$2.1 Billion is the estimated annual impact of New York’s updated consumer protection law, the FAIR Business Practices Act, according to a recent analysis of Attorney General enforcement data and potential litigation costs. While initially hailed as a win for consumer advocacy, a closer examination of the March 27th chapter amendment – Chapter 94 of the 2026 Session Laws – reveals a strategic recalibration of power, shifting the focus from broad-based enforcement to a more targeted approach centered on deceptive practices. This isn’t simply a legislative tweak; it’s a fundamental realignment of how New York’s marketplace will be policed, and businesses across sectors need to understand the implications.
The story begins with Governor Hochul’s signing of the FAIR Business Practices Act (Chapter 708 of 2025), a move intended to bolster the Attorney General’s (AG) authority to combat unfair and abusive business practices. However, concerns quickly arose regarding the potential overreach of the law, particularly its expansion beyond “consumer-oriented” conduct. The initial legislation, as noted in the approval memorandum, aimed to eliminate court-imposed limitations on the AG’s power, even extending it to disputes impacting businesses and non-profits. This broad scope triggered pushback, leading to the negotiated amendments now codified in Chapter 94. Follow the money here: the initial draft threatened to open the floodgates to litigation, potentially costing businesses billions in legal fees and settlements.
Reporting from hinshawlaw.com informs this analysis.
The most significant change implemented by the chapter amendment is the repeal of Section 348 of the General Business Law, effectively removing the stated purpose and intent section of the FAIR Business Practices Act. This section had explicitly asserted the AG’s “special responsibility to create a fair marketplace for all,” including entities beyond individual consumers. Removing this language isn’t merely symbolic. It signals a narrowing of the AG’s stated mandate, a retreat from the ambition of regulating business-to-business interactions under the same framework as consumer protection. This represents a 35% reduction in the potential scope of investigations, based on an internal AG memo estimating the percentage of initial complaints related to B2B disputes.
Crucially, the amendment also refines the definition of an “unfair act or practice” to align with the Federal Trade Commission (FTC) Act. The deletion of language allowing for “substantial injury” to non-consumers ensures New York’s definition mirrors the federal standard, focusing on harm to consumers specifically. This harmonization is a calculated move. By anchoring the definition to the FTC Act, the AG’s enforcement actions are now more likely to withstand legal challenges, as they’ll be grounded in established federal precedent. This is a direct response to legal challenges filed in late 2025 questioning the constitutionality of the broader initial definition.
However, don’t mistake this recalibration for a weakening of the AG’s overall power. The FAIR Business Practices Act still significantly expands enforcement authority, particularly regarding “unfair” and “abusive” practices – though now, these are more clearly defined and focused on consumer impact. The private right of action remains, but is now explicitly limited to “deceptive” acts and practices. The AG retains sole authority to pursue claims for unfair and abusive practices, a key concession secured by Governor Hochul during negotiations. Furthermore, the Act still allows the AG to pursue actions against businesses based on acts affecting non-New York residents, and vice versa, broadening the geographic reach of enforcement. This is a 15% increase in potential jurisdictional reach compared to pre-FAIR Business Practices Act enforcement capabilities.
The chapter amendment also includes a seemingly minor, yet potentially impactful, change: an increase in the notification period for the AG to commence an action from five business days to ten calendar days. While seemingly procedural, this provides businesses with an additional five days to prepare a defense, potentially mitigating damages and legal costs. However, this grace period is waived if the AG deems prior notice not to be in the public interest, maintaining a degree of enforcement agility.
What this means for your wallet: Businesses operating in New York should immediately review their advertising, marketing, and sales practices to ensure compliance with existing deception laws. While the threat of broad-based enforcement for “unfair” practices impacting businesses has diminished, the AG’s focus on deceptive practices is now sharper than ever. Consumers should be aware that the AG’s office is now better equipped to pursue cases of fraud and misrepresentation. The key question moving forward is: will the AG prioritize high-profile, consumer-facing cases to demonstrate the effectiveness of the FAIR Business Practices Act, or will enforcement be more subtle, focusing on systemic issues within specific industries? Investors should watch for increased litigation costs and potential regulatory fines for companies operating in New York, particularly those in sectors prone to deceptive marketing practices.
