Legal Library: Cases and Proceedings

The FTC imposed strict limits on JAB Consumer Partners’ future acquisitions of specialty and emergency veterinary clinics as a condition of JAB’s proposed $1.65 billion acquisition of VIPW, LLC, the parent of Ethos, an owner and operator of specialty and emergency veterinary clinics. The Commission alleged that the acquisition was likely to be anticompetitive in four geographic markets, ordering divestitures for various types of veterinary care in and around Richmond, Virginia, in and around the Washington DC Metro Area, particularly for customers to the southeast in Virginia and Maryland, in and around Denver, Colorado, and in and around downtown San Francisco, California. The Commission finalized the order in October 2022.

The Federal Trade Commission authorized a lawsuit in federal court to block 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, including Beat Saber, reportedly one of the best-selling VR apps of all time, which it markets for fitness use. The agency alleges that Meta’s proposed acquisition of Within would stifle competition and dampen innovation in the dynamic, rapidly growing U.S. markets for fitness and dedicated-fitness VR apps. A federal court complaint and request for preliminary relief was filed in U.S. District Court for the Northern District of California to halt the transaction.

Restaurant chain owner and investment fund operator Biglari Holdings Inc. will pay a $1.4 million civil penalty to settle charges that two acquisitions it made on March 26, 2020 of shares of restaurant operator Cracker Barrel Old Country Store, Inc. violated the Hart-Scott-Rodino Act. According to the complaint, these two acquisitions, together with Biglari’s prior holdings of Cracker Barrel, caused it to exceed an HSR filing threshold, triggering its obligation to file an HSR Form and wait before completing the acquisition. Failing to do so violated the HSR Act.

The Federal Trade Commission filed suit against the operators of the online store Glowyy for failing to deliver on promises that they could quickly ship products like face masks, sanitizer, and other personal protective equipment (PPE) related to the coronavirus pandemic.

The lawsuit alleges that the company violated the FTC’s Mail, Internet and Telephone Order Rule (Mail Order Rule), which requires that companies notify consumers of shipping delays in a timely manner and give consumers the chance to cancel orders and receive prompt refunds.

In January 2022, New York City-based Vision Path, Inc., the online seller of direct-to-consumer Hubble lenses, agreed pay penalties and redress totaling $3.5 million to settle FTC charges that it violated the Contact Lens Rule in several ways, including by failing to obtain prescriptions and to properly verify prescription information, and by substituting Hubble lenses for those actually prescribed to consumers. The FTC also alleged the company violated the FTC Act when it failed to disclose that many reviews of Hubble lenses were not by unbiased consumers but were written by reviewers who were compensated for their reviews, and, in at least one instance, by one of its own executives.

The Federal Trade Commission is returning more than $10 million to consumers who were charged undisclosed fees by online lender LendingClub Corporation. The FTC is distributing refunds directly to more than 15,000 LendingClub customers and encouraging additional LendingClub customers to apply for refunds.

The FTC sued LendingClub in April 2018, charging that the company falsely promised loan applicants that they would receive a specific loan amount with “no hidden fees,” when in reality the company deducted hundreds or even thousands of dollars in hidden up-front fees from the loans. The FTC also alleged that LendingClub told consumers they were approved for loans when they were not and took money from consumers’ bank accounts without authorization.

The Federal Trade Commission is sending payments totaling more than $9.7 million to 61,990 consumers who were charged hidden fees by LendingClub Corporation.

These payments are the result of a claims process conducted by the FTC in February 2022. It is the second distribution of funds in this matter and brings the total amount refunded to consumers to more than $17.6 million.

The Federal Trade Commission required ARKO Corp. and its subsidiary GPM to roll back anticompetitive provisions of their acquisition of 60 Express Stop retail fuel outlets from Corrigan Oil Company last year. The complaint alleged that as originally proposed, the agreement not to compete that ARKO and GPM required Corrigan to sign as part of the acquisition harmed customers in local retail gasoline and retail diesel fuel markets throughout Michigan and Ohio. The order required them to amend a non-compete agreement they imposed on Corrigan, agree to obtain prior approval from the Commission before acquiring retail fuel assets under certain circumstances, and return to Corrigan five retail fuel outlets, among other provisions.  On Aug. 9, 2022, the Commission announced the final consent agreement in this matter.

The Federal Trade Commission required energy pipeline and storage companies Buckeye Partners, L.P. and Magellan Midstream Partners, L.P. to divest to U.S. Venture, Inc. petroleum terminals in the two states as a condition of Buckeye’s $435 million proposed acquisition of 26 Magellan terminals. The complaint alleged that without a remedy, the acquisition would harm competition for terminaling services both for all LPPs, and for gasoline specifically, in North Augusta, South Carolina; Spartanburg, South Carolina; and Montgomery, Alabama. The complaint alleged that in all three geographic markets, the acquisition would eliminate the close competition between Buckeye and Magellan, increase the likelihood of collusive or coordinated interaction between the remaining competitors, reduce the number of terminaling options for third-party customers, and increase prices for terminaling services. On Aug. 9, 2022, the Commission announced the final consent agreement in this matter.

The Federal Trade Commission imposed strict limits on JAB Consumer Partners’ future acquisitions of specialty and emergency veterinary clinics as a condition of JAB’s proposed $1.1 billion acquisition of specialty and emergency veterinary services provider SAGE Veterinary Partners, LLC. The Commission also alleged that the acquisition was likely to be anticompetitive in three geographic markets, ordering divestitures for various types of veterinary care in and around Austin, Texas, in and around San Francisco, California, and in and between Oakland, Berkeley, and Concord, California, and it ordered divestitures in these market.  On Aug. 5, 2022, the Commission announced the final consent agreement in this matter.

In March 2022, the FTC announced that two Texas-based companies and their owner are banned from advertising or selling dietary supplements, and from making claims that their products treat, cure, or reduce the risk of disease, under a proposed settlement with the Federal Trade Commission. The agency announced final approval of the order in June 2022.

In September 2019, the operators of a deceptive negative option scheme agreed to a court-ordered preliminary injunction temporarily barring them from a wide range of conduct.  The preliminary injunction stops the defendants from misleading consumers about supposedly “free trial” offers, enrolling them in unwanted continuity plans, billing them without their authorization, and making it nearly impossible for them to cancel or get their money back. In June 2022, the Commission announced it was returning $5.4 million to defrauded consumers.