When it comes to avoiding FTC lawsuits, many ask whether they are immune to such an action because the business, the business owners, and/or the business assets are located outside the United States. The answer is that there is probably not immunity in these circumstances, so long as U.S. customers were affected by the alleged violations of the FTC Act. Our firm has worked on several FTC enforcement actions where the FTC obtained the cooperation of governmental agencies local to the defendant. Thus, if you are located abroad, you should not count on your international location to protect you against the reach of the FTC.
While international businesses may question whether the FTC Act and related statutes have extraterritorial application, the FTC has sought to use enforcement powers over claimed unfair or deceptive acts or practices that cause or are likely to cause reasonably foreseeable injury within the United States, or involve material conduct occurring within the United States. In addition, the FTC works with more than 100 foreign competition and consumer protection authorities around the world, and cooperates with foreign authorities on enforcement and policy i.e., matters through formal and informal agreements. This notwithstanding, companies that have international sales or offshore accounts should work with counsel, potentially in and outside the United States, to appropriately weigh risks and legal issues. This will lead to an understanding of what changes in business practices may decrease the risk of the FTC alleging jurisdiction over international operations.