International Monthly: August 2017

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

AUGUST 2017

Consumer Protection and Privacy

FTC Charges Online Marketing Scheme with Deceiving Shoppers

negative option

The FTC has charged an expensive online negative option subscription scam with deceiving consumers, who reasonably believed they had agreed to a single shipment of tooth whiteners or other products for a nominal fee. Instead, they were charged about $200 a month for unauthorized subscriptions. Defendants drove people to their websites through affiliate networks, including fake reward offers for completing phony surveys supposedly for well-known merchants. For a related blog post, click here.

FTC Escalates the Fight Against Illegal Robocalls Using Consumer Complaints to Aid Industry Call-Blocking Solutions

Every day American consumers report tens of thousands of illegal robocalls to the FTC. Under a new initiative announced by the FTC, when consumers report Do Not Call or robocall violations to the agency, the robocaller phone numbers consumers provide will be released each day to telecommunications carriers and other industry partners that are implementing call-blocking solutions. Unwanted and illegal robocalls are the FTC’s number-one complaint category, with more than 1.9 million complaints filed in the first five months of 2017 alone. By reporting illegal robocalls, consumers help law enforcement efforts to stop the violators behind these calls. In addition, under the initiative announced today, the FTC is now taking steps to provide more data, more often to help power the industry solutions that block illegal calls.

FTC Approves Modifications to TRUSTe’s COPPA Safe Harbor Program

The FTC has approved TRUSTe’s proposed modifications to its safe harbor program under the Children’s Online Privacy Protection Rule. The FTC’s COPPA Rule requires, among other things, that operators of commercial websites and online services directed to children under the age of 13 post comprehensive privacy policies on their sites, notify parents about their information practices, and obtain parental consent before collecting, using, or disclosing any personal information from children under the age of 13. It includes a “safe harbor” provision that allows industry groups and others to seek Commission approval of self-regulatory guidelines that implement “the same or greater protections for children” as those contained in the COPPA Rule. The approved changes to TRUSTe’s existing safe harbor program include a new requirement that participants conduct an annual internal assessment of third-parties’ collection of personal information from children on their websites or online services.


Competition

FTC Holds First Economic Liberty Public Roundtable

economic liberty roundtable

The FTC’s Economic Liberty Task Force hosted a roundtable to examine ways to mitigate the effects of state-based occupational licensing requirements that make it difficult for license holders to obtain licenses in other states. License portability restrictions often prevent otherwise qualified people from marketing their services across state lines or when they move to a new state. The roundtable explored options for enhancing the portability of occupational licenses by bringing together various legal experts, representatives of professional organizations, and officials who have worked on the issue at the state level. A webcast of the roundtable is available here.

FTC Conditionally Clears Baxter’s Injectable Drugs Business Acquisition

Baxter International Inc. and Claris Lifesciences Limited agreed to divest two types of pharmaceutical products to pharmaceutical company Renaissance Lakewood LLC in connection with Baxter’s proposed $625 million acquisition of Claris’s injectable drugs business. The divestiture settles FTC charges that, as proposed, the acquisition would have reduced the number of significant suppliers for fluconazole in saline intravenous bags and intravenous milrinone from four to three and was likely to harm consumers through higher drug prices. If the Commission determines that Renaissance is not an acceptable acquirer, or that the divestiture is not carried out in an acceptable way, the parties are required to unwind the sale of rights to Renaissance and divest the products to a Commission-approved acquirer within six months of the date the order becomes final.

FTC Testifies Before House Judiciary Committee on Regulatory Abuse in the Pharmaceutical Sector

Testifying before the House of Representatives Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Acting Director of the Bureau of Competition, Markus H. Meier described the FTC’s efforts to stop anticompetitive conduct in the pharmaceutical industry. Meier noted that the 1984 Hatch-Waxman Act established a carefully balanced framework to facilitate introduction of lower-cost generic drugs in the marketplace while preserving incentives for innovation. However, some drug manufacturers have exploited certain features of the Act, with the result that their exclusive rights over branded drugs have extended well beyond the periods Congress provided to spur investments in innovation. The testimony examined the Commission’s numerous antitrust enforcement actions involving both branded and generic to halt such anticompetitive conduct. Meier also identified the problem of branded firms using so-called Risk Evaluation and Mitigation Strategies (REMS) programs to impede generic entry, and similar concerns about the potential for branded firms to frustrate entry of competitors in the emerging biosimilar market place, suggesting that this was an appropriate area for Congressional focus and concern, including through the CREATES Act.


In Other News

Acting Chairman Ohlhausen Releases Summary of FTC Six-Month Accomplishments

FTC Acting Chairman Maureen K. Ohlhausen released a summary of the agency’s major accomplishments since President Trump named her to the position in January. Click here for more details on FTC efforts regarding economic liberty, regulatory reform and agency streamlining, a new small business website, lessons for business on data security, privacy, consumer protection enforcement, and competition enforcement.

FTC Engage Connect Protect Initiative Promotes Data Security for Small Businesses

small business

The FTC is hosting small business owners in a series of public roundtables across the United States to discuss protecting the security of their computers and networks. The roundtables are part of an ongoing initiative by Acting FTC Chairman Maureen K. Ohlhausen aimed at helping small businesses, which included the launch of a new website in May focused on helping small business owners avoid scams and protect their computers and networks from cyberattacks. The roundtables will bring together FTC staff along with the Small Business Administration and other federal partners, industry associations, and the small business community. The comments and feedback generated by the roundtables will be used to help the FTC and its partners provide additional education and guidance for small business owners on cybersecurity issues.

FTC Announces Winner of Its Internet of Things Home Device Security Contest

IOT

The FTC announced that a mobile app developed by a New Hampshire software developer was awarded the top prize in the agency’s competition seeking tools to help consumers protect the security of their Internet of Things (IoT) devices. With the assistance of five judges, the FTC awarded Steve Castle the $25,000 top prize for his proposal for a mobile app, “IoT Watchdog.” The mobile app he proposed would enable users with limited technical expertise to scan their home Wi-Fi and Bluetooth networks to identify and inventory connected devices. It would flag devices with out-of-date software and other common vulnerabilities and provide instructions on how to update each device’s software and fix other vulnerabilities. The FTC also awarded an honorable mention to a team that proposed an alternative method of securing home networks from vulnerable IoT devices. The Internet of Things, an array of billions of everyday objects sending and receiving data over the Internet, is expanding rapidly with the adoption of applications such as health and fitness monitors, home security devices, connected cars, and household appliances.

FTC Acting Chairman Ohlhausen Selects Acting Leadership for Bureaus of Competition and Economics and Acting Chief Technologist

FTC Acting Chairman Maureen K. Ohlhausen announced that she has selected Acting Directors of the Bureaus of Competition and Economics. D. Bruce Hoffman, a partner at the law firm of Shearman & Sterling LLP, has been named Acting Director of the FTC’s Bureau of Competition. Hoffman will replace Acting Bureau of Competition Director Markus Meier, who will return to leading the Bureau’s Health Care Division. Michael Vita has been named Acting Director of the Bureau of Economics, replacing Ginger Zhe Jin, who is departing the agency to return to the University of Maryland. Neil Alan Chilson has been named Acting Chief Technologist.