FTC Abandons Disparate Impact And “Unfair Discrimination” Theories: A Major Shift In ... - Mondaq
mondaq.com
The FTC is dropping "unfair discrimination" enforcement after a federal court rejected the theory in 2023 — a major pivot in how regulators can police bias.
Disparate Impact TheoryPrincipal-Agent ProblemRegulatory CaptureLegal Formalism
Theory Briefing
- A federal court rejected the CFPB's disparate impact theory in 2023, setting the legal stage for the FTC's broader retreat from discrimination enforcement.
- After a change in administration and leadership, the CFPB dropped its own appeal — signaling a coordinated regulatory pullback across agencies.
- The FTC abandoning 'unfair discrimination' theories narrows the tools available to challenge practices that produce biased outcomes without proven intent.
- The shift reframes the debate: whether harm to consumers requires proof of deliberate bias or whether unequal outcomes alone are enough to trigger liability.