Legal Library: Cases and Proceedings

Tapjoy, operator of an advertising platform within mobile gaming apps, has settled Federal Trade Commission allegations that it failed to provide in-game rewards promised to users for completing advertising offers.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

Bionatrol Health, LLC. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs without human clinical testing to substantiate the claims. It also requires competent and reliable scientific evidence for other health-related product claims, and prohibits the respondents from misrepresenting the cost of any good or service and from charging consumers without their express, informed consent. It requires the corporate respondents and individual respondent Marcello Torre to pay $20,000 to the FTC and to notify consumers of the order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint can be found on the FTC’s website as a link to each case. The FTC announced final approval of all six orders in March 2021.

CBD Meds, Inc. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. More broadly, it requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaints can be found on the FTC’s website as a link to each case. The FTC announced final approval of all six orders in March 2021.

Epichouse LLC. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. It requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to pay $30,000 to the FTC and notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

HempmeCBD. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. It also requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to pay the FTC $36,254 and to notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

Reef Industries, Inc. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. More broadly, it requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires them to pay the FTC $85,000 and notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

Steves Distributing, LLC. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. More broadly, it requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to pay the FTC $75,000 and notify consumers of the Commission’s order.

The owners of a scam that targeted Latina consumers with promises of wealth and financial security are permanently prohibited from selling money-making opportunities under the terms of a settlement with the Federal Trade Commission.

In a complaint filed as part of the FTC’s Operation Income Illusion sweep, the agency alleged that Moda Latina BZ Inc., Esther Virginia Fernandez Aguirre, and Marco Cesar Zarate Quíroz specifically targeted Latina consumers in Spanish-language ads on TV with false promises of earnings at home.

On October 21, 2019, the FTC announced it had halted the deceptive online marketing tactics of two companies and their principals, the first of which allegedly sold fake indicators of social media influence, and the second of which allegedly used fake product reviews posted by its employees on a well-known retail website. In the first case, Devumi, LLC and its owner and CEO, German Calas, Jr., agreed to settle the FTC’s first-ever complaint challenging the sale of fake indicators of social media influence. In the second case, cosmetics firm Sunday Riley Modern Skincare, LLC and its CEO agreed to settle an FTC complaint charging them with misleading consumers by posting fake reviews of the company’s products on a major retailer’s website, at the CEO’s direction, and by failing to disclose that the reviewers were company employees. The court entered the final order on October 22, 2019.

The Federal Trade Commission filed suit against cyanoacrylate glue maker Chemence, Inc., and company president James Cooke, for supplying pre-labeled and pre-packaged glues with deceptive “Made in USA” claims to trade customers to use in marketing the strong, fast-acting glues under retailer brand names. The FTC’s complaint  alleges that Chemence and Cooke supplied glues in packages labeled with deceptive unqualified “Made in USA” claims, some with an image of the American flag, for products such as Master Super Glue, JB WELD SuperWeld, Stick Fast Instant CA Adhesive, Pink Gel Nail Glue, SAATI Ultrafix CA – MV, and Kiss Maximum Speed Nail Glue.  The proposed settlement requires Chemence and Cooke to pay $1.2 million to the FTC, the highest monetary judgment ever for a Made in USA case. On Feb. 12, 2021, the Commission announced the final consent agreement in this matter.

SkyMed must put in place a comprehensive information security program as part of a settlement with the FTC over allegations the company failed to take reasonable steps to secure sensitive consumer information such as health records.

Zoom Video Communications, Inc. will be required to implement a robust information security program to settle FTC allegations that the video conferencing provider engaged in a series of deceptive and unfair practices that undermined the security of its users.

Pharmaceutical companies Pfizer Inc. and Mylan N.V. have agreed to divest assets and abide by other conditions to settle Federal Trade Commission charges that the proposed combination of Upjohn Inc. and Mylan N.V. will harm current or future competition in ten generic drug markets. The FTC’s complaint alleges that the proposed combination would harm current U.S. competition in seven product markets by reducing the number of existing suppliers, and that it would harm future U.S. competition in three additional product markets. The proposed consent order requires divestitures in all 10 markets.

The Federal Trade Commission took legal action against three ticket brokers based in New York who allegedly used automated software to illegally buy up tens of thousands of tickets for popular concerts and sporting events, then subsequently made millions of dollars reselling the tickets to fans at higher prices.

The three ticket brokers will be subject to a judgment of more than $31 million in civil penalties for violating the Better Online Ticket Sales (BOTS) Act, under a proposed settlement reached with the FTC. Due to their inability to pay, the judgment will be partially suspended, requiring them to pay $3.7 million.

This is the first case brought under the BOTS Act, which was enacted in 2016 and gives the FTC authority to take law enforcement action against individuals and companies that use bots or other means to circumvent limits on online ticket purchases.

The Federal Trade Commission took legal action against three ticket brokers based in New York who allegedly used automated software to illegally buy up tens of thousands of tickets for popular concerts and sporting events, then subsequently made millions of dollars reselling the tickets to fans at higher prices.

The three ticket brokers will be subject to a judgment of more than $31 million in civil penalties for violating the Better Online Ticket Sales (BOTS) Act, under a proposed settlement reached with the FTC. Due to their inability to pay, the judgment will be partially suspended, requiring them to pay $3.7 million.

This is the first case brought under the BOTS Act, which was enacted in 2016 and gives the FTC authority to take law enforcement action against individuals and companies that use bots or other means to circumvent limits on online ticket purchases.