International Monthly: December 2018

 
 U.S. Competition, Consumer Protection and Privacy News
 

DECEMBER 2018

Highlights

FTC Hearings Turn to Issues of Common Ownership, Data Security, and Consumer Privacy

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The FTC will continue its hearings on Competition and Consumer Protection in the 21st Century with sessions on consumer privacy on February 12 and 13 at the FTC’s Constitution Center in Washington, DC. Interested parties may file pre-hearing comments electronically until December 21, and the Commission will additionally consider any comments it receives electronically until March 13. The Commission will announce more hearings in the New Year. Click on the headline above for videos, transcripts, and other materials.

Competition

FTC Charges Executive with Violations of U.S. Premerger Notification Requirements

James L. Dolan, Executive Chairman of Madison Square Garden Company, has agreed to pay more than $600,000 in civil penalties to resolve FTC allegations that he violated the Hart-Scott-Rodino Act by failing to report in a timely manner his acquisition of additional voting securities in Madison Square Garden Company. According to the complaint that the FTC referred to the Department of Justice, Dolan violated the HSR Act by failing to file a notification of this acquisition when his holdings crossed the relevant filing threshold. The complaint further alleges that this was not Dolan’s first HSR Act filing violation.

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FTC issues Report on Ethanol Market Concentration

The Energy Policy Act of 2005 directs the FTC to perform an annual review of market concentration in the ethanol production industry “to determine whether there is sufficient competition among industry participants to avoid price-setting and other anticompetitive behavior.” As in prior years, the 2018 Report concludes that “the low level of concentration and large number of market participants in the U.S. ethanol production industry continue to suggest that the exercise of market power to set prices, or coordinate on price or output levels, is unlikely.”

Consumer Protection and Privacy

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PR Firm and Publisher Settle FTC Allegations They Misrepresented Product Endorsements as Independent Opinions, and Commercial Advertising as Editorial Content

Two companies and their principals have agreed to settle FTC allegations arising from a media campaign during the 2016 Zika virus outbreak and Summer Olympics in Brazil that promoted an insect repellent. According the complaint, respondents misrepresented that paid endorsements by Olympic gold medalists were independent consumer opinions and commercial advertising in Inside Gymnastics magazine was independent journalistic content. The agency also alleged that one of the companies reimbursed employees and “friends” for buying and reviewing the product on Walmart.com. The proposed Commission orders prohibit respondents from making such misrepresentations and require them to disclose material connections with, and otherwise monitor, any endorsers they engage.

Court Halts International Internet Marketing Operation

In response to the FTC’s motion, a U.S. district court issued an order temporarily halting an alleged Internet marketing scam. The Commission alleges the defendants marketed supposedly “free trial” offers for personal care products and dietary supplements online, but then charged consumers the full price of the products and enrolled them in negative option continuity plans without their consent. Apex Capital Group and related individual defendants also allegedly set up shell companies in the United States and the United Kingdom as fronts to open merchant accounts and process millions of dollars in consumer payments, avoiding detection by the credit card networks and law enforcement. Consumers trying to cancel the unwanted plans found it difficult to do so, and the defendants continued to charge some consumers even after supposedly cancelling their plans.

In Other News

International Fellows

FTC International Fellows Program Is Now Accepting Nominations for February and September 2019 Classes

Four FTC International Fellows from the European Commission, Japan, and Switzerland are completing months-long placements in the Bureaus of Competition and Economics and Office of International Affairs. Since the program’s inception in 2007 under the staff exchange provision of the U.S. SAFE WEB Act, 116 international colleagues from 38 jurisdictions have had an opportunity to work with FTC attorneys, economists, and investigators, gaining first-hand experience of how the FTC carries out its competition, consumer protection, and privacy enforcement and policy work. This includes 81 International Fellows and 35 SAFE WEB Interns, who stay for a shorter time. The Commission is now accepting nominations from counterpart agencies for classes beginning on February 19 and September 3.

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FTC Testifies before Senate Commerce Subcommittee

On behalf of the FTC, Chairman Simons and Commissioners Phillips, Chopra, Slaughter, and Wilson testified before the Senate Commerce Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security regarding the agency’s work to protect U.S. consumers and promote competition during fiscal year 2018. The FTC detailed enforcement actions that led to more than $1.6 billion in refunds to consumers, with orders that prohibit defendants from engaging in further illegal activity, impose data security and other compliance obligations and, in some cases, ban defendants from engaging in certain conduct. The testimony also detailed the FTC’s work to preserve and promote competition in many sectors of the economy that directly affect consumers, such as health care, consumer products and services, technology, manufacturing, and energy. The testimony detailed the FTC’s significant international work, much of which relies on the expiring U.S. SAFE WEB Act, which the Commission urged Congress to reauthorize.

Latest Consumer Protection Data Spotlight Finds Seniors Sending Thousands in Cash to Scammers Claiming to be their Grandchildren

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The FTC is seeing an increase in the number of people ages 70 and over who say they sent cash in response to scammers claiming to be a loved one in trouble. The median cash amount sent by people 70+ to family or friend impostors in 2018 was $9000. In about half of these types of complaints, the scammer said they were in jail or some other legal trouble and in need of money to get out of trouble. All age groups reported losing more money over the last 12 months to family and friend imposter scams – a total of $41 million, compared to $26 million the previous year.

FTC Proposes Amendments to Improve Usability of the Energy Labeling Rule

The FTC has approved a Federal Register notice seeking comments on proposed non-substantive changes to the Energy Labeling Rule. Among other things, the proposed amendments would organize the Rule’s product descriptions to make it easier for stakeholders to identify relevant covered products, particularly for categories (such as lighting) that contain several different product types, and exemptions. The proposed amendments also would remove obsolete references to products last produced and sold decades ago. The Commission vote was 4-1, with Commissioner Christine S. Wilson issuing a dissenting statement.