Legal Library: Cases and Proceedings

LifeLock paid $100 million to settle Federal Trade Commission contempt charges that it violated the terms of a 2010 federal court order that requires the company to secure consumers' personal information and prohibits the company from deceptive advertising. 

The FTC issued an administrative complaint charging that Fidelity National Financial’s proposed $1.2 billion acquisition of Stewart Information Services would violate the antitrust laws by significantly reducing competition for title insurance underwriting for large commercial transactions in 45 states and the District of Columbia, and for title information services in 14 local markets. The FTC alleges that if consummated, the merger would reduce an industry dominated by “the Big 4” players to the Big 3. Post-merger, Fidelity would control more than 43 percent of all title insurance sales nationwide, and over 40 percent of sales for large commercial transactions in most state-level markets. The FTC also authorized staff to seek in federal court a temporary restraining order and a preliminary injunction to prevent the parties from consummating the merger, and to maintain the status quo pending the administrative proceeding. On Sept. 10, 2019, the parties abandoned the transaction.

Chemical companies Quaker Chemical Corp and Houghton International Inc. have agreed to divest assets to a subsidiary of French multinational corporation Total S.A., to settle Federal Trade Commission charges that Quaker’s proposed $1.4 billion acquisition of Houghton would violate federal antitrust law. According to the complaint, the proposed acquisition would harm competition in the North American market for aluminum hot rolling oil and associated technical support services; and in the North American market for steel cold rolling oils, and associated technical support services. Steel cold rolling oils include sheet cold rolling oil, pickle oil, and tin plate rolling oil. Under the proposed settlement agreement, Quaker must divest Houghton’s North American aluminum hot rolling oil and steel cold rolling oil product lines and related assets to Total. On Sept. 12, 2019, the FTC announced that it has approved a final order in this matter.

In December 2018, officers of a company that marketed and sold Nobetes, a pill they claimed treats diabetes, settled an FTC complaint alleging that the advertising claims for the product are false or unsubstantiated. The order settling the FTC’s complaint prohibits the company and its officers from undertaking future deceptive practices, including making unsubstantiated health claims, misleading consumers about the terms of “free trial” offers, billing consumers without their consent, and other practices related to the use of “expert” endorsements and consumer testimonials. In addition, it requires them to pay money to provide refunds to consumers who bought the product. In August 2019, the FTC returned $60,791 to these consumers.

The FTC is mailing 53,595 refund checks totaling $748,070 to consumers nationwide who signed up for an online auction kit that was supposed to be free, but wasn’t. The kit actually cost consumers up to $59.95 per month if they failed to cancel a trial membership in a business opportunity program called Online Supplier.

Canon Inc. and Toshiba Corporation have agreed to settle Federal Trade Commission charges that the companies violated the premerger notification and waiting period requirements of the Hart-Scott-Rodino Act, or HSR Act, when Canon acquired Toshiba Medical Systems Corporation from Toshiba in 2016.

The FTC issued an administrative complaint (and authorized staff to seek a TRO and PI which have not been filed) challenging the merger of two top suppliers of chloride process titanium dioxide (TiO2), a white pigment used in a wide variety of products including paint, industrial coatings, plastic, and paper. The FTC’s administrative complaint charges that Tronox Limited’s proposed acquisition of competitor Cristal, for $1.67 billion and a 24 percent stake in the combined entity, would violate the antitrust laws by significantly reducing competition in the North American market (comprised of the United States and Canada) for chloride process titanium dioxide. The FTC alleges that the acquisition, if consummated, would increase the risk of coordinated action among the remaining competitors, and increase the risk of future anticompetitive output reductions by Tronox.

Thomas Wells and his payment processing company, Priority Payout Corp. (formerly known as InterBill, Ltd), have agreed to settle FTC charges that they repeatedly violated a 2009 court order issued against them. The settlement permanently bans Wells and Priority Payout Corp, from engaging in, and assisting others with, payment processing, and includes a $1.8 million contempt judgment against them.

The FTC required healthcare companies Fresenius Medical Care AG & KGaA and NxStage Medical, Inc. to divest all rights and assets related to NxStage’s bloodline tubing set business to B. Braun Medical, Inc. as part of a settlement resolving charges that Fresenius’s proposed $2 billion acquisition of NxStage likely would be anticompetitive. The FTC’s complaint alleges that the proposed merger would harm competition in the U.S. market for bloodline tubing sets that are compatible with hemodialysis machines used in clinics that treat chronic renal failure. Bloodline tubing sets are single-use plastic tube sets used during hemodialysis treatments. Fresenius and NxStage are two of only three significant suppliers of bloodline tubing sets used in open architecture hemodialysis machines in the United States. Fresenius and NxStage together control 82 percent of the market for bloodlines.The settlement requires Fresenius and NxStage to divest to B. Braun all assets and rights to research, develop, manufacture, market, and sell NxStage’s bloodline tubing sets.

In October 2018, the FTC announced that online student loan refinancer SoFi Lending Corp. (SoFi) agreed to stop misrepresenting how much money student loan borrowers have saved, or will save, by refinancing their loans with the company. The Commission approved the final consent in February 2019. In its administrative complaint, announced concurrently with the proposed settlement, the FTC alleged that since April 2016 SoFi made prominent false statements about loan refinancing savings in television, print, and Internet advertisements.

Koninklijke Ahold and Delhaize Group, which together own and operate five well-known U.S. supermarket chains, have agreed to sell 81 stores to settle charges that their proposed $28 billion merger would likely be anticompetitive in 46 local markets in Delaware, Maryland, Massachusetts, New York, Pennsylvania, Virginia, and West Virginia. Ahold operated 760 supermarkets under the Stop & Shop, Giant, and Martin’s banners in ten Eastern states and the District of Columbia.Delhaize operated 1,291 supermarkets under the Food Lion and Hannaford banners in 14 Eastern and Southern states. Under the proposed consent agreement, Ahold and Delhaize will divest a total of 81 stores to seven divestiture buyers.