If you’re marketing your business, chances are you care about your commercial reputation. You work hard to deliver great content and comply with advertising rules. But what happens if there’s a concern that your content doesn’t comply with those rules and regulations?
In such cases, you could face investigation by the Federal Trade Commission (FTC)—the process starts with a Civil Investigative Demand (CID). Here’s how FTC CIDs work, why you have received one, and what happens next.
What Is the FTC?
The Federal Trade Commission is the government agency responsible for protecting consumers from unfair, deceptive, or wrongful advertising. The goals are to:
- Promote fair marketplace competition;
- Educate businesses on responsible marketing; and
- Prevent consumer harm from misleading advertising.
Attracting FTC attention does not automatically mean you’re in trouble. But it should be taken seriously—an FTC investigation, if it goes against you, can result in significant penalties.
What Is the Bureau of Consumer Protection?
The Bureau is a branch of the FTC. It’s responsible for investigating allegations of unfair and deceptive marketing practices that could harm consumers. So, if you’re accused of misleading or false advertising, the Bureau will likely be involved in the case.
What Is an FTC Civil Investigative Demand?
An FTC Civil Investigative Demand is a legal notice that compels a business to send certain documents relating to an FTC investigation. In other words, it’s like an administrative subpoena—and failing to comply can lead to significant penalties.
When the FTC Issues Civil Investigative Demands
Typically, the FTC issues a CID if it believes that a business has violated its rules and regulations. For example, the FTC might issue a CID if it believes there’s been a violation of its advertising laws, or its marketing rules.
By issuing such a notice, the FTC can gather the documents it needs to decide if a violation did, in fact, take place, and what penalties may be appropriate.
Why Have I Received an FTC CID?
There are various reasons why you might receive a CID from the FTC. However, the most common reasons for attracting FTC scrutiny include:
- Consumer complaints about an advertising or affiliate marketing campaign
- Failing to disclose material connections to a brand
- Buying fake reviews to promote goods or services
- Failing to support advertising claims with evidence
Essentially, if there’s a concern that your marketing may be misleading, or there’s a risk that it’s “unfair” to competitors, then you could face FTC investigations.
FTC CIDs vs. Subpoenas
An FTC CID is similar to a subpoena, but it’s a distinct document. In fact, there are two major differences between FTC Civil Investigative Demands and FTC subpoenas.
- A CID is issued before court proceedings are initiated. Subpoenas are issued after court proceedings begin.
- FTC CIDs are civil demands. A subpoena can be issued in civil or criminal proceedings.
Have any questions about the differences between FTC CIDs and subpoenas? Our attorneys are happy to help.
How Does the Investigative Process Work?
The exact process depends on the facts of your case. Generally, though, here’s what you might expect.
- The FTC issues a Civil Investigative Demand.
- Within 14 days of receiving the FTC CID, you should have a meeting with the CID known as a “meet and confer.” This is a chance to learn more about the process, ask questions about the investigation and, where possible, seek to have the CID changed or withdrawn.
- The required documents and records are submitted to the FTC. The FTC reviews the records and decides whether to close the investigation or take further action.
- The FTC advises the Bureau of Consumer Protection of its findings and what action it will take.
- The FTC will proceed with enforcement action, such as financial penalties or injunctions.
At Gordon Law, our marketing law team will use our knowledge and experience of FTC investigations to seek a swift and informal resolution to your case. Whether this means petitioning the FTC to close the investigation, or negotiating the penalty, we’ll do everything possible to secure the fairest outcome.
Does a Civil Investigative Demand Mean I’m Being Sued?
No. Receiving a CID from the FTC simply means that you’re part of an investigation. For example, the FTC might be investigating your business for alleged advertising rule violations. Or, the FTC could be investigating another company for alleged violations, and may need information from you as part of their process.
Even if you’re the subject of the FTC’s scrutiny, the Civil Investigative Demand is an obligation to supply information. It does not necessarily mean you’ll be sued.
What Should I Do if I Receive an FTC CID?
First, do not panic. Knowing that you’re the subject of an FTC investigation is, of course, worrying. But you need to act fast—and effectively—to protect yourself.
- Retain an experienced FTC defense lawyer. They will ensure that you meet any deadlines and they’ll help you prepare for the FTC’s investigation.
- Double-check which documents you’re required to send over. Always ask if you’re unsure.
- Don’t destroy any documents that may relate to the FTC’s investigations. If you’ve accidentally destroyed any required records, or deleted records as part of your routine data management processes, your attorney can explain what options may be available.
- Set up the meet and confer as soon as possible. It’s your opportunity to raise any concerns you have and discover the FTC’s case against you—the more information you have, the better you can prepare your defense.
What Happens if I Ignore a CID from the FTC?
Although it’s tempting to hope a CID simply goes away, ignoring the notice is never a good idea. For one thing, the FTC can seek a court order, compelling you to hand over the required documentation. And it’s more challenging to negotiate a fair resolution, or to ensure that your concerns are heard, if you don’t engage with the FTC.
Your FTC defense attorney can explain your options for handling the FTC’s requests and ensure that your concerns are properly addressed.
What if I Think the FTC’s Demands Are Unreasonable?
You can petition the FTC if:
- You think the CID is too broad; or
- You believe the CID should be withdrawn entirely.
Typically, the FTC won’t consider a petition until after the meet and confer stage. However, your attorney can explain how such objections work and manage the petition on your behalf.
Received an FTC Civil Investigative Demand? Contact Gordon Law Today!
FTC investigations are daunting—and complicated. If you receive an FTC Civil Investigative Demand, then you deserve support from experienced business attorneys who can defend your best interests and help you achieve the best possible resolution. And that’s why you should contact Gordon Law. Our team has over 10 years’ experience in defending our clients against FTC marketing and advertising allegations. We will explain your legal options, help you decide how to proceed, and represent you at every stage of the FTC investigative process.
Don’t feel like you need to handle an FTC CID alone. The Gordon Law team is happy to help. Call now or complete our contact form to learn more about our services.
