Legislature in New York Enacts FAIR Business Practices Law
In a significant move to safeguard consumers, businesses, and non-profits, New York is set to enact the FAIR Business Practices Act. This legislation aims to address examples of unfair, abusive, and deceptive business practices that have significant public consequences.
The Act empowers the Attorney General to enforce the law against businesses engaging in such practices. If enacted, New York will join California and Washington as one of a few states with a statute this broad.
The FAIR Act represents a significant overhaul and expansion of New York's consumer protection laws. Key changes include:
- Expanded Prohibitions: The Act broadens the scope of unlawful business conduct to include not only "deceptive" practices but also "unfair" and "abusive" acts or practices by incorporating federal standards for these terms.
- Elimination of the "Consumer-Oriented" Doctrine: Previously, the law only covered "consumer-oriented" acts with broad impact on consumers. The FAIR Act removes this limitation, allowing enforcement regardless of whether acts are consumer-oriented. This means harms to single consumers or to businesses and non-profits can now be addressed by the Attorney General.
- Extension of Protections: The New York Attorney General's consumer protection role explicitly extends to protecting businesses and non-profits, in addition to individual consumers.
- Enhanced Enforcement Powers: The Act gives the Attorney General stronger tools to pursue violations, including those in private transactions or affecting businesses, not just mass consumer harms.
Expected impacts of these changes include:
- Broader enforcement reach against a wider array of unfair and abusive business practices, potentially increasing legal risks for companies operating in New York.
- Greater protections for small businesses and non-profits that were previously excluded under the older consumer-centric interpretation.
- A regulatory environment more closely aligned with federal consumer protection standards, addressing gaps left by federal rollbacks in enforcement.
- The potential for increased litigation and regulatory scrutiny across multiple sectors due to the wider definitions and expanded protected class of plaintiffs.
- Enhanced consumer and business support through proposed measures like increased funding for enforcement agencies and restitution mechanisms, responding to concerns raised by local officials about diminished federal protections.
The expansion of New York's GBL § 349 is part of ongoing efforts by some state attorneys general to broaden their consumer protection powers and jurisdiction, especially in response to less aggressive enforcement at the federal level. The Act states that an "act or practice made unlawful by this section is actionable by the attorney general regardless of whether or not that act or practice is consumer-oriented." The FAIR Business Practices Act abolishes the "consumer-oriented" judicial doctrine in Attorney General enforcement of New York's law banning deceptive business practices, thereby expanding the kinds of practices that may now be actionable by the Attorney General.
- The FAIR Act, by abolishing the "consumer-oriented" judicial doctrine, empowers the Attorney General to take litigation against businesses for unfair, abusive, or deceptive practices, regardless of whether the practices are consumer-oriented or affect businesses and non-profits.
- Under the expanded protections of the FAIR Business Practices Act, the Attorney General can pursue antitrust violations in finance, as well as other sectors, due to the wider definitions and increased enforcement powers granted by the legislation.
