Court Questions FTC’s Authority to Change Court-Approved Settlements

Epoch Times ^ | 11/7/2024 | Chase Smith

[T Ruth]

A panel of judges from the U.S. Court of Appeals for the District of Columbia Circuit appeared to voice skepticism this week regarding the Federal Trade Commission’s (FTC) authority to unilaterally modify a 2019 settlement agreement with Meta Platforms Inc., formerly known as Facebook.

The settlement, which required Meta to pay a record $5 billion fine and enhance its privacy protections, is now the focal point of a legal dispute over the FTC’s attempt to impose additional obligations on the tech giant.

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In 2019, amid revelations of data misuse … the FTC filed a lawsuit against Meta to enforce the prior agreement and they reached a settlement. This agreement included the substantial fine and mandated significant changes to how Meta handles user data.

The FTC, after the new order was approved by a court, then sought to reopen the case days later to enforce stricter controls on Meta’s data practices ….

The agency aimed to impose over 800 new privacy obligations on Meta. However, Meta contended that the FTC lacked the statutory authority to modify the settlement without returning to court.

During the proceedings on Nov. 5, Meta’s attorney, James Rouhandeh, argued that the FTC cannot unilaterally alter the injunctive relief imposed by the court in the 2019 settlement.

“The FTC is, in effect, usurping the court’s injunctive powers,” Rouhandeh stated, emphasizing that only the court has the authority to enforce or modify its own orders.

The three-judge panel, consisting of U.S. Circuit Judges Neomi Rao, Justin Walker, and Senior Judge Raymond Randolph, appeared to align with Meta’s position.

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After the panel issues their ruling, the case could make its way to the Supreme Court and place the federal agency authority back in the spotlight over government agencies’ regulatory power.