The Federal Trade Commission has adjusted the maximum dollar amount of civil penalties for violations of 16 provisions of the law the agency enforces, as required by the Federal Civil Penalties Inflation Adjustment Act (FCPIAA) Improvements Act of 2015. This statute directs agencies to adjust annual inflation and makes them effective once they are published in the Federal Register.
The new penalty levels are effective immediately upon posting in the Federal Register, which typically occurs within approximately 3 days.
Inflation-adjusted fines include violations of the FTC Act, Clayton Act, Export Trade Act, labeling laws for fur and wool products, etc. The maximum amount of civil penalties for violations of the Energy Independence and Security Act 2007 has been increased from $ 1,246,249 to $ 1,323,791 for 2022. Other penalties range from a minimum of $ 503 (to instead of 474) for violations of the Energy Policy and Conservation Act to $ 46,517. (was $ 43,792) for violations of the FTC Act, as well as certain other violations of the Energy Policy and Conservation Act.
Key points to remember
- As mandated, the Federal Trade Commission announced inflation-adjusted civil penalty amounts for 2022.
- Certain civil penalties imposed by the FTC are subject to an annual inflation adjustment under the Federal Civil Penalties Inflation Adjustment Act (FCPIAA) of 2015.
- The annual adjustment is based on the percentage difference between the United States Department of Labor’s Consumer Price Index (CPI-U) for the previous October and October of the previous year .
- The annual adjustment multiplier for 2021 to 2022 is 1.06222.
- The new fine amounts are effective upon posting in the Federal Register.
Inflation-adjusted civil penalties table
The table below shows all of the inflation-adjusted FTC fines under the amended FCPIAA for 2022.
|Section 7A (g) (1) of the Clayton Act||Pre-fusion filing notification violations under the Hart-Scott-Rodino Improvements Act||$ 43,792||$ 46,517|
|Article 11 (I) of the Clayton Law||Violations of Cease and Desist Orders Under Section 11 (b) of the Clayton Act||$ 23,266||$ 24,714|
|Article 5 (I) of the FTC law||Unfair or deceptive acts or practices||$ 43,792||$ 46,517|
|Section 5 (m) (1) (A) of the FTC Act||Unfair or deceptive acts or practices||$ 43,792||$ 46,517|
|Section 5 (m) (1) (B) of the FTC Act||Unfair or deceptive acts or practices||$ 43,792||$ 46,517|
|Section 10 of the FTC Law||Failure to produce required reports||$ 576||$ 612|
|Article 5 of the Webb-Pomerene law (export trade)||Failure by associations operating only in the export trade to file the required declarations||$ 576||$ 612|
|Section 6 (b) of the Wool Products Labeling Act||Failure by wool manufacturers to keep required records||$ 576||$ 612|
|Section 3 (e) of the Fur Products Labeling Act||Failure to keep required records of fur products||$ 576||$ 612|
|Section 8 (d) (2) of the Fur Product Labeling Act||Failure to keep required records of fur products||$ 576||$ 612|
|Section 333 (a) of the Energy Policy and Conservation Act||Be aware of EPCA § 332 violations, including labeling violations||$ 474||$ 503|
|Section 525 (a) of the Energy Policy and Conservation Act||Recycled oil labeling violations||$ 23,266||$ 24,714|
|Section 525 (b) of the Energy Policy and Conservation Act||Deliberate violations of labeling requirements for recycled oils||$ 43,792||$ 46,517|
|Section 621 (a) (2) of the Fair Credit Reporting Act||Know the violations of the Fair Credit Reporting Act||$ 4,111||$ 4,367|
|Section 1115 (a) of the Medicare Prescription Drug Improvement and Modernization Act, 2003||Failure to comply with deposit requirements||$ 15,482||$ 16,445|
|Section 814 (a) of the Energy Independence and Security Act 2007||Violations of market manipulation bans and providing false information to federal agencies||$ 1,246,249||$ 1,323,791|
Source: Federal Trade Commission
How increases are calculated
The FCPIAA, as amended, directs federal agencies to adjust all civil monetary penalties under their jurisdiction for inflation in January of each year. The adjustment is based on the percentage change between the United States Department of Labor Consumer Price Index for Urban Consumers (CPI-U) for the previous October compared to October of the last year.
Based on this formula, the COLA multiplier for 2021 to 2022 is 1.06222. The FCPIAA also requires that all adjustments be rounded to the nearest dollar amount. Agencies do not have the discretion to otherwise adjust civil penalties or to adjust the method used to determine the annual adjustment.
The multiplier used to increase the FTC’s civil fines for 2022, based on the changes to the IPC-U.
Effective date and application
The new penalty levels are effective upon posting in the Federal Register, which typically occurs within about 3 days of receipt at the agency. These new penalty levels apply to civil penalties imposed after the effective date even if the violation occurred before the effective date.
If a fine from a previous violation is being collected, however, the amount of the fine does not increase after the effective date. Additionally, since the FCPIAA orders the FTC to adjust civil monetary penalties and publish those adjustments in the Federal Register, prior public notice and comment and a delayed effective date are not required.