A fight over attorney client-privilege has erupted in the FTC v. Amazon case. On Wednesday, the Association of Corporate Counsel (ACC) filed an amicus brief addressing the issue. Here is the gist of situation:

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The FTC alleges in their Amended Complaint violations of the Restore Online Shoppers’ Confidence ACT (ROSCA) by Amazon. To get monetary penalties, the FTC has to establish that Amazon had “actual knowledge or knowledge fairly implied on the basis of objective circumstances” that their conduct was unfair or deceptive. Well, to satisfy this element, the FTC has effectively said “Amazon knew it’s conducted was bad because they conferred with counsel knowledgeable on ROSCA and the FTC Act.”

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According to the ACC, basing liability on privileged conversations with counsel violate the principles of attorney client privilege. It makes sense, especially looking at it through this lens:

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The verdict:

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The arguments posed by the ACC make a lot of sense. Under the FTC’s theory, conversations between companies and their counsel would be immediately open up the company to liability. This likely invades the attorney client privilege and,  practically speaking, disincentivizes companies from seeking legal guidance from their attorneys.

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