action this Congress. This landscape will soon change. Unfortunately, House Judiciary Chairman Bob Goodlatte (R-VA) announced his retirement last month. He has been the go to member of Congress on remote sales tax and has held an iron hand with his oversight in our favor. Watch for who his replacement will be as chairman of the House Judiciary Committee. This position has a great deal of importance for the eventual outcome.  

Negative Option/Risk Free Trials/Auto Renewals…

The Negative Option/Auto-Renewal space has also seen renewed life throughout 2017 and into this fall. The FTC has used ROSCA to challenge “risky risk-free trials” in their enforcement activity. 

State legislatures have also gotten into the act. Earlier this summer Senator Robert M. Hertzberg introduced California Bill, SB 313 that would affect trial offers, introductory offers, or free gifts used as incentives to enroll in an automatic renewal program by requiring a separate stand-alone opt-in for the trial, introductory, or free component of the offer. 

Similarly, State Attorneys General and even District Attorneys in have begun to engage on the issue. This full court press has renewed discussions about the potential for a “back-end” self-regulatory solution. Stay tuned to this space for more from ERA and the ERSP self-regulation program in 2018.

Net Neutrality…

My blog post last week was entitled “Net Neutrality is Back”. You can read more about it at the link but the shorthand version is that the Federal Communications Commission (FCC) under the leadership of Chairman Ajit Pi has announced plans to draft new rules that will upend the current FCC Net Neutrality protections finalized in 2015. A vote is slated for mid-December. ERA members should expect an adverse ruling at that time. However, the consumer groups have indicated that they will immediately challenge the ruling in court and believe that they are on firm footing to ultimately prevail. Expect an extended court battle after this month’s vote that will conclude with the losing side exploring its legislative and regulatory options further upon conclusion.    

Equifax Data Breach…

At D2C there was growing concern about the Equifax data breach. This fall both chambers of Congress held hearings featuring Richard Smith, the former Equifax CEO about the hack. These hearings include:

House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection:  “Oversight on the Equifax Data Breach: Answers for Consumers”.

Senate Committee on Banking, Housing, and Urban Affairs: “An Examination of the Equifax Cybersecurity Breach”.

Senate Judiciary’s Subcommittee on Privacy, Technology and the Law: “Equifax: Continuing to Monitor Data-Broker Cybersecurity”.

House Financial Services Committee: “Examining the Equifax Data Breach”.

Additionally the following pieces of legislation have been introduced in Congress this fall:

H.R. 3806, The Personal Data Notification and Protection Act
H.R. 3816, To Require Notification During A Breach Containing Personal Information
H.R. 3896, The Secure and Protect Americans' Data Act
H.R. 3975, The Cyber Breach Notification Act of 2017
H.R. 4081, The Consumer Privacy Protection Act of 2017

ERA will continue to work to protect the industry from adverse potential policy outcomes on privacy and data security. However, a lot of warning signs are flashing red here in D.C. Don’t wait until it’s too late. Review your internal practices with your team and be sure to connect with competent legal advisors if anything seems odd or out of place.

 About the Author


Bill McClellan serves as ERA's Vice President of Government Affairs. Prior to joining the association, Bill worked as a lobbyist at the Georgia Automobile Dealers Association, covering the state legislature and Georgia's congressional delegation. Before working for the GADA, Bill managed political campaigns at both the congressional and state constitutional levels.

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