21st Century FTC Act
- Sponsor
- Rep. Castor, Kathy [D-FL-14]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Sep 24, 2026
Bottom line
The '21st Century FTC Act' grants the FTC enhanced authority to issue regulations and levy civil penalties, aiming to strengthen consumer protection and deter unfair business practices.
What it actually does
This bill significantly expands the Federal Trade Commission's (FTC) power to regulate unfair or deceptive acts or practices. It streamlines the FTC's rulemaking process by repealing the more stringent procedural requirements of the Magnuson-Moss Warranty Act, allowing the agency to use standard notice-and-comment rulemaking. Furthermore, it broadens the FTC's ability to seek civil penalties for violations of the FTC Act itself, rather than limiting penalties to violations of specific rules or prior orders.
Proponents argue
Proponents argue that this bill is essential for modernizing the FTC's enforcement capabilities, allowing it to respond more effectively and efficiently to evolving unfair and deceptive practices in the marketplace. They contend that the current Magnuson-Moss rulemaking procedures are overly burdensome and slow, hindering the agency's ability to protect consumers. Granting broader civil penalty authority will provide a stronger deterrent against corporate misconduct and ensure that bad actors face meaningful consequences.
Opponents contend
Opponents contend that this bill grants excessive and unchecked power to an unelected agency, potentially leading to overreach and burdensome regulations on businesses. They argue that removing the Magnuson-Moss safeguards, which include public hearings and cross-examination, diminishes due process and transparency in rulemaking. Concerns are also raised that expanded civil penalty authority could lead to arbitrary enforcement and stifle innovation, creating an uncertain regulatory environment for businesses.
The bill is short and relatively straightforward, making it accessible for a quick read and initial assessment.
Section 2(1)(A), amending 15 U.S.C. 57a(b)
Streamlined Rulemaking Authority for Unfair or Deceptive Acts or Practices
This provision amends Section 18(b) of the Federal Trade Commission Act by striking paragraphs (2) and (3) and modifying paragraph (1). This change removes the specific, more stringent procedural requirements for FTC rulemaking (often referred to as 'Magnuson-Moss rulemaking') that mandated extensive hearings and cross-examination. Instead, the FTC would be able to use the more common and less burdensome notice-and-comment rulemaking procedures under the Administrative Procedure Act to define unfair or deceptive acts or practices.
Supporters argue
Supporters argue that this streamlining is critical for the FTC to keep pace with rapidly evolving marketplace practices, particularly in digital and emerging technologies. They contend that the Magnuson-Moss procedures were designed for a different era and have proven to be an impediment to timely and effective consumer protection, often taking years to finalize rules.
Critics contend
Critics argue that removing these procedural safeguards diminishes transparency and due process, potentially allowing the FTC to issue broad regulations without sufficient public input or scrutiny. They contend that the Magnuson-Moss requirements were intended to prevent agency overreach and ensure robust public participation in significant rulemaking processes.
Tradeoffs
The provision balances the desire for efficient regulatory action against concerns for due process and extensive public input. It trades a more deliberative, but slower, rulemaking process for a faster, more agile one, potentially at the cost of some procedural protections for regulated entities.
Section 2(1)(D), amending 15 U.S.C. 57a(e)
Adjusted Judicial Review Standard for FTC Rules
This provision modifies the standard for judicial review of FTC rules. It strikes references to the 'transcript required by subsection (c)(5)' (which is also repealed by the bill) and clarifies that judicial review will be based on 'substantial evidence in the rulemaking record (as defined in paragraph (1)(B) of this subsection) taken as a whole.' This change removes specific procedural grounds for challenging FTC rules related to the Magnuson-Moss requirements, making it more challenging to overturn rules based on procedural deficiencies unique to those prior requirements.
Section 3, amending 15 U.S.C. 45(m)(1)(A)
Expanded Civil Penalty Authority for FTC Act Violations
This provision amends Section 5(m)(1)(A) of the Federal Trade Commission Act to allow the FTC to seek civil penalties for any violation of the Act itself, specifically for 'unfair or deceptive acts or practices.' Previously, civil penalties were generally limited to violations of specific rules issued under the Act, or for knowing violations of prior cease and desist orders. This change enables the FTC to seek monetary penalties directly for conduct deemed unfair or deceptive, even if no specific rule has been promulgated covering that exact conduct, provided it falls under the general prohibitions of the FTC Act.
The bill strikes paragraphs (2) and (3) from Section 18(b) of the FTC Act and modifies paragraph (1) to remove the phrase ", and shall also" and all that follows. These seemingly minor textual deletions are the core mechanism by which the Magnuson-Moss rulemaking procedures are dismantled.
Section 2(1)(A)(i) and (ii), amending 15 U.S.C. 57a(b)
Why it matters:This is standard legislative practice for amending existing statutes. The language is precise for legal effect, but its full implications require familiarity with the original text of the Federal Trade Commission Act and the history of Magnuson-Moss rulemaking.
Case for: The case for these deletions is that they remove outdated and inefficient procedural requirements that have hampered the FTC's ability to issue timely and effective consumer protection rules, thereby modernizing the agency's toolkit.
Case against: The case against is that these deletions remove important procedural safeguards, including requirements for oral presentations and cross-examination, which were designed to ensure thorough public input and prevent arbitrary agency action in significant rulemaking.
Estimated impact: The impact is a fundamental shift in the FTC's rulemaking process, making it significantly faster and less burdensome for the agency to issue new regulations defining unfair or deceptive practices.