FTC Warns Against Contract Provisions It Believes Could Impede Its Investigations

The Federal Trade Commission’s (FTC’s) Bureau of Competition (the “Bureau”) recently issued a statement identifying concerns with commonly used contractual provisions.

The Bureau’s statement indicated that confidentiality provisions, nondisclosure agreements, and “notice of agency contact” clauses have the potential to impede FTC investigations by hindering voluntary interviews that enforcement staff wants to have with other market participants.

The Bureau’s focus seems to be on voluntary interviews and its belief in the chilling effect the identified contractual provisions can have on those interviews. Interestingly, the Bureau’s statement acknowledged that the FTC has the authority to obtain information via compulsory processes. However, the FTC clearly hopes to avoid being required to use such processes in every situation. Specifically, the statement indicated that the FTC believes the identified provisions may be void as against public policy, insofar as the provisions either hinder a party from speaking freely with the FTC or require a party to disclose information to an investigative target about the FTC’s outreach or communications. Finally, the statement went so far as to note that actions by investigative targets that obstruct FTC investigations and enforcement actions may be viewed as unlawful and rise to the level of a criminal violation.