International Monthly: January/February 2019

 U.S. Competition, Consumer Protection and Privacy News



FTC Announces Hearings on International Engagement To Be Held in March

Hearings banner

In March, the FTC’s hearings on competition and consumer protection will turn to the agency’s international work. The hearing, “The FTC’s Role in a Changing World,” will take place at FTC Headquarters in Washington, D.C. on March 25-26. The hearing will explore the FTC’s international role in light of globalization, technological change, and the increasing number of competition, consumer protection, and privacy laws and enforcement agencies around the world. Speakers will address the implications of international developments on the FTC’s work on behalf of American consumers. At the hearing, the FTC will consider: the effectiveness of its enforcement cooperation tools and approaches in light of new challenges in competition, consumer protection, and privacy matters; approaches to promoting international policy coordination and best practice development; and strategies for international enforcement and policy engagement given today’s dynamic global marketplace. The agency seeks public comment on the questions posted in the press release. Comments may be submitted online and are due May 24. Information will be posted here about livestreaming of this event. Click here for information about additional hearing sessions, including sessions rescheduled due to the recent lapse in government funding.

Consumer Protection and Privacy

redress report

FTC Enforcement Actions Yield More than $2.3 Billion in Refunds to Consumers between July 1, 2017 and June 30, 2018

According to the 2018 Annual Report on Refunds to Consumers issued by the FTC’s Office of Claims and Refunds, the agency’s law enforcement actions yielded more than $2.3 billion in refunds to defrauded consumers, including $122 million mailed directly by the FTC to 2.2 million people. The total amount returned to consumers, which includes refunds distributed by defendants as a result of FTC actions against them, was almost eight times more than the Commission’s entire budget for fiscal year 2018. During the period covered by the report, the FTC mailed checks in more than 38 cases. The $2.3 billion reported in this year’s report includes refunds from the landmark settlement with Volkswagen that required the company to offer a buyback program for owners of VW and Audi diesel cars fitted with illegal emissions defeat devices.

FTC Obtains Order Barring U.S. and Canadian Scammers from Marketing Internet-related Services and Misrepresenting Their Relationship with Consumers

At the FTC’s request, a U.S. district court has permanently banned nine related Canadian and U.S. defendants from marketing or selling Internet directory listings, search engine optimization services, or website design and hosting services, and ordered them to pay more than $4.6 million for tricking small businesses into paying for services they never ordered. The FTC announced the case against the Premium Business Pages defendants in June 2018. The order also prohibits the defendants from misrepresenting that they have a preexisting relationship with consumers, that consumers have ordered their services, or that consumers owe money to the defendants.

FTC and FDA Send Warning Letters to Companies Selling Dietary Supplements Claiming to Treat Alzheimer’s and Other Diseases

FTC/FDA warning letters

The FTC has joined the U.S. Food and Drug Administration (FDA) in sending three warning letters to companies it believes may be violating the FTC Act by making false or unsubstantiated health claims. Specifically, the FTC and FDA are warning about advertisements claiming to treat Alzheimer’s and remediate or cure other serious illnesses including Parkinson’s, heart disease, and cancer.

FTC Stops Phantom Debt Collection Scheme

At the FTC’s request, a federal court has temporarily halted a debt collection scheme that allegedly bilked consumers out of millions of dollars, using deceptive and threatening tactics to collect debts that they did not owe. The court also temporarily froze the defendants’ assets. According to the FTC’s complaint, defendants falsely claimed to be attorneys or affiliated with attorneys to pressure consumers into making payments, and threatened to take legal action against consumers if they did not pay. One of the companies behind the operation is a debt broker that allegedly bought, sold, and placed fake debt portfolios that it obtained from a former payday loan generator even after consumers said they did not recognize the debt or had already paid it.



ALJ Upholds FTC’s Complaint Challenging Titanium Dioxide Merger

In an Initial Decision, Chief Administrative Law Judge D. Michael Chappell upheld allegations in an FTC complaint challenging the merger of Tronox Limited and Cristal, two top suppliers of chloride process titanium dioxide (“TiO2”), a white pigment used in a wide variety of products, including paint, industrial coatings, plastic, and paper. The decision held that the evidence proved that the planned acquisition may substantially lessen competition in the relevant market for the sale of chloride TiO2 in North America. It concluded that the planned acquisition would create a highly concentrated market and increase the likelihood of coordinated conduct among the remaining firms. Judge Chappell ordered the parties to terminate the proposed acquisition agreement.

Staples Establishes Firewall as Condition of Acquisition of Essendant


Office supply distributors Staples Inc. and Essendant Inc. agreed to establish a firewall separating Staples’ business-to-business sales operations from Essendant’s wholesale business to resolve FTC concerns that the companies’ proposed $482.7 million merger may harm competition in the market for office supply products sold to small- and mid-sized businesses. According to the FTC complaint, Staples competes with Essendant-sourced independent dealers and, as a result of the merger, Staples would have access to commercially-sensitive business information on Essendant’s customers. The Commission vote to accept the settlement was 3-2, with Commissioners Slaughter and Chopra dissenting, the other Commissioners issuing a joint statement, and Commissioner Wilson also issuing a separate statement.

Three PET Resin Producers Restructure Joint Venture to Resolve Competition Concerns

Three polyethylene terephthalate (PET) resin producers agreed to restructure their transaction and to accept certain other conditions to settle FTC charges that their proposed $1.1 billion joint acquisition of a PET production facility under construction from a bankruptcy estate would substantially lessen competition in the highly concentrated market for PET resin products in North America. PET is a plastic polymer used primarily to make bottles and packaging for food and other products. The terms of the proposed consent order seek to prevent Alpek S.A.B de C.V., known as DAK, Indorama Ventures Plc, and Far Eastern New Century (FENC) from using their joint ownership of the assets to exercise market power, or to transmit competitively sensitive information beyond what is necessary to accomplish the legitimate purposes of the joint venture.

In Other News


FTC Chairman Testifies before House Subcommittee

On behalf of the Commission, Chairman Simons testified before the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, on competition enforcement activities and policy priorities. In his testimony, Chairman Simons outlined recent FTC initiatives to preserve and promote competition for the benefit of American consumers. These include notable victories stopping anticompetitive mergers and conduct, public hearings on a variety of competition and consumer protection issues, and advocacy.

romance scam infographic

New FTC Data Spotlight Details Big Jump in Losses, Complaints about Romance Scams

Complaint data released by the FTC shows romance scams generated more reported losses than any other consumer fraud type reported to the agency in 2018. The number of romance scams reported to the FTC has grown from 8,500 in 2015 to more than 21,000 in 2018, while reported losses to these scams more than quadrupled in recent years—from $33 million in 2015 to $143 million last year. The median reported loss was $2,600, with those 70 and over reporting the biggest median losses at $10,000. Romance scammers often find their victims online through a dating site or app or via social media.

FTC Announces New Date for Workshop Examining Online Event Ticket Sales

The FTC has announced it is moving back until June 11 the date of a workshop aimed at examining consumer protection issues related to the online event ticket marketplace. The workshop was to take place in March, but the agency has rescheduled it due to the recent government shutdown. The event will bring together a variety of stakeholders, including industry representatives, consumer advocates, trade associations, academics, and government officials, to discuss problematic practices in the online event ticket marketplace.

FTC Completes Review of CAN-SPAM Rule

The FTC announced that it has completed its first review of the CAN-SPAM Rule, which establishes requirements for commercial e-mail messages and gives recipients the right to opt out of receiving them. The Commission voted to keep the Rule with no changes. The Rule requires that a commercial e-mail contain accurate header and subject lines, identify itself as an advertisement, include a valid physical address, and offer recipients a way to opt out of future messages.