The Federal Trade Commission has just announced the new maximum civil penalty amounts for violations of various laws that the FTC enforces, including Section 5 of the FTC Act.  The amount increases each year based on inflation, as required by law.  This year, the maximum civil penalty amount has increased from $50,120 per violation to a whopping $51,744 per violation.  

Why is this significant?  

While the FTC can't normally get civil penalties from advertisers just because they've run advertising that violates the FTC's prohibition on "unfair or deceptive acts or practices," the FTC has the ability to seek civil penalties if an advertiser violates an FTC rule -- such as the Mail Order Rule -- or an FTC consent order.  

That's not all advertisers should be concerned about.  

After the U.S. Supreme Court limited the FTC's authority to obtain equitable monetary relief -- such as restitution or disgorgement -- back in 2021, the FTC has been aggressively looking for ways add teeth to its enforcement efforts.  One of its strategies has been to issue numerous Notices of Penalty Offenses, which is another way for the FTC to potentially obtain civil penalties from advertisers who engage in specific advertising practices that have already been determined to violate the law.  

The FTC has also been stepping up its rulemaking efforts -- to add other rules to its arsenal that it can use to obtain civil penalties.  For example, in 2021, the FTC issued a new Made in USA Labeling Rule.  And, it's thinking about whether to codify some of its other standards -- such as its guidance on endorsements and environmental marketing -- as well.  

But there's more! 

When you're calculating civil penalties at up to $50,000 per violation, damages get real big, real fast.  That's what the FTC wants.  And that's why you've been seeing lately some record-breaking nine-figure settlements.  The current FTC Commissioners have made it crystal clear that they don't want an FTC enforcement action just to be a cost of doing business for companies.  If companies violate the law, they wants advertisers to pay a big price for that in the hopes that it will deter others from crossing the line.