Cable Companies, Automakers Try To Derail FTC, FCC Quest To Kill Misleading Fees

Policy

from the this-is-why-we-can't-have-nice-things dept

For decades now, airlines, hotels, cable companies, banks and a long list of other companies have bilked U.S. consumers out of billions of dollars annually via bullshit fees that unfairly jack up the advertised price of service. More interesting perhaps is the fact that it it took until 2023 for a U.S. federal regulator to even ponder the idea that this was perhaps bad and could or should be stopped.

Last year, the FTC announced it would be cracking down on such fees. That included a 126 page proposal aimed at the auto industry’s use of “administrative fees,” document fees, and other markups used to fatten up the price consumers pay for new or used cars.

Not surprisingly the auto industry didn’t much like that, and has been fighting the effort in court. While the rules were supposed to go into effect on July 30, the National Automobile Dealers Association (NADA) and Texas Automobile Dealers Association filed a challenge with the notoriously wacky (and corporate friendly) Fifth Circuit Court of Appeals, which has suspended the FTC’s plan upon review.

As with most such challenges, the automakers are trying to claim the FTC doesn’t have the authority to implement such rules, despite the agency’s authority to police “unfair and deceptive” behavior being very clear under the FTC Act:

“The dealership groups, in the petition to the Fifth Circuit, called it “an abuse of discretion” and seek the court to block its implementation. The FTC maintains that the rule “does not impose substantial costs, if any” on law-abiding dealerships, and instead simply guarantees a more even playing field for both dealerships and consumers by eliminating junk fees and hidden costs.”

Automakers aren’t the only well funded corporations fighting the FTC’s effort. The cable industry is also hard at work fighting FTC and FCC plans to crack down on the billions of dollars cable companies make off of junk fees, again by claiming the agencies don’t have the legal authority to do their jobs.

Here’s the thing: the FTC and FCC aren’t doing anything crazy here. They’re doing the absolute bare minimum when it comes to policing obnoxious, misleading fees, often used to help companies falsely advertise a lower price that doesn’t actually exist. And even here you can see how such efforts face an unrelenting legal and lobbying assault by companies with near-unlimited legal and lobbying budgets.

Now remember that the corrupt Supreme Court is on the precipice of dismantling Chevron, a cornerstone of regulatory law as we know it, effectively undermining most existing independent regulatory authority. Once Chevron is dead, every last regulatory decision corporations don’t like will be challenged in court, and it will be left to a (potentially corrupt) judge to determine what regulators can or can’t do.

Picture this fight over fees. Now apply it to pretty much any regulatory effort to do anything. Then apply the assumption that corporations will win most of the time thanks to corrupt, unelected judges (often with lifetime appointments), and you’ll begin to see the full picture.

As it stands, Congress passes a (often vague and badly written) law, and it’s up to regulators with very tailored knowledge (on subjects ranging from wireless spectrum management to emission controls) to implement useful rules within the confines of the law. The axing of Chevron eliminates much of that independent authority, meaning they can’t do anything not very specifically outlined by Congress.

The flimsy underlying justification for killing Chevron is that it rebalances the constitutional order, shifting power away from the Executive and back to Congress. In reality, corporations captured Congress long ago. They know it’s hard to get Congress to reform much of anything. Now they’re aiming to finish the job by all-but lobotomizing what’s left of regulatory independence (net neutrality was a lovely example).

The goal is the final beheading of what’s left of the already undermanned and underfunded federal regulatory state. It’s the final killing blow of regulatory power at the hands of U.S. corruption, dressed up as a good faith effort to restore constitutional balance and free unfairly burdened corporations from the “tyranny” of already fairly feckless U.S. corporate oversight.

In reality, the axing of Chevron is going to result in gridlock in the courts, as every last regulatory decision corporations don’t like are challenged by corporations under the claim regulators have no authority. That’s going to result not only in the dismantling of existing consumer protections, environmental reforms, and public safety initiatives, but will chill any efforts to craft any new reforms.

That will shift most consumer protection to the handful of states that actually still care about such things. At that point, with federal regulatory oversight dead, corporations can shift all of their attention and resources toward undermining state regulatory power. Again, the goal here isn’t a good faith concern about free markets or constitutional balance, it’s completely unchecked corporate power.

The goal is handcuffing regulators’ hands behind their backs as the U.S. is scrapped and sold for parts out the back door, by men who can retreat to their private islands once the girders give way and the roof begins to collapse on the rest of us. Consumer protection, environmental law, election law, and public safety are facing an historic existential threat.

I don’t think most people really understand the scope and scale of what’s coming down the road once Chevron is dismantled. And I don’t expect the broken “both sides,” billionaire-owned U.S. press will make that threat clear to readers.

But I do think that the full impact of the Supreme Court’s looming decision will be painfully obvious to U.S. residents in the decade to come. At which point current debates — like the auto industry’s attempt to stop the FTC from policing predatory fees — will seem downright adorable by comparison.

Filed Under: automakers, cable, cable tv, chevron, consumer protection, consumers, fcc, ftc, junk fees, regulations