Posted by Charlene Brownlee

Congress approved S. 1608, the “Undertaking Spam, Spyware, And Fraud Enforcement with Enforcers beyond Borders Act of 2006,” (the US SAFE WEB Act of 2006) on December 9, 2006. The US Safe Web Act amends the Federal Trade Commission Act (FTCA) and improves the Federal Trade Commission (FTC)’s ability to protect consumers from international fraud by: (1) improving the FTC’s ability to gather information and coordinate investigation efforts with foreign counterparts; and (2) enhance the FTC’s ability to obtain monetary consumer redress in cases involving spam, spyware, and Internet fraud and deception.

Summary of Key Provisions of the U.S. SAFE WEB Act of 2006 (1)

  • Broadening Reciprocal Information Sharing and International Investigative Cooperation. The FTC can now share confidential information in consumer protection cases with foreign law enforcers. The Act further allows the FTC and foreign law enforcement agencies to obtain investigative assistance from one another, while exempting information from foreign agencies from public disclosure laws. This provision addresses the concern expressed by some foreign government agencies that materials they share with the FTC might be publicly disclosed in response to an inquiry under the Freedom of Information Act (FOIA). This concern is reflected in certain foreign laws where the foreign consumer protection agency is not permitted to share information with the FTC unless the information is kept confidential. For example, Canada’s Competition Act and the European Union’s enforcement cooperation regulation contain such confidentiality requirements.(2)
  • Enhancing Confidentiality of FTC Investigations. Prevents notifying subjects of investigations if they may be likely to destroy evidence or move assets offshore.
  • Protecting Certain Entities Reporting Suspected Fraud and Deception Violations. The Act protects a limited category of entities from liability for voluntary disclosures to the FTC relating to suspected fraud and deception. This provision is similar to longstanding protections for financial intuitions making disclosures to the FTC and is necessary to encourage reporting of suspected violations to federal agencies.
  • Allowing Information Sharing with Federal Financial and Market Regulators. This provision assists the FTC in tracking proceeds of fraud and deception sent through U.S. banks to foreign jurisdictions so they can be returned to victims.
  • Enhancing Cooperation between FTC and DOJ in Foreign Litigation. Permits the FTC to work with DOJ to increase the resources relating to FTC-related foreign litigation, such as freezing foreign assets and enforcing U.S. court judgments abroad.
  • Clarifying FTC Authority to Make Criminal Referrals. Authorizes the FTC to share information with criminal authorities, which will improve information sharing with foreign agencies that treat consumer fraud and deception as a criminal law enforcement issue.
  • Report to Congress. The Act requires the FTC to report to Congress within three years from the date of enactment, describing the use of the FTC’s expanded authority and activities under the Act.

[1] U.S. Senate Committee, Commerce, Science & Transportation, Press Release December 9, 2006. See also the Summary of the US Safe Web Act prepared by the FTC.

[2] An Explanation of the Provisions of the US Safe Web Act at 6 (be Spacific Blog by S. Spacific).