A significant shift has occurred in our consumer protection regulatory regime. This shift has very little to do with new laws or with changes to existing consumer protections laws, which continue to be strong and far-reaching. Instead, the shift has to do in part with how these laws are now being enforced–and who is doing the enforcing and the setting of policy.
In order to understand the importance of what is occurring, we first need to understand U.S. consumer protection laws and how they operate. The principal federal consumer protection statute is the Federal Trade Commission Act (FTC Act). This expansive law prohibits businesses from engaging in any “unfair” or “deceptive” acts in commerce. Each of the 50 states has its own version of the FTC Act, with similarly broad restrictions on business practices within the state (collectively, these laws are known as the “little Acts”). However, the little Acts differ from the FTC Act in that they are generally tailored to meet the specific policy preferences of each particular state. As a result, they are usually applied to state-specific matters, while the FTC Act is used to regulate broader consumer protection issues on a national scale.
