FTC Establishes Streamlined Procedures to Help Maintain the Confidentiality of its Ongoing Investigations; FTC Approves Final Order Settling Charges that PoolCorp Acted Anticompetitively to Stop Manufacturers From Selling Products to Competitors

FTC Establishes Streamlined Procedures to Help Maintain the Confidentiality of its Ongoing Investigations

The Federal Trade Commission has approved Rule 2.17, a new component in the agency's Rules of Practice. The new Rule streamlines internal procedures for staff to seek court orders that prevent certain FTC investigation targets from learning about subpoenas and civil investigative demands (CIDs) that seek information about their activities. The new Rule will improve efficiency and help safeguard the confidential nature of ongoing agency investigations.

Under the new rule, either an individual commissioner or the agency's General Counsel may authorize the FTC staff to file court actions, when necessary, seeking to delay notifying targets of investigations that subpoenas and CIDs have been used, and prohibiting recipients of subpoenas and CIDs from disclosing to targets that they have been used. This will help the agency prevent likely fraudsters from discovering that the FTC has requested information about them from third parties, when such disclosure would tip them off or otherwise jeopardize the internal investigation.

As detailed in the Federal Register notice announcing the Rule, the new procedure specifically relates to disclosures under the Right to Financial Privacy Act (RFPA), the Electronic Communications Privacy Act (ECPA), and the U.S. Safe Web Act (Safe Web Act). Under the RFPA and ECPA, the FTC is at times required to notify consumers when seeking their records from financial institutions (e.g., banks) or service providers (e.g., ISPs). These laws and the Safe Web Act authorize the filing of court actions seeking to delay notification and prohibit disclosure.

The Commission vote approving the Federal Register notice announcing the addition of Rule 2.17 to the FTC's Rule of Practice was 5-0. The Rule is not subject to public comment, and became effective when it was published in the Federal Register on September 2, 2011. (FTC File No. P0272104. The staff contact is Ashley Gum, Office of the General Counsel, 202-326-3006.)

FTC Approves Final Order Settling Charges that PoolCorp Acted Anticompetitively to Stop Manufacturers From Selling Products to Competitors

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that Pool Corporation, the largest distributor of swimming pool products in the United States, used threats and coercion to stop manufacturers from selling pool products to PoolCorp's competitors. According to the FTC, Pool Corp's strategy significantly raised the costs incurred by its rivals, thereby lowering sales, increasing prices, and reducing the number of choices available to consumers.

The final FTC order resolving the charges requires Pool Corp to stop engaging in the anticompetitive tactics that it allegedly has been using to keep out new competitors in local markets around the nation.

The Commission vote approving the final order and a letter to the member of the public who commented on it was 3-1, with Commissioner J. Thomas Rosch voting no. (FTC File No. 101-0115; the staff contact is Linda Holleran, Bureau of Competition, 202-326-2267; see press release dated November 21, 2011.)

The FTC's Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust@ftc.gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., Room 7117, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook and follow us on Twitter.