Press Release

For marketers, the agency in the spotlight will be the Federal Trade Commission because Chair Lina Khan has been particularly assertive in releasing guidelines, issuing fines and filing lawsuits against marketing organizations.

The FTC says the decision will have little effect on key issues like data privacy and artificial intelligence. “We remain undaunted in pursuing our mission to protect American consumers and fair competition,” said agency spokesman Douglas Farrar.

More advertisers, publishers and platforms, however, will start challenging these efforts, said Jason W. Gordon, a partner in law firm Reed Smith’s entertainment and media industry group. “This is going to invite more aggressive advertising,” he said.

Some industry groups welcomed the end of Chevron in the case Loper Bright Enterprises v. Raimondo.

“We’ve been seeing federal agencies clearly go outside of the bounds of their statutory authority,” said Lartease Tiffith, executive vice president of public policy at the Interactive Advertising Bureau, a digital advertising trade group whose members range from brands like Unilever to publishers and platforms such as Disney and TikTok. “If I had a bottle of Champagne, I would be drinking it right now.”

Little may change in the short term because agencies will retain authority granted to them by Congress. Additionally, past settlements and state laws will stand.

A successful lawsuit taking advantage of the Loper decision, however, could begin changing the regulatory landscape, said Anjali S. Bal, associate professor of marketing at Babson College. “The ruling is basically saying the government can no longer be confident that they have the right to regulate,” she said.

Experts say lawyers and industry groups will begin challenging the FTC’s top regulatory priorities, as listed below.

Consumer privacy: The FTC has for years worked to rein in so-called data brokers, companies that aggregate, license and sell consumer data to advertisers and government entities. 

The agency under Khan has issued orders preventing the sale of web browsing histories, geolocation data and other information. Some data-based businesses face multimillion-dollar fines. 

A federal judge in February allowed the FTC’s suit against data broker Kochava to continue, finding that collecting and selling non-anonymized consumer data can amount to an unfair and damaging practice. Additionally, observers anticipate the release of new, comprehensive rules regarding what the FTC calls “commercial surveillance.” 

Lobbying groups may be more confident in challenging attempts by the agency to write new rules. “We would encourage the FTC to consider this ruling in determining whether to take any further action on its misnamed ‘commercial surveillance’ rule-making, given its lack of clear legislative foundation,” Bob Liodice, CEO of the Association of National Advertisers trade group, said in a statement regarding Loper.

Data brokers will likely turn to lobbying groups or consortia to sue the agency, said attorney Sean Buckley, a partner at law firm Dykema and co-leader of its pixel and adtech task force. “Data is a hard drug to give up, frankly,” he said. “I don’t see them giving up without a fight.”

Data sharing: Another contentious area concerns consumers’ ability to choose whether browsers, apps and games can collect data to share with advertisers. 

Apple sparked a sea change in 2021 when it required all apps to ask users of its mobile devices if they want to be tracked.

The FTC has made clear it believes collecting “sensitive” data should be off by default unless a business provides clear, detailed descriptions of the data and the parties that may collect it, said Tiffith. The agency has also said any data regarding an individual, such as web browsing history, is sensitive even if it doesn’t directly identify that person.

IAB disagrees. Twenty states have data privacy laws, none of which insist companies ask consumers before collecting data, said Tiffith. “Unelected bureaucrats” shouldn’t decide whether data tracking must be opt-in or opt-out, he said.

Marketing to children: Congress in 1998 passed the Children’s Online Privacy Protection Act, granting the FTC authority to ensure online businesses obtain parental consent before collecting and sharing data from children under 13. The agency last year proposed new rules to shift more responsibility from parents to the companies.

Some of the proposed rules, such as more limits on collecting data that could be used to identify a minor, exceed the FTC’s authority, according to the IAB.

The Loper decision will restrain the FTC’s ability to make new rules permanent, because judges considering challenges no longer need to defer to the agency on ambiguous areas, said Alison Pepper, executive vice president of government relations and sustainability at the 4A’s, a trade group representing ad agencies.

Click-to-cancel: Many subscription-based companies, from publishers to game-makers, automatically renew subscriptions when they expire and require phone calls to cancel, during which they pitch sales offers.

The FTC refers to this practice as negative option marketing and describes it as deceptive and unfair in some cases. Last year, the agency proposed rules that would require companies to send annual reminders before renewal and let consumers cancel with a simple click, bypassing phone sales pitches.

Complying with these rules would cost businesses more than $1 billion and deprive consumers of bargains on subscriptions they planned to cancel, Tiffith said.

The FTC has cited the 2010 Restore Online Shoppers Confidence Act to argue it can penalize companies for failing to properly disclose material terms of these agreements, but the claim is an obvious target following the Loper ruling, said Rob Freund, a lawyer who specializes in advertising and e-commerce law.

“I think now you could challenge that more easily and say this is not clear on its face and the FTC is trying to read things into this law,” Freund said.

Influencer disclosure: The FTC last year issued new influencer marketing guidelines, then sent warning letters to several influencers and registered dietitians who allegedly failed to divulge they had been paid by consumer goods trade groups to extol products like sugar and aspartame, an artificial sweetener, on social media.

Loper, however, will make the FTC more cautious about pursuing companies like Teami Tea, which in 2020 agreed to pay $1 million to settle claims that celebrities didn’t reveal their Instagram posts promoting the brand were sponsored, said Alexandra Roberts, a professor of law and media at Northeastern University.

The Supreme Court’s decision this month in Corner Post v. Board of Governors of the Federal Reserve System, which found parties can challenge federal regulations up to six years after their alleged injury rather than six years after the rule took effect, may also spur legal challenges to disclosure requirements that went into effect years ago, said Roberts, who specializes in false advertising.

“These rules that we thought were within the agency’s authority to make, not only are they subject to challenge, but they’re potentially subject to repeated challenge,” she said.

Artificial intelligence: The FTC last year described AI as a marketing term and warned marketers against making misleading claims about how these tools work and what they can do.

Prior guidelines focused on issues such as the potential for bias, racial and otherwise, in algorithms that power machine learning and large-language models. The agency will likely move to develop additional authority regarding consumer-facing applications of AI that it describes as unfair or misleading. But the FTC may struggle to enforce its recommendations without explicit authorization from Congress, experts say.

“Laws for regulating AI will need to be more detailed, not ambiguous, which is hard because Congress is barely functional,” Buckley said.