January 2017 (Supplement)

 U.S. Competition, Consumer Protection and Privacy News



FTC and DOJ Issue Revised Antitrust Guidelines for International Enforcement and Cooperation

International Antitrust Guidelines

The FTC and DOJ issued revised Antitrust Guidelines for International Enforcement and Cooperation. These guidelines update the 1995 Antitrust Enforcement Guidelines for International Operations. They provide guidance to businesses engaged in international activities on questions that concern the agencies’ international enforcement policy, and provide expanded detail on the agencies’ related investigative tools and cooperation with foreign authorities in a new chapter. The revisions describe the current practices and methods of analysis the agencies employ when determining whether to initiate and how to conduct investigations of, or enforcement actions against, conduct with an international dimension. For more details, click here.

FTC and DOJ Issue Updated Antitrust Guidelines for the Licensing of IP

IP Guidelines

The FTC and the DOJ issued updated Antitrust Guidelines for the Licensing of Intellectual Property that explain how the agencies evaluate licensing and related activities involving patents, copyrights, trade secrets, and know-how. This update modernizes the agencies’ 1995 IP Licensing Guidelines, ensuring that they continue to play a fundamental role in the agencies’ analysis of the licensing of intellectual property rights and provide guidance to the public and the business community about the agencies’ enforcement approach to intellectual property licensing. The agencies announced the proposed update of the IP Licensing Guidelines and made it available for public comment in August 2016. As described in the August announcement, the update reflects intervening changes in statutory and case law, as well as relevant enforcement and policy work, including the agencies’ 2010 Horizontal Merger Guidelines.

FTC Charges Qualcomm with Monopolizing Key Semiconductor Device Used in Cell Phones

The FTC filed a complaint in federal district court charging that Qualcomm Inc. violated the FTC Act through anticompetitive conduct aimed at maintaining its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. The complaint alleges that Qualcomm maintains a “no license, no chips” policy under which it will supply its baseband processors only on the condition that cell phone manufacturers agree to Qualcomm’s preferred license terms, that it refuses to license standard-essential patents to competitors despite its prior commitment to do so, and that it extracted exclusivity from Apple in exchange for reduced patent royalties. The FTC alleges that by excluding competitors, Qualcomm impedes innovation that would offer significant consumer benefits, including those that foster the increased interconnectivity of consumer products, vehicles, buildings, and other items commonly referred to as the Internet of Things. For more details on the allegations, click here. The Commission vote to file the complaint was 2-1, with Commissioner Maureen K. Ohlhausen dissenting.

Consumer Protection and Privacy

Western Union Co. Admits Anti-Money Laundering Violations and Settles Charges Related to International Consumer Fraud Schemes, Forfeits $586 Million, Must Establish Comprehensive Anti-Fraud Program

In a case involving international consumer fraud schemes with vast numbers of transactions, Western Union Co. agreed to forfeit $586 million and enter into agreements with the FTC, the Justice Department, and several U.S. Attorneys’ Offices. The company also must establish a comprehensive anti-fraud program. Western Union agreed to settle FTC charges set forth in a complaint filed today in federal district court.

The FTC complaint charges that for many years, scammers around the world have used Western Union’s money transfer system to defraud consumers even though the company has long been aware of the problem, and that some Western Union agents have been complicit in some frauds.

“The agreements we are announcing today,” said FTC Chairwoman Edith Ramirez, “will ensure Western Union changes the way it conducts its business and provides more than a half billion dollars for refunds to consumers who were harmed by the company’s unlawful behavior.” The anti-fraud program Western Union has agreed to implement includes agent training, monitoring to detect and prevent fraud-induced money transfers, due diligence on all new and renewing company agents, and suspension or termination of noncompliant agents. The FTC order prohibits Western Union from transmitting a money transfer that it knows or reasonably should know is fraud-induced, and requires it to block money transfers sent to any person who is the subject of a fraud report. For more details on these actions, click here. The FTC has also published blog posts related to this case for consumers and businesses. For general consumer information on using money transfer services, click here.

FTC Sends Checks to Nearly 350,000 Victims of Herbalife’s Multi-Level Marketing Scheme


The FTC is mailing checks to nearly 350,000 people who lost money running Herbalife businesses. The checks result from a July 2016 settlement that required Herbalife to pay $200 million and fundamentally restructure its business. This is one of the largest redress distributions the agency has made. The FTC also released Redress checks and compliance checks: Lessons from the FTC’s Herbalife and Vemma cases, which provides multi-level marketing compliance guidance. More about the Herbalife redress program and consumer tips on what to look for when joining a multi-level marketing company are available on the FTC website.

FTC Announces Crackdown on Two Massive Illegal Robocall Operations

The FTC announced a crackdown on two massive robocall telemarketing operations that have been blasting robocalls to consumers on the National Do Not Call (DNC) Registry since at least 2012. Many of the defendants in the two cases, FTC v. Justin Ramsey, et al. and FTC v. Aaron Michael Jones, et al., have agreed to court orders that permanently ban them from making robocalls, making any calls to numbers listed on the Do Not Call Registry, violating the Telemarketing Sales Rule, and/or assisting others in doing so. The settling defendants also will pay the Commission a total of more than $500,000. The two ringleaders of the operations have previously been sued by state attorneys general for telemarketing violations, and the FTC’s litigation against them continues. For more details, click here.

FTC Chairwoman Edith Ramirez Issues Statement Following Adoption of the Swiss-U.S. Privacy Shield Framework

FTC Chairwoman Edith Ramirez issued the following statement after the adoption of the Swiss-U.S. Privacy Shield Framework:

“I welcome the adoption of the Swiss-U.S. Privacy Shield Framework. This new Framework strengthens privacy protections for Swiss consumers and, like the EU-U.S. Privacy Shield Framework, facilitates continued transatlantic commerce. The FTC has a robust privacy enforcement program, both domestically and internationally, and we will continue our vigilant approach to enforcement of the new Framework.”

In Other News

FTC Chairwoman Edith Ramirez Announces Resignation

FTC Chairwoman Edith Ramirez announced her resignation, effective February 10. Ramirez became Chairwoman on March 4, 2013, and has served as an FTC Commissioner since April 5, 2010. Under her leadership, the FTC brought nearly 400 consumer protection law enforcement actions and approximately 100 enforcement actions challenging anticompetitive mergers and business conduct. These law enforcement actions secured billions of dollars in redress for harmed consumers, and stopped anticompetitive corporate mergers that would have caused price increases, compromised quality, or hurt innovation. For more details on her tenure, click here.

FTC’s 2016 Privacy and Security Update Now Available

FTC staff has again assembled an update of the agency’s privacy and security initiatives during the past year. The 2016 Privacy & Data Security Update includes summaries of the FTC’s key cases, workshops, reports and education projects, and describes the FTC’s role in these areas. Areas covered include general privacy matters, spam, data security, financial privacy and credit reporting, children’s privacy, do-not-call, and the FTC’s international activities. An 18-page pdf version of the update is available on the FTC’s website.

FTC to Host March 9 FinTech Forum on Artificial Intelligence and Blockchain

The FTC will host its third FinTech Forum on March 9, focusing on the consumer implications of artificial intelligence and blockchain. Artificial intelligence focuses on the capability for machines to mimic human thinking and may be used is to provide personalized financial services for consumers. Blockchain technology involves a distributed digital ledger for recording transactions that can be shared widely. It first emerged as the foundation for digital currency, and it is now being explored for other consumer-focused uses, including payment systems and “smart contracts.” For more details on the half-day event, click here.

FTC Publishes Inflation-Adjusted Civil Penalty Amounts

As required by law, the FTC has adjusted the maximum civil penalty dollar amounts for violations of 16 laws the FTC enforces. The new maximum civil penalty amounts are effective on publication in the Federal Register. The maximum civil penalty amount has increased from $40,000 to $40,654 for violations of Sections 5(l) and 5(m)(1)(A) and (B) of the FTC Act, Section 7A(g)(l) of the Clayton Act and Section 525(b) of the Energy Policy and Conservation Act. The maximum civil penalty amount has increased from $1,138,330 to $1,156,953 for violations of Section 814(a) of the Energy Independence and Security Act of 2007. The maximum civil penalty amounts for other law violations are in the Federal Register notice here.