International Monthly: April 2016

 
 U.S. Competition, Consumer Protection and Privacy News
 

APRIL 2016

Highlights

FTC Chairwoman Ramirez Releases Annual Highlights

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for 2015

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FTC Chairwoman Edith Ramirez released the FTC’s 2015 Annual Highlights, featuring some of the agency’s key accomplishments over the past calendar year. The agency’s Enforcement Highlights address the Commission’s notable legal actions in a broad array of important industries, including health care, technology, and other consumer products and services. As noted in the Policy Highlights, the Commission conducted a variety of workshops, with many focused on new and rapidly changing markets or technologies.

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Internationally, the FTC continued efforts to further strengthen mutual enforcement cooperation and sound policy with foreign partners. Finally, the FTC’s Education and Outreach Highlights describe the agency’s work to alert businesses to compliance standards and consumers to the telltale signs of fraud and deceptive business practices. Statistics are available in the Stats & Data 2015 infographic. Archives of past FTC Annual Highlights and Reports are available online.

Competition

FTC Sues Endo for Allegedly Entering into Pay-for-Delay Settlements

The FTC filed a complaint in federal district court alleging that Endo paid Impax Laboratories, Inc. and Watson Laboratories, Inc. to eliminate the risk of competition for Opana ER and Lidoderm. Following more than a decade of FTC challenges to pay-for-delay settlements, this action is the first FTC case challenging an agreement not to market an authorized generic – often called a “no-AG commitment” – as a form of reverse payment. With the complaint, the Commission filed a stipulated order for permanent injunction against Endo’s partners, Teikoku Seiyaku Co., Ltd. and Teikoku Pharma USA, Inc., settling charges with those two defendants. Under the stipulated order, the Teikoku entities are prohibited from engaging in certain types of reverse-payment agreements, including settlements containing no-AG commitments like those alleged in the complaint, for 20 years. The Commission vote to file the complaint was 3-1, with Commissioner Ohlhausen voting no and issuing a dissenting statement. The Commission vote to accept the Teikoku settlement was 4-0.

FTC Amicus Brief Urges Appeals Court To Correct Legal Errors in District Court’s Antitrust Analysis of Reverse-Payment Agreement

The FTC filed an amicus brief with the U.S. Court of Appeals for the Third Circuit urging the court to correct multiple legal errors in a district court’s antitrust analysis of an alleged reverse-payment agreement involving GlaxoSmithKline and generic pharmaceutical companies Teva Pharmaceuticals and Anchen Pharmaceuticals. According to the brief, the district court erroneously: (i) concluded that a reverse-payment settlement, in which the brand-name drugmaker paid the generic drugmaker not to enter during the pendency of the underlying patent litigation, was not subject to the rule-of-reason analysis prescribed by the Supreme Court in FTC v. Actavis; (ii) required plaintiffs to show actual delayed entry or injury to a specific party to establish an antitrust violation; (iii) failed to require defendants to prove that the reverse payment promoted the claimed procompetitive benefits of settlement; and (iv) found the reverse payment settlement agreement lawful, including on grounds that the parties included a provision that would allow them to abandon the deal if the FTC objected.

Supreme Court Declines To Review Appeals Court Decision, Letting Stand FTC Order in McWane Inc. v. FTC

The Supreme Court declined to review an April 2015 decision of the Eleventh Circuit, letting stand a Commission cease and desist order against McWane Inc. for unlawfully maintaining its monopoly in the market for domestically manufactured ductile iron pipe fittings. The FTC order held that McWane unlawfully maintained its monopoly by preventing its distributors from buying domestic pipe fittings from competitor Star Pipe Products Ltd., which was attempting to enter the domestic market. The policy foreclosed Star Pipe from achieving the sales necessary to compete effectively.

FTC Chairwoman Ramirez Testifies Before Senate Judiciary Subcommittee

Testifying on behalf of the FTC before the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Chairwoman Ramirez described the FTC’s current competition enforcement activities and priorities and outlined how effective antitrust enforcement benefits both consumers and businesses by preventing mergers and business conduct that could lead to higher prices, lower quality products and services, and less innovation.

FTC Staff Comments on Proposed Legislation in Alaska, Kentucky, and West Virginia

FTC staff submitted a comment regarding proposed legislation that would allow licensed Alaska physicians located out of state to provide telehealth services in the same manner as in-state physicians. The comment noted that eliminating the in-state requirement appeared to be a procompetitive improvement in the law. The change likely would expand the supply of telehealth providers, promote competition, and increase access to safe and cost-effective care.

FTC staff also submitted a comment on the competitive implications of proposed legislation that would license and regulate denturists in Kentucky. The comment recommended that the legislature consider the potential benefits of enhanced competition among oral health care professionals, such as improved access to care, more cost-effective treatment, and the development of more effective care delivery models that may offer greater choice to health care consumers. The comment encouraged the legislature to “maintain only those scope of practice limitations necessary to ensure patient health and safety.”

In West Virginia, FTC staff submitted a comment on the competitive impact of provisions in proposed legislation that would provide for “cooperative agreements” between health care providers, and provisions purporting to confer “exemptions” from federal antitrust laws on certain health care providers. According to the comment, the bill incorrectly assumed that the antitrust laws prohibit efficient health care mergers, acquisitions, and collaborations. Given that federal and state antitrust laws already permit cooperative agreements that are likely to benefit consumers, the purported antitrust exemption would have no procompetitive application. FTC staff expressed concern “that this legislation is likely to foster mergers and conduct that are anticompetitive, inconsistent with federal antitrust law and policy, and liable to cause serious harm to West Virginia health care consumers.”

Consumer Protection and Privacy

FTC Charges Volkswagen Deceived Consumers with Its “Clean Diesel” Campaign

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The FTC alleges that during a seven-year period, Volkswagen Group of America, Inc. deceived consumers by selling or leasing more than 550,000 diesel cars based on false claims that the cars were low-emission, environmentally friendly, met emissions standards, and would maintain a high resale value. In a complaint filed in federal court, the FTC charged that Volkswagen deceived consumers with the advertising campaign it used to promote its supposedly “clean diesel” VWs and Audis. Volkswagen fitted the vehicles with illegal emission defeat devices designed to mask high emissions during government tests. The FTC is seeking an order requiring Volkswagen to compensate American consumers who bought or leased an affected vehicle between late 2008 and late 2015, and an order to prevent Volkswagen from engaging in such conduct again.

FTC Signs Memorandum of Understanding with Canadian Radio-television and Telecommunications Commission (CRTC) on Do Not Call, Spam Enforcement

CRTC MOU

The FTC signed a memorandum of understanding with the Canadian Radio-television and Telecommunications Commission (CRTC) to strengthen cross-border cooperation on Do Not Call and anti-spam enforcement matters. The MOU was signed by FTC Chairwoman Edith Ramirez and Jean-Pierre Blais, Chairman of the CRTC. The CRTC enforces the Canadian Anti-Spam Law, which became effective in 2014, while the FTC enforces the FTC Act and the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act).

FTC Announces Second PrivacyCon and Fall Series on Emerging Technology Issues

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The FTC announced the second PrivacyCon event to take place Jan. 12, 2017, along with a call for research presentations. PrivacyCon is designed to continue collaboration among leading whitehat researchers, academics, industry representatives, consumer advocates, and the government to address the privacy and security implications of emerging technologies. The first PrivacyCon, held in January 2016, had more than 300 participants in person, more than 1,500 online, and featured 19 research presentations from around the United States and the world. Submissions for PrivacyCon are requested by Oct. 3. This fall, the FTC also will host a series of half-day seminars to examine three new and evolving technologies that raise critical consumer protection issues: ransomware, drones, and smart TV. For more details and a schedule, click here.

FTC Releases New Guidance for Developers of Mobile Health Apps

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The FTC created a new web-based tool to help developers of health-related mobile apps understand which federal laws and regulations might apply to their apps. The FTC developed the tool in conjunction with the Department of Health and Human Services. Based on a developer’s answers to questions about the nature of an app, including function, data collected, and services provided to users, the guidance will point the developer toward detailed information about certain federal laws that might apply to the app.

FTC Releases Spanish-Language Video on Imposter Scams

The FTC released a new Spanish-language video about imposter scams. The video features a first-person account by a Latina harassed by scammers impersonating court officials and lawyers, who tried to coerce her into paying hundreds of dollars for a debt she didn’t owe. The FTC’s videos are available at ftc.gov/EveryCommunity.

In Other News

FTC Chief Technologist: “Time To Rethink Mandatory Password Changes”

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FTC Chief Technologist Lorrie Cranor blogs that it is time to rethink mandatory password changes. She writes, “When people hear that I conduct research on making passwords more usable and secure, everyone has a story to tell and questions to ask. People complain about having so many passwords to remember and having to change them all so frequently. . . . But my favorite question about passwords is: ‘How often should people change their passwords?’ My answer usually surprises the audience: ‘Not as often as you might think.’” For more, click here.

FTC Welcomes Revised OECD Guidelines for E-commerce

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The FTC welcomed the issuance by the Organization for Economic Cooperation and Development (OECD) of new, revised guidelines for protecting consumers in e-commerce. The revised guidelines, which update earlier guidance from 1999, address the newest developments in e-commerce, such as services that are exchanged for consumer data, mobile transactions and payments, and new platforms that enable consumer-to-consumer transactions. The FTC represents the U.S. in the OECD’s Committee on Consumer Policy, which led the e-commerce guidelines revision process.

Global Privacy Enforcement Network (GPEN) Issues Annual Report Highlighting Expansion

GPEN has issued an annual report, highlighting its expansion from 13 to 59 agencies since 2010. The network promotes cross-border cooperation in data protection and privacy. Key GPEN activities from 2015 included: a sweep by 29 agencies of websites and apps targeted at or popular with children, which examined the privacy practices of approximately 1,500 apps and websites; and the introduction of a new information sharing system, dubbed GPEN Alert, to better coordinate international efforts in protecting privacy.

FTC Commissioner Julie Brill Departs

Julie Brill, who served as a Commissioner of the Federal Trade Commission since April 2010, resigned her position effective March 31. A Democrat, Brill was appointed by President Obama and sworn in on April 6, 2010. Prior to joining the FTC, Commissioner Brill was the Senior Deputy Attorney General and Chief of Consumer Protection and Antitrust for the North Carolina Department of Justice. Before that, she served as an Assistant Attorney General for Consumer Protection and Antitrust for the State of Vermont for over 20 years.