International Monthly: April 2020

 
FTC International Monthly: U.S. Competition, Consumer Protection and Privacy News
 

APRIL 2020

Highlights

coronavirus banner

The FTC is providing a running update of its actions to address the impact of COVID-19.  In the competition area, this includes process changes, such as the implementation of a temporary e-filing system for merger notification, and the issuance, with the Department of Justice, of a Joint Antitrust Statement on COVID-19 (details below).  The agency has also taken action to stop misleading health claims about COVID-19 and other types of scams. FTC Chairman Joe Simons tweeted about the International Competition Network’s statement on competition and COVID-19 and issued a statement on the agency’s continuing efforts to protect consumers during the coronavirus pandemic.

chairman pull quote on COVID-19 scams

Consumers should report coronavirus-related scams here.  Businesses seeking guidance about compliance obligations should contact FTC staff through email at Business.covid@ftc.gov.


Competition

FTC and DOJ Announce Expedited Antitrust Procedure and Guidance for Coronavirus Public Health Efforts

FTC-DOJ COVID-19 statement

The FTC and the U.S. Department of Justice Antitrust Division issued a joint statement detailing an expedited antitrust procedure and providing guidance for collaborations of businesses working to protect the health and safety of Americans during the COVID-19 pandemic.  Under the expedited procedure, the agencies will respond to all COVID-19-related requests, and resolve those addressing public health and safety, within seven calendar days of receiving all information necessary to vet these proposals.

JUUL

FTC Sues to Unwind Altria’s $12.8 Billion Investment in Competitor JUUL

The FTC filed an administrative complaint alleging that Altria Group, Inc. and JUUL Labs, Inc. entered into a series of agreements, including Altria’s acquisition of a 35% stake in JUUL, that eliminated competition in the market for closed-system e-cigarettes in violation of federal antitrust laws.  For several years, Altria and JUUL were competitors in the market, but by the end of 2018, Altria orchestrated its exit from the e-cigarette market and became JUUL’s largest investor.  The FTC alleged that, together, Altria’s acquisition of JUUL shares and the associated agreements constitute an unreasonable restraint of trade.

Danaher

FTC Imposes Conditions on Danaher Corporation’s Acquisition of GE Biopharma

Danaher Corporation agreed to divest assets to settle FTC charges that its proposed $21.4 billion acquisition of General Electric’s biopharmaceutical business, GE Biopharma, would violate federal antitrust law.  The FTC alleges that the proposed acquisition would substantially lessen competition in highly concentrated product markets for ten products that companies use to manufacture biopharmaceutical drugs.  Danaher will divest to the German firm, Sartorius AG, all rights and assets to research, develop, manufacture, market, and sell these ten products.  The Commission vote to issue the complaint and accept the proposed consent order for public comment was 3-2, with Commissioners Rohit Chopra and Rebecca Kelly Slaughter voting no.  Commission staff and the staff of antitrust agencies in Brazil, China, the European Union, and Israel worked cooperatively to analyze the proposed transaction and potential remedies.


ICN logo

International Competition Network Annual Conference Rescheduled for September

As hosts of the International Competition Network’s 2020 Annual Conference, the FTC and the Department of Justice announced that the conference has been rescheduled for September 1-3 to ensure the health and safety of participants.


Consumer Protection and Privacy

FTC Data Shows Jump in Coronavirus-Related Consumer Complaints

COVID-19 complaints

Consumer complaints to the FTC related to COVID-19 have surged in recent weeks.  The FTC has received more than 13,300 coronavirus-related reports from consumers, more than triple what they were about two weeks ago.  The top categories of coronavirus-related fraud complaints include travel and vacation related reports about cancellations and refunds, reports about problems with online shopping, mobile texting scams, and government and business imposter scams.  In fraud complaints that mentioned the coronavirus, consumers reported losing a total of $9.59 million, with a reported median loss of $556.  For a more-detailed infographic, and updated numbers detailing coronavirus-related complaints from consumers, click this link to the FTC’s Explore Data web page.

FTC Warns VoIP Service Providers Against Helping Telemarketers Make Illegal Coronavirus-Related Robocalls; Joins with Federal Communications Commission in Additional Warning Letters to Gateway Providers

COVID-19 scams

FTC staff sent letters to nine Voice over Internet Protocol (VOIP) service providers and other companies warning them that “assisting and facilitating” illegal telemarketing or robocalls related to the coronavirus or COVID-19 pandemic is against the law.  The agency also sent joint letters with the Federal Communications Commission (FCC) to three VOIP service providers, warning them that routing and transmitting illegal robocalls, including coronavirus-related scam calls, is illegal and may lead to federal law enforcement against them.  The joint letters also state that if, after 48 hours, any of the specified gateway or originating providers continue to route or transmit the specified originators’ robocalls on its network, the FCC will authorize other U.S. providers to block all calls coming from that gateway or originating provider and authorize other U.S. providers to take any other steps as needed to prevent further transmission of unlawful calls originating from the originator.  “The FTC will not stand for illegal robocallers that harm the public, particularly in the middle of a health crisis,” said Chairman Joe Simons.  “These warning letters make clear that VoIP providers who help illegal robocallers prey on fears surrounding the Coronavirus are squarely in our sights.”  Separately, the two agencies sent a letter to USTelecom – The Broadband Association, a trade association that represents U.S.-based telecommunications-related businesses, thanking its Industry Traceback Group for identifying and mitigating fraudulent robocalls that are taking advantage of the coronavirus national health crisis.  Lists of the companies receiving the FTC and joint FTC-FCC letters are available in the relevant press releases on the FTC’s coronavirus web page.

Canadian Maker of Smart Locks Settles FTC Allegations That It Deceived Consumers About Its Security Practices

Tapplock

Tapplock, a Canadian company that sells fingerprint-enabled, Internet-connected padlocks, has settled FTC allegations that it deceived consumers by falsely claiming that its Internet-connected smart locks were designed to be “unbreakable” and that it took reasonable steps to secure the data it collected from users.  The firm touted in its advertisements that its smart locks were “Bold. Sturdy. Secure,” according to the FTC’s complaint.  Tapplock also claimed in its privacy policy that it took “reasonable precautions” to secure the personal information (including usernames, email addresses, profile photos, and the precise location of user’s smart locks) it collected through a companion mobile app.  The FTC, however, alleged that contrary to its representations to consumers, the company’s locks were not secure and that Tapplock failed to take reasonable precautions or follow industry best practices to protect the consumer data it collected.

OTA

FTC Obtains Preliminary Injunction Against Investor Training Scheme Online Trading Academy

A federal court has granted the FTC’s request for a preliminary injunction to halt the alleged illegal practices of Online Trading Academy (OTA), a company that allegedly used false or unfounded earnings and related claims to sell investment “training programs” costing as much as $50,000 to elderly consumers, especially those who are retired or nearing retirement age.  The complaint also alleges that OTA has required consumers who have gotten refunds from OTA to sign contracts that limit their ability to speak to law enforcement agencies or post negative reviews about OTA.  Among other things, the preliminary injunction freezes OTA’s assets, appoints a monitor to oversee OTA’s marketing practices, places restrictions on its debt collection activities, and limits how much the three individual defendants can spend to preserve funds for potential redress to consumers.

Privacy Shield

Medical Diagnostic Device Maker Settles Allegations That It Misled Consumers About Its Participation in the EU-U.S. Privacy Shield

Ortho-Clinical Diagnostics, Inc., a provider of medical diagnostic devices and services, has agreed to settle FTC allegations that the company misled consumers about its participation in the EU-U.S. Privacy Shield framework by claiming that it participated in the framework and complied with its requirements, even though the company had allowed its certification to lapse in 2018.  The EU-U.S. Privacy Shield framework establishes a process to allow companies to transfer consumer data from European Union countries to the United States in compliance with EU law.  The Department of Commerce administers the framework, while the FTC enforces the promises companies make when joining the program.


In Other News

Premerger Notification Office Implements Temporary e-Filing System

Due to the COVID-19 pandemic, the FTC, working with the Department of Justice Antitrust Division, is implementing a temporary e-filing system.  During this emergency, all merger filings must be submitted via this system.

FTC Announces September 22 Workshop on Data Portability

The FTC will host a public workshop on September 22 to examine the potential benefits and challenges to consumers and competition raised by data portability.  Data portability gives consumers more control over their data, allowing them to move data from one service to another or to themselves.  Data portability may also promote competition by allowing new entrants to access data they otherwise would not have, enabling the growth of competing platforms and services.  Some of the challenges to implementing data portability include how to treat a consumer’s data that might contain information about others, such as friends’ photos and comments; how to securely transfer data from one service to another; and whether mandating data portability will give companies less incentive to invest in data-driven products and services.

Bureau of Competition Director Pens Blog Post on Antitrust Review at the FTC: Staying the Course During Uncertain Times

Ian Conner COVID-19 blog

The FTC has published a blog post by Bureau of Competition Director Ian Conner on antitrust review in the wake of COVID-19.  Conner highlights that “[t]he manner in which we conduct our investigations has adapted to the constraints of physical distancing, but make no mistake about it: the substance of our work remains the same.”  For Conner’s additional thoughts, click the headline above.

FTC Seeks Comments on Proposed Changes to the Energy Labeling Rule; Extends Comment Deadlines for Endorsement Guides Review and Funeral Rule Review to June

The FTC has approved a Federal Register notice seeking public comments on proposed changes to the agency’s Energy Labeling Rule.  The Commission proposes amending the Rule to require EnergyGuide labels for portable air conditioners and update the energy efficiency descriptors for central air conditioners.  The Commission also seeks comment on the burden of certain labeling requirements under the Rule.  Separately, the agency announced that it is extending by sixty days, from April 21 until June 22, the deadline to submit comments as part of the agency’s review of its Endorsement Guides.  It is also extending by sixty days, from April 14 until June 15, the deadline to submit comments as part of the agency’s review of its Funeral Rule.

FTC Staff Provides Annual Letter to Consumer Financial Protection Bureau on Fair Debt Collection Practices Act Activities

The staff of the FTC has provided the Consumer Financial Protection Bureau (CFPB) with an annual summary of the FTC’s activities enforcing the Fair Debt Collection Practices Act (FDCPA).  The FTC shares enforcement responsibility for the FDCPA with the CFPB, which provides an annual report to Congress about debt collection enforcement activities.  The report highlights both agencies’ efforts to stop unlawful debt collection practices, including through law enforcement, education and public outreach, and policy initiatives.