FTC aims to protect gig workers from unfair, deceptive, and anticompetitive practices

Federal Issues FTC Consumer Protection UDAP FTC Act Enforcement

On September 15, the FTC adopted a new policy statement outlining several issues facing consumers working in jobs that are part of the gig economy. According to the Commission, gig workers face potential harm related to misrepresentations about the nature of the work, diminished bargaining power for transparency, and anticompetitive hurdles resulting in reduced choice. The policy statement “makes clear that the FTC’s authority to enforce both competition and consumer protection law in the gig economy is not affected by how companies choose to classify the consumers who perform gig work.” Specifically, the Commission lists several areas where it will focus its attention on preventing consumer harm: (i) companies will be held accountable for claims and conduct about costs and benefits, including potential earnings, and must be transparent about costs borne by workers; (ii) companies using artificial intelligence or other advanced technologies for pay, performance, and work assignments are required to uphold promises made to workers, and must ensure that any restrictive contract terms do not violate the FTC Act or other statutes; and (iii) companies may be subject to investigations related to potential exclusionary or predatory conduct causing reduced compensation or poor working conditions. Companies that fail to comply with laws governing unfair, deceptive, or anticompetitive practices may be required to pay consumer redress and civil penalties, and may also be ordered to cease their unlawful business practices.