Special Ops Podcast Episode Summary: FTC & FDA in 2025 – New Rules That Could Reshape Your Business

Release Date: January 14, 2025

Hosts: Emma Rainville & Ryan Potee (Guest)

Introduction

In this insightful episode of the Special Ops podcast, host Emma Rainville welcomes Ryan Potee, a partner at Gordon Rees and an expert in advertising and e-commerce law. Together, they delve into the anticipated changes in Federal Trade Commission (FTC) and Food and Drug Administration (FDA) regulations for 2025, exploring how these shifts could significantly impact businesses across various industries.

Guest Introduction

Ryan Potee brings a wealth of experience to the table as a partner in Gordon Rees’ Advertising E-Commerce Group, which comprises approximately 1,400 attorneys nationwide. Specializing in areas such as trademark, patents, advertising law, FTC, FDA, PCI compliance, and privacy laws, Ryan serves as an invaluable resource for businesses navigating complex regulatory landscapes.

Ryan Potee [00:50]: "Our firm is about 1400 attorneys... positioned ourselves to be outside general counsel to e-commerce companies."

Overview of 2025 FTC and FDA Changes

Ryan addresses concerns surrounding the new presidential administration, specifically President Trump's return to office. Contrary to popular belief that the FTC may deregulate due to budget cuts or policy shifts, Ryan asserts that the FTC is poised to maintain, if not escalate, its consumer protection efforts.

Ryan Potee [04:31]: "I don't think it's going to change… consumer protection side is really good."

Specific FTC Rule Changes in 2025

Ryan outlines key FTC regulations set to take effect in 2025:

1. Click to Cancel Rule (Negative Option Rule)

   • Description: Mandates that companies offering subscription services must ensure cancellations are clear and straightforward, preventing unauthorized or inadvertent renewals.
   • Quote:

     Ryan Potee [07:56]: "Making sure that your subscriptions are clear, or at least the billing terms are clear."

2. Telemarketing Sales Rule (TSR)

   • Description: Expands from focusing solely on outbound calls to encompassing inbound calls, tightening regulations around telemarketing practices.
   • Quote:

     Ryan Potee [06:38]: "The TSR is going to encompass inbound calls."

3. Business Opportunity Rule

   • Description: Encourages businesses to avoid labeling offerings as "business opportunities," which attracts stringent FTC oversight and requires specific disclosures.
   • Quote:

     Ryan Potee [09:14]: "The FTC has taken the position that... business coaching is actually like I'm going to give you a full blown business opportunity."

4. Truth in Advertising

   • Description: Requires advertisers to ensure all claims are truthful and substantiated, avoiding misleading statements.
   • Quote:

     Ryan Potee [09:06]: "Make sure what you're saying is not convoluted, it's truthful."

Notable Cases and Issues

Ryan discusses recent enforcement actions targeting deceptive business practices, particularly in the business coaching sector. He highlights how the FTC is cracking down on those marketing questionable "business opportunities," often preying on individuals seeking quick success.

Ryan Potee [09:14]: "The more you say I'm going to help you build a business... the FTC has taken the position that that's really no longer a coaching service."

Emma complements this by sharing real-life examples of fraudulent advertising, emphasizing the FTC's role in combating such deceptive practices.

Practical Compliance Strategies

To help businesses remain compliant, Ryan outlines several actionable strategies:

1. Substantiation of Claims

   • Advice: Ensure all product claims are backed by verifiable evidence.
   • Quote:

     Ryan Potee [15:44]: "When you're selling a product, it actually does what you say it's going to do."

2. Monitoring Affiliates and Call Centers

   • Advice: Regularly audit affiliates and conduct mystery shopping to ensure compliance in sales practices.

3. Handling Consumer Complaints

   • Advice: Actively monitor and address consumer feedback on platforms like BBB and Trustpilot to mitigate potential enforcement actions.
   • Quote:

     Ryan Potee [16:52]: "Consumer complaints are seriously the number one driver of enforcement action lawsuits."

4. Implementing Clickwrap Agreements

   • Advice: Utilize enforceable clickwraps during transactions to establish binding contracts, helping to shield against class action lawsuits.
   • Quote:

     Ryan Potee [37:21]: "Terms and conditions are a contract that consumers enter into when they buy your product."

5. Quality Assurance (QA) Processes

   • Advice: Establish thorough QA protocols to ensure that websites and sales processes consistently display accurate terms and conditions, especially during frequent updates or split testing.
   • Quote:

     Ryan Potee [39:30]: "Get a click wrap."

Discussion on FDA Changes

Transitioning to FDA regulations, Ryan discusses the significant implications of telehealth advancements and the burgeoning market for GLP1 drugs like Ozempic. The expansion of telemedicine has facilitated the direct-to-consumer sale of weight loss medications, raising compliance concerns regarding product claims and distribution practices.

Ryan Potee [23:37]: "A bunch of e-commerce brands have built their business around these products being on a short list."

He predicts increased FDA enforcement as certain drugs fall off the “short list,” meaning they are no longer eligible for direct-to-consumer sales without strict regulatory oversight.

Ryan Potee [30:12]: "I think we're going to see enforcement around that."

Conclusion and Final Advice

Wrapping up the episode, Ryan underscores the importance of proactive compliance measures and staying informed about regulatory changes. Emma and Ryan reiterate the crucial role of legal diligence in safeguarding businesses against potential FTC and FDA enforcement actions.

Emma Rainville: "Non-compliance isn't just risky, it's preventable."

Listeners are encouraged to access free compliance resources and playbooks available on the Special Ops website to stay ahead of regulatory changes.

Key Takeaways:

• FTC Focus: While antitrust enforcement may see restraint under the new administration, consumer protection remains a top priority.
• New Rules: The Click to Cancel and expanded Telemarketing Sales Rules are poised to significantly impact subscription and telemarketing practices.
• Compliance Strategies: Businesses must ensure truthful advertising, proper subscription disclosures, robust monitoring of affiliates, and enforceable contracts to stay compliant.
• FDA Implications: The rise of telehealth and direct-to-consumer pharmaceuticals like GLP1s will attract increased FDA scrutiny, necessitating careful compliance strategies.
• Proactive Measures: Implementing comprehensive QA processes and maintaining clear, substantiated claims are essential to mitigate enforcement risks.

For a more detailed exploration and actionable strategies, listeners are encouraged to download the free playbooks available at specialopspodcast.com.

Note: This summary is intended to provide an overview of the podcast episode for informational purposes. For specific legal advice, consult with a professional attorney.