Legal Library: Cases and Proceedings

The FTC taking action against education technology provider Chegg Inc. for its lax data security practices that exposed sensitive information about millions of its customers and employees, including Social Security numbers, email addresses and passwords.

The Federal Trade Commission has taken action against credit services company Credit Karma for deploying dark patterns to misrepresent that consumers were “pre-approved” for credit card offers. The FTC alleges that the company used claims that consumers were “pre-approved” and had “90% odds” to entice them to apply for offers that, in many instances, they ultimately did not qualify for. The agency’s order requires the company to pay $3 million that will be sent to consumers who wasted time applying for these credit cards and to stop making these types of deceptive claims.

In January 2023, the Commission finalized the order in this case.

The Federal Trade Commission authorized an administrative complaint against the proposed merger between Microsoft Corp. and Activision Blizzard, Inc., a video game developer that creates and publishes games such as Call of Duty, World of Warcraft, Diablo, and Overwatch. Microsoft sells the Xbox gaming console and also offers a video game subscription service called Xbox Game Pass, as well as a cloud-based video game streaming service. The agency alleges that the deal would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription and cloud-gaming business. An evidentiary hearing is scheduled for Aug. 2, 2023 at 10 a.m. ET before an Administrative Law Judge at the FTC’s headquarters at 600 Pennsylvania Ave. N.W., Room 532.

In January 2023, the FTC issued an order requiring Ohio-based LCA-Vision, doing business as LasikPlus and Joffe MediCenter, to pay $1.25 million for using deceptive bait-and-switch advertising to trick consumers into believing they could have their vision corrected for less than $300. The order also bans the defendants from making the misrepresentations detailed in the complaint.

The Federal Trade Commission filed an administrative complaint and authorized a federal court lawsuit to block Illumina’s $7.1 billion proposed acquisition of Grail—a maker of a non-invasive, early detection liquid biopsy test that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing. Illumina is the only provider of DNA sequencing that is a viable option for these multi-cancer early detection, or MCED, tests in the United States.

The complaint alleges the proposed acquisition will diminish innovation in the U.S. market for MCED tests, which could be used to detect up to 50 types of cancer. Most of these types of cancer are not screened for at all today, and the MCED test could save millions of lives around the world. The trial began on Aug. 24, 2021. On May 20, 2021, the FTC authorized staff to dismiss its federal court complaint for Preliminary Injunction and Temporary Restraining Order.

The Federal Trade Commission has taken action against Instant Brands, manufacturer of Pyrex-brand kitchen and home products, for falsely claiming that all its popular glass measuring cups were made in the United States during a time some measuring cups were imported from China. The FTC’s proposed order against Instant Brands would stop the company from making deceptive claims about products being “Made in USA” and require them to pay a monetary judgment.

The Federal Trade Commission authorized an administrative complaint against the proposed merger between virtual reality (VR) giant Meta and Within Unlimited, the VR studio that markets Supernatural, a leading VR fitness app. Formerly known as Facebook Inc., Meta sells the most widely used VR headset, operates a widely used VR app store, and already owns many popular VR apps. The agency alleges that Meta’s proposed acquisition of Within would harm competition and dampen innovation in the U.S. markets for fitness and dedicated-fitness VR apps. The evidentiary hearing is scheduled for Feb. 13, 2023 at 10 a.m. ET before an Administrative Law Judge at the FTC’s headquarters at 600 Pennsylvania Ave. N.W., Room 532.

As a result of a Federal Trade Commission lawsuit, investment advice company WealthPress has agreed to a proposed court order that would require it to refund more than $1.2 million to consumers and pay a $500,000 civil penalty for deceiving consumers with outlandish and false claims about their services.

The Federal Trade Commission is taking action against the online alcohol marketplace Drizly and its CEO James Cory Rellas over allegations that the company’s security failures led to a data breach exposing the personal information of about 2.5 million consumers.

The Federal Trade Commission is cracking down on the Warrior Trading day trading investment scheme for making misleading and unrealistic claims of big investment gains to consumers. The FTC alleges that Warrior Trading and its CEO, Ross Cameron, used those claims to convince consumers to pay hundreds or thousands of dollars for a trading system that ultimately failed to pay off for most customers.

As a result of the FTC’s case, Warrior Trading will be required to pay $3 million to refund consumers and will be prohibited from making baseless claims about the potential for consumers to earn money using their trading strategies.

The Federal Trade Commission is sending payments totaling more than $2.9 million to 20,402 people who paid thousands of dollars for Warrior Trading’s investment programs. The company made misleading and unrealistic claims to sell a day trading “system” that failed to pay off for most customers.