Category: Regulation

Crackdown or Anomaly?

The Trump Administration leaves no doubt where it stands on street crime and drug trafficking: it supports the harshest punishments for perpetrators. When it comes to corporate crime, the stance has generally been quite different. Trump has used his pardon power to benefit a slew of convicted businesspeople, and the Justice Department is finding new ways to offer leniency to corporate defendants.

The past two months, however, have seen a burst of case resolutions in which corporations are paying fines and settlements of $100 million or more, which could be called mega-penalties. These have included cases in areas such as environmental protection for which the Trump Administration has not usually engaged in aggressive enforcement.

For example, in a case brought by the Environmental Protection Agency and the Justice Department, a federal court in Michigan ordered utility DTE Energy to pay a $100 million penalty for Clean Air Act violations at its coke battery in River Rouge.

PacifiCorp, owned by Berkshire Hathaway, agreed to pay $575 million to resolve U.S. government claims relating to wildfires in Oregon and Washington. The government argued that the company’s electrical lines negligently started all six fires.

Walmart agreed to pay $100 million to settle a case brought by the Federal Trade Commission and a group of states alleging that the retailer caused delivery drivers to lose tens of millions of dollars’ worth of earnings, by deceiving them about the base pay, incentive pay and tips they could earn.

Aetna, owned by CVS Health, agreed to pay $117 million to resolve DOJ allegations that it violated the False Claims Act by submitting or failing to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees in order to increase its payments from Medicare.

Adobe Systems agreed to pay $150 million, including a $75 million penalty and $75 million in free services to customers,  in a case brought by the Justice Department alleging that the company’s subscription practices violated the Restore Online Shoppers’ Confidence Act by failing to clearly disclose important subscription information and provide subscribers with simple ways to cancel.

The Department of Commerce’s Bureau of Industry and Security (BIS) announced that Applied Materials Inc. would pay a $252 million penalty for illegal exports of U.S. semiconductor manufacturing equipment to China.

If the Trump Administration maintains this pace, it will end up with 36 mega-penalties for the year, nearly twice the number announced during the first year of Trump 2.0, according to the data collected for Violation Tracker.

That figure would give the administration a mega-penalty annual tally comparable to that of the past two Democratic presidencies. Biden’s annual total averaged 36.5 and Obama’s average was 43. For Trump 1.0 the figure was 32.

It remains to be seen whether the spate of mega-penalties of the past two months is an indication that enforcement is ramping up or is just an anomaly. In any event, it is encouraging to see that at least some federal regulators and Justice Department prosecutors are taking their job seriously.

The New Senator from the Fortune 500

Parts of MAGA world are up in arms over the decision by Oklahoma Gov. Kevin Stitt to name Alan Armstrong to fill the Senate seat vacated by Markwayne Mullin, Trump’s new Secretary of Homeland Security. The fact that Armstrong made a political donation to Adam Kinzinger, who voted to impeach Trump while in Congress, is viewed as evidence he is insufficiently loyal to the president.

What these MAGA zealots don’t seem to care about is the fact that Armstrong spent more than a decade running a Fortune 500 energy company with a checkered regulatory record. Williams Companies, whose core business is natural gas processing and transportation, has annual revenues of about $12 billion and nearly $3 billion in profits. Armstrong received $18 million in compensation from the company last year.

As shown in Violation Tracker, Williams has paid out over $160 million in fines and settlements stemming from 120 regulatory infractions and class action lawsuits since 2000. This period closely coincides with Armstrong’s career as a top executive of the company.

Antitrust cases account for the largest portion of the penalty total, $61 million. In 2023, for example, Williams and several affiliates agreed to pay $12 million to Wisconsin natural gas buyers to settle a class action suit alleging the company was part of a price-fixing conspiracy in the early 2000s. In 2019 Williams agreed to pay $4.5 million to settle its role in litigation involving a conspiracy to raise the price of natural gas in Missouri and Kansas.

Environmental violations account for the most cases, 88 of the 120, with total penalties of $25 million. The largest of these in dollar terms is a 2023 case involving Clean Air Act violations caused by excessive emissions of volatile organic compounds, methane, and other pollutants at 15 natural gas processing plants. Williams and related entities agreed to spend an estimated $8.5 million to reduce emissions, and Williams paid a civil penalty of $3.75 million.

Williams has also been fined two dozen times for safety-related infractions, including 13 cases brought by OSHA. One of these involved the death of a worker at a facility in Wyoming.

Back in 2005, Williams paid $55 million to settle a lawsuit alleging it mismanaged an employee pension plan.

Armstrong is unlikely to accomplish much during his nine months in office, but he has made it clear his priorities will be to serve the interests of the industry to which he devoted his career. As the Washington Post put it: “Armstrong said his goal during his short stint in the Senate will be to drive ‘better policies that allow us to take advantage of our natural resources around the country,’ particularly through the passage of permitting reform legislation to speed up energy projects.”

Whether Armstrong turns out to be a total MAGA loyalist remains to be seen, but there is little doubt he will use his office to advance the pro-corporate agenda at the core of Trump’s policies.

Environmental Gaslighting

Under Trump 2.0, the Environmental Protection Agency has gone after the nation’s pollution rules the way a hyena devours a gazelle. EPA Administrator Lee Zeldin proudly depicted the abandonment of the finding that climate change endangers human health as “the single largest deregulatory action in the history of the United States.”

The agency has also moved to weaken limits on mercury releases from coal-burning power plants, rolled back vehicle emission standards, and eased restrictions on ethylene oxide, a cancer-causing gas used to sterilize medical devices. And much more.

Amid this environmental demolition derby, it was a shock to see a recent press release from the EPA touting that in fiscal year 2025 the agency produced its “strongest enforcement and compliance results in years.” Among what it presents as “highlights from President Trump’s first year back in office” is the claim that the EPA concluded over 2,300 civil enforcement cases, which is said to be “over 400 more than the final year of the Biden Administration and more than the last nine fiscal years.”

The first thing to point out is that nearly one-third of fiscal year 2025, which began in October 2024, occurred while Biden was still in office. Second, it is unclear whether the reference to concluded cases included those in which no penalties were imposed.

According to data collected for Violation Tracker, the EPA announced 727 civil penalty cases during FY 2025, which is far less than the 2,300 figure, and more than one-quarter of those occurred while Biden was still in office. The penalty total for the fiscal year was about $1.1 billion, a fraction of the $6 billion the EPA claims it collected in “commitments to return facilities to compliance.”

During the first 12 months of Trump 2.0, the EPA announced 586 civil penalty cases, well below the total of 889 cases during the final 12 months of Biden. The Trump cases entailed $722 million in penalties, which is vastly below the $3.2 billion total for the Biden cases during that period.

It is no surprise that an agency overseen by Donald Trump would grossly exaggerate its accomplishments. The question is why it is choosing to inflate those accomplishments that run contrary to its larger mission of weakening the country’s environmental safety net while promoting fossil fuels and sabotaging wind and solar energy.

In issuing that press release, the EPA may in effect be acknowledging that there is still a large portion of the public that cares about clean air and water and wants to control toxic substances. The agency seems to be betting that it can persuade those people it is still doing its traditional job even as it hacks away at the underpinnings of that mission.

For the time being, environmental enforcement is not defunct. But neither is it thriving in the way the EPA wants us to believe. As more and more regulations are weakened or eliminated, the amount of enforcement will continue to decline, as will the health of the country.

A Neutered Financial Watchdog

Since its creation nearly a century ago, the Securities and Exchange Commission has been one of the country’s premier regulatory agencies, protecting investors from misconduct by large corporations and other players in financial markets.

In the early 2000s the SEC investigated accounting fraud by the likes of Enron and Worldcom. In the aftermath of the 2008 financial crisis, it brought major enforcement actions against Wall Street banks for packaging and selling toxic securities. It has brought thousands of other cases against perpetrators of market manipulation, insider trading, and foreign bribery.

You wouldn’t know this by looking at the recent track record of the agency. Under Trump 2.0 this once fierce regulator is a shadow of its former self. The watchdog has lost its bite.

The enfeeblement of the SEC is highlighted in a new report from Cornerstone Research focusing on the agency’s accounting and auditing enforcement actions. It finds that the number of such cases initiated by the SEC in 2025 dropped 68 percent from the year before and reached the lowest number since 2017.

At the same time, the total monetary settlements collected by the agency in accounting and auditing cases dropped to just $31 million, a plunge from the $907 million figure in 2024. Some 98 percent of the 2025 amount was collected during the final few weeks of the Biden Administration, meaning that under Trump 2.0 the penalties have been next to nothing.

The picture is slightly less dismal in the data collected for Violation Tracker covering SEC cases of all kinds against companies. It shows that total penalties during the first 12 months of Trump 2.0 were $298 million, down from $1.6 billion during Biden’s final year. The average penalty sank from $25 million to $5 million.

One reason for the drop is a shift in the typical defendant. Biden’s SEC brought more cases against big investment banks and other larger corporations, while under Trump the resolved matters are more likely to involve small-time players.

Even more worrying is the SEC decision to largely abandon enforcement actions against certain categories of companies, especially those involved in cryptocurrency. After Trump did an about-face on crypto, the SEC withdrew dozens of lawsuits involving that sector. That included major investigations of companies such as Coinbase and Binance. All this, of course, occurred as the Trump family itself invested heavily in crypto and got a boost from the founder of Binance.

The SEC also seems to be abandoning its role with regard to the Foreign Corrupt Practices Act. Under Trump 2.0 the agency has not resolved a single foreign bribery case. During Biden’s final year, five such cases were completed, including one in which the weapons producer RTX Corporation (formerly known as Raytheon Technologies) paid $124 million to settle a civil case involving improper payments made to assist in obtaining contracts with the Qatari military.

Both at home and abroad, corruption is being given a freer rein by the SEC and the rest of the Trump Administration.  

Turning Regulators into the Anti-DEI Police

During the first year of Trump 2.0, most federal regulatory agencies have experienced savage budget cuts, deep staffing reductions, and abandonment of their core mission. The Consumer Financial Protection Bureau, teetering on the edge of extinction, was subjected to the indignity of having its investigators ordered to abide by a “humility pledge” requiring them to take a less aggressive stance toward corporate miscreants.

One of the few exceptions to this disempowerment has been seen at the portion of the Justice Department charged with enforcing the False Claims Act, the federal law most commonly used in prosecuting fraud by government contractors. While the volume of enforcement activity at most federal agencies has plummeted,  there has been a steady stream of announcements of resolved FCA cases. As shown in Violation Tracker, the DOJ has imposed $1.8 billion in penalties since Inauguration Day in about 200 actions, many involving fraud by healthcare providers.

Now, however, it appears that DOJ is moving in a different direction. There have been recent press reports saying that Justice is beginning to apply the FCA in an unusual and troubling manner.

Investigations are said to be underway in which major contractors which adopted diversity initiatives in their hiring and promotion are considered to have cheated the federal government. This is based on Trump’s dubious claim that DEI is illegal and his obsession with stamping out all remnants of it in both the public and the private sectors.

The Wall Street Journal reported that Google and Verizon are among the companies that have received DOJ demands for documents and information about their workplace programs. Other targeted companies were said to be industries ranging from automotive and pharmaceuticals to defense and utilities.

The Journal pointed out that false-claims investigations are usually begun when a whistleblower alerts the DOJ to contractor fraud. By contrast, these new anti-DEI probes are being initiated by political appointees—in other words, MAGA apparatchiks.

DOJ is not the only federal agency warping its mission to satisfy anti-DEI objectives. The Washington Post is reporting that the Equal Employment Opportunity Commission, which has a proud history of combatting employer discrimination against women and people of color, is now soliciting complaints from white men who believe they are the victims of unfair treatment related to diversity initiatives.

This comes as the agency has drastically cut back the number of conventional lawsuits involving allegations of discrimination based on race and national origin.

Earlier, the Federal Communications Commission used its power over media mergers to pressure companies to abandon their DEI policies. Companies such as T-Mobile quickly complied.

What is next? Will the Department of Agriculture prosecute farmers for employing crop diversification on their land?

It is bad enough when the Trump Administration adheres to the usual Republican playbook of deregulation and feeble enforcement. It is worse when agencies act aggressively but do so in a way that betrays their mission. The conversion of regulatory agencies into the anti-DEI police undermines their legitimate enforcement role while stoking feelings of white victimhood that are so corrosive to our society.

The 2025 Corporate Rap Sheet

The regulatory enforcement system is one of the many things the second Trump Administration has thrown into chaos. The DOGE assault decimated staffing at many agencies. The Consumer Financial Protection Bureau has been all but dismantled. Regulators such as the Environmental Protection Agency are abandoning key parts of their mission.  Independent agencies are losing their independence as Trump asserts a right to fire commissioners for no good reason. The Securities and Exchange Commission is dismissing investigations initiated under Biden in a manner that suggests cronyism. Convicted corporate criminals favored by Trump are receiving unjustified pardons.

At the same time, agencies such as the Federal Trade Commission and the Federal Communications Commission, now headed by MAGA zealots, are using their powers to pressure or punish companies perceived to be enemies of the administration. The Justice Department, at the behest of Trump, is extracting substantial monetary settlements from universities facing dubious allegations that they tolerated anti-Semitism.

The news is not all bad. Portions of the federal regulatory and prosecutorial system continue to operate in a fairly normal manner. For example, False Claims Act cases involving federal contractor abuses are getting resolved on a regular basis.

Even more encouraging is the fact that state and local enforcement remain strong in much of the country, while private litigation in the form of class action lawsuits remains robust. Below are some of the key cases of the year collected for our Violation Tracker database, as well as some major foreign cases collected for Violation Tracker Global.

Amazon’s Cancellation Policies. The FTC has not been solely occupied with ideological warfare. In September the agency ordered Amazon to pay a $1 billion penalty and provide $1.5 billion in refunds to customers who had difficulty cancelling their Prime subscriptions.

Discover Bank’s Credit Card Practices. The Federal Deposit Insurance Corporation, a bank regulator not usually associated with major enforcement actions, ordered Discover Bank, now owned by Capital One, to pay a $150 million penalty and $1.2 billion in restitution to millions of merchants. Discover collected improperly high interchange fees by misclassifying consumer credit cards as commercial.

Credit Suisse and Tax Evasion. Credit Suisse, now owned by UBS, pleaded guilty, entered into a non-prosecution agreement with the Justice Department for other charges, and was fined $510 million for maintaining accounts in Singapore on behalf of U.S. taxpayers who were using those accounts to evade U.S. taxes and reporting requirements.

Walgreen’s Invalid Opioid Prescriptions. In one of the year’s most significant False Claims Act cases, which also involved alleged violations of the Controlled Substances Act, Walgreens Boots Alliance reached a $300 million settlement with the DOJ to resolve allegations that it illegally filled millions of invalid prescriptions for opioids and other controlled substances and then sought payment for many of those invalid prescriptions from Medicare and other federal health care programs.

Hino Motors and Emissions Cheating. The biggest environmental case of the year was announced in January while Joe Biden was still in office. Hino Motors, a subsidiary of Toyota, paid criminal and civil penalties totaling $1.6 billion to resolve federal and California state allegations that the company submitted fraudulent emissions testing data for diesel engines imported into the United States.

Kimberly-Clark and Fraudulent Testing. Kimberly-Clark paid over $40 million in fines and compensation to resolve federal allegations that it conducted fraudulent testing on surgical gowns marketed as providing the highest level of protection against fluid and viruses.

Turning now to matters handled by state attorneys general and state regulatory agencies, there were more than 30 such cases which resulted in a penalty of $50 million or more. For example:

DuPont et al. and PFAS. DuPont, Chemours, and Corteva, all of which emerged from the old E.I. DuPont de Nemours and Co., together agreed to pay $2.6 billion to remedy long-standing contamination stemming from PFAS originating from four industrial sites in New Jersey.

Google and Privacy. The Texas Attorney General announced that Google would pay $1.4 billion to resolve allegations it unlawfully tracked and collected users’ private data regarding geolocation, incognito searches, and biometric data.

UnitedHealth Group and Unnecessary Insurance. HealthMarkets Inc., a subsidiary of UnitedHealth Group, was ordered to pay $165 million in penalties and restitution in a case in which the Massachusetts Attorney General accused the company of misleading consumers into buying unnecessary health insurance products.

As for private litigation, more than 30 class action lawsuits with settlement amounts in excess of $50 million received final court approval this year. They include:

Blue Cross Blue Shield Anti-Competitive Practices. Blue Cross Blue Shield Association agreed to pay $2.8 billion to settle litigation brought by medical providers alleging that BCBS policies prevented its members from competing against each other.

Wage-Fixing. Tyson Foods paid $115 million and Perdue Farms paid $60 million to resolve allegations that they participated in a conspiracy among poultry companies to keep wage levels low.

Apple and Privacy. Apple agreed to pay $95 million to settle litigation alleging its Siri voice-activated software violated the privacy of users by eavesdropping on conversations.

The largest penalty outside the U.S. documented in Violation Tracker Global this year was the $3.4 billion fine imposed on Google by the European Commission for distorting competition in the advertising technology industry. The EC also brought large fines against Apple ($575 million) and Meta Platforms ($230 million).

Major penalties were seen in the area of privacy. The Irish Data Protection Commission fined TikTok $599 million, while the French privacy agency CNIL fined Google $378 million and e-commerce giant SHEIN Group $174 million.

The biggest environmental case outside the U.S. was a $140 million penalty against Thames Water in the UK for serious wastewater violations.

The main conclusion from all these cases is that misconduct on the part of large corporations remains pervasive around the world. In the United States, the future of regulatory enforcement at the federal level is uncertain, yet state and local regulators, along with plaintiffs’ lawyers, seek to fill the gap.

SCOTUS-Style Deregulation

In another example of how the conservative majority on the Supreme Court has become all too willing to throw out well-established law, the rightwing Justices strongly signaled they are ready to overturn a 90-year-old precedent that protects members of independent government agencies from being fired for no good reason by the president.

The case focuses on Donald Trump’s capricious removal of a Democratic member of the Federal Trade Commission, but the eventual ruling will likely have significant consequences for many other independent bodies.

It is worth keeping in mind that many of these bodies are responsible for oversight of business activities Allowing a president like Trump to remove commission members without good cause will allow him to fill the bodies with individuals who are loyal to him and hostile to the mission of the agency. It amounts to backdoor deregulation.

Here are some of the key business regulators that would be affected.

Securities and Exchange Commission. The SEC is the main agency responsible for enforcing laws against financial market manipulation. Violation Tracker documents more than 3,000 cases against companies brought by the agency since 2000, with total penalties of more than $45 billion. The agency has fined JPMorgan Chase 30 times and collected over $2 billion in penalties.

Federal Trade Commission. The FTC, with responsibilities relating to consumer protection and antitrust, has collected over $18 billion from corporations. Among the biggest cases are the $5 billion penalty paid by Facebook for violating a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information; a $4 billion penalty paid by Volkswagen as part of the emissions cheating scandal; and the $2.5 billion penalty paid by Amazon for making it difficult for consumers to cancel their Prime subscriptions.

Commodity Futures Trading Commission. The CFTC, which regulates derivatives markets, has collected $32 billion in penalties in 830 cases against companies. The biggest cases include a $12.7 billion fraud judgement against FTX Trading Ltd. and Alameda Research and a $2.7 billion penalty against Binance Holdings.

Consumer Financial Protection Bureau. Before it was all but demolished by the Trump Administration this year, the CFPB collected nearly $18 billion in penalties against financial fraudsters. Wells Fargo paid over $4 billion in penalties in its bogus accounts scandal. Just about every other large bank was fined for a variety of harms perpetrated against their customers.

 Others include the Consumer Products Safety Commission, the Federal Energy Regulatory Commission, and the National Labor Relations Board.

Donald Trump has not waited for a green light from the Supreme Court to initiate his attack on these regulatory agencies. Unlike traditional pro-business conservatives, Trump is not interested in simply weakening these bodies to benefit corporations. He is also weaponizing some of them to carry out his ideological agenda.

Ardent MAGA loyalists appointed to head bodies such as the FTC and the Federal Communications Commission are using their authority to put pressure on Trump’s foes and promote Trump’s pet issues. A ruling by the Supreme Court affirming the president’s absolute control over the agencies will serve to legitimize Trump’s hijacking of the bodies.

In arguing the administration’s case before the Court, Solicitor General claimed that giving the president absolute control over the agencies will make them “more accountable.”

The truth, of course, is the exact opposite. The conversion of independent agencies into pawns of a ruthless president will derail their public interest mission, much to the delight of rogue corporations everywhere.

Can Federal Corporate Investments Be Used for Good?

Donald Trump takes pleasure in getting institutions of all kinds to bend to his will. That includes major corporations. In a move that contradicts the usual deference the public sector in the U.S. shows to big business, Trump has forced a group of large companies to allow the federal government to acquire significant ownership stakes.

These investments are being justified in the name of national security. The Administration is expected to use its holdings to influence the operating and financial decisions of the companies, which operate in areas such as rare earth minerals, semiconductors, steel, and nuclear energy.

It remains to be seen exactly what that influence looks like, but the willingness of Trump to press the private sector to serve his idea of the national interest raises the question of whether he could also get the companies to better serve the public interest.

The companies in the federal portfolio includes some with a significant record of misconduct. Take U.S. Steel, which received approval to be acquired by Japan’s Nippon Steel only after the parties agreed to grant the administration a so-called golden share, giving it extensive power over the company’s policies.

As shown in Violation Tracker, U.S. Steel has racked up over $300 million in fines and settlements since 2000, including $250 million for environmental offenses and $80 million for competition-related offenses. The biggest portions of these came from a 2020 settlement with the Pennsylvania’s Allegheny County Health Department regarding air pollution violations and a 2014 class action suit regarding steel price-fixing.

Or take Intel, which Trump pressured to sell a 10 percent stake to the administration for about $9 billion. Intel has paid out about $112 million in penalties, most of which came from a 2015 settlement of private litigation alleging it conspired with other tech companies not to hire each other’s employees, thus suppressing salary levels. The company also paid $5 million to settle a suit accusing it of denying overtime pay and failing to provide meal and rest breaks.

Then there is Westinghouse Electric, which was pressed to enter into a partnership with the administration to build new nuclear power plants. In exchange for arranging financing and assisting with permits, the federal government would eventually receive a share of profits and would obtain a significant equity stake if Westinghouse, which is now majority-owned by Brookfield Corporation, is spun off.

Westinghouse Electric has received more than $5 million in penalties, including cases involving unfair labor practices, environmental offenses, workplace safety violations, and nuclear safety infractions.

The willingness of Trump to pressure corporations on decisions relating to investment raises the question of whether he would also use his leverage to address these types of misconduct. That is probably unlikely when it comes to environmental offenses, given his tendency to demonize the EPA. But what about practices such as wage theft and workplace safety deficiencies? Trump, after all, likes to portray himself as pro-worker.

There might also be some appeal in attacking price-fixing if it helps Trump given the impression he is addressing the affordability crisis. He has already made noises about cracking down on price-fixing in the beef industry.

Whatever Trump ends up doing, any steps he takes to use federal investments to change corporate behavior would serve as a precedent that a more enlightened president could put to better use.

The FTC Bucks the MAGA Anti-Regulatory Crusade

The Consumer Financial Protection Bureau is in limbo. The Environmental Protection Agency has been turned into a fossil fuel cheerleader. The Securities and Exchange Commission has drastically scaled back its enforcement activity. The Federal Communications Commission is focused on using its powers to attack perceived enemies of the Trump Administration.

Across the federal bureaucracy, agencies seem to be reshaping themselves in accordance with Donald Trump’s belief that regulation of business is evil. And now with the shutdown, those agencies are barely operating at all.

Yet there is one agency that bucked the trend and continued its mission of exercising oversight of corporate behavior: the Federal Trade Commission. Until the shutdown caused it, too, to suspend operations, the FTC has been engaged in conventional and even aggressive enforcement activity.

Most notably, the FTC recently announced the resolution of a case against Amazon.com for using deceptive methods to enroll consumers in its Prime service and then making it difficult for them to unsubscribe. As part of the resolution, Amazon was required to pay a civil penalty of $1 billion and provide $1.5 billion in refunds while also changing its practices.

The only other Trump 2.0 penalty that comes close in size was the Federal Deposit Insurance Corporation’s settlement in April requiring Discover Bank (now owned by Capital One) to pay $1.2 billion in restitution and a $150 million civil penalty to resolve allegations its overcharged credit card fees. The FDIC has announced no significant penalties since then.

In the period since Trump took office, the FTC has announced more than a dozen other resolved enforcement actions. After the Amazon case, the largest was a $100 million judgment against a company called Assurance IQ for the deceptive marketing of substandard health insurance plans. Among the other companies that have paid penalties to the FTC this year are Walmart, Walt Disney, and Match.com.

Other significant cases are still under way. In September, the FTC sued Live Nation and Ticketmaster for engaging in improper arrangements with ticket brokers that ended up costing consumers billions of dollars in inflated prices.  In April, the agency sued Uber for deceptive billing and cancellation practices.

Along with consumer protection action, the FTC has been pursuing its responsibilities as an antitrust regulator. The agency has continued to pursue a lawsuit, originally filed in 2020 in conjunction with state attorneys general, that accuses Meta Platforms of using anti-competitive mergers to gain monopoly power in certain segments of social media.

The FTC recently sued Zillow and Redfin for entering into an agreement the agency says improperly reduced competition in the market for rental housing online advertising.

There have also been some dubious actions on the part of the FTC, especially an investigation of the advocacy group Media Matters for supposedly engaging in an illegal boycott of X. In August a federal judge issued a preliminary injunction in favor of Media Matters, which argued that the case was politically motivated.

Also politically motivated was the Administration’s improper firing of the FTC’s Democratic commissioners.

On the whole, however, the FTC has not abandoned the aggressive enforcement posture it adopted during the Biden Administration under the leadership of chair Lina Khan. Hopefully, its approach will have some influence on those federal agencies carrying out MAGA-style anti-regulatory crusades.

Tough Talk on Deceptive Drug Ads

With the announcement of a crackdown on deceptive advertising by pharmaceutical companies, RFK Jr. is once again showing that he may not be a complete crackpot. At his apparent direction, the Food and Drug Administration said it is sending about 100 cease-and-desist letters to drugmakers found to be making use of broadcast and digital ads that downplay the safety risks of their products.

The FDA’s move was reinforced by a presidential memorandum suggesting that the administration will move to change federal drug advertising policy, which since 1997 has allowed companies to limit the amount of information they have to include on harmful side effects. Today, the pharmaceutical industry spends billions of dollars a year on consumer advertising, a cost that helps drive up drug prices.

Marketing drugs to consumers has a long and contested history. It was the business model of the 19th century patent medicine purveyors, who promoted their dubious products directly to users. To counteract the hucksters, entrepreneurs such as Eli Lilly began to create what became known as ethical drug operations to make safer remedies available to medical professionals. At the same time, there was a move by reformers such as Dr. Harvey Wiley to get the federal government to regulate the industry. The result was the 1906 Pure Food and Drugs Act, which among other things banned false and misleading claims. The 1938 Food, Drug and Cosmetic Act imposed further restrictions.

As a result, for decades, drugmakers focused on marketing to doctors through ads in medical journals and visits from sales representatives known as detail men. It turned out, however, that the ethical drugmakers could be as dishonest as the patent medicine purveyors. In the late 1950s Pfizer was embroiled in a controversy over deceptive ads in the journals.

It was not until the 1990s that the pharmaceutical industry began pushing for greater freedom to communicate directly with consumers. It succeeded in getting the FDA to issue new rules allowing broadcast ads that included only limited safety warnings.

Along with a flood of advertisements came a wave of scandals. In 2000, for example, the FDA warned Pfizer and Pharmacia, co-marketers of the arthritis drug Celebrex, that the consumer ads they were running for the medication were false and misleading. In 2003 Pfizer paid $6 million to settle with 19 states that had accused the company of using misleading ads to promote its Zithromax medication for children’s ear infections.

In 1999 a federal judge ordered Eli Lilly to stop promoting its osteoporosis drug Evista with what were said to be false claims that the medication reduced the risk of breast cancer. Lilly later pled guilty and paid $36 million in connection with the illegal promotion of Evista. In 2005 the FDA warned Lilly that its television advertisement for Strattera, a drug for attention deficit hyperactivity disorder, understated the risks associated with the medication.

In 2004 the FDA sent a warning letter to GlaxoSmithKline charging that a TV advertisement for the antidepressant Paxil was false and misleading.

In 2008 Merck agreed to pay $58 million to settle charges brought by more than two dozen states that the company’s advertisements for the arthritis medication Vioxx deceptively downplayed the health risks of the drug.

The list could go on. The upshot is that drugmakers frequently abused their new marketing freedom. The FDA and other regulators took some actions against the companies, but there is no evidence that their enforcement actions had much of a deterrent effect.

This brings us back to the present. It is good that the Trump and RFK Jr. are voicing concern about deceptive marketing, but they are not proposing any specific new initiatives. It is also unclear that they are serious about enforcing existing rules more vigorously. After all, this is an administration that has generally demonized regulation and has retreated from strong action against corporate miscreants.

Time will tell whether what they are doing amounts to anything substantial or is just another empty political gesture.