International Monthly: July 2020

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

JULY 2020

Competition

Vertical Merger Guidelines

FTC and DOJ Issue Antitrust Guidelines for Evaluating Vertical Mergers

The FTC and the Department of Justice issued new Vertical Merger Guidelines that outline how the federal antitrust agencies evaluate the likely competitive impact of vertical mergers and whether those mergers comply with U.S. antitrust law.  The Guidelines detail the techniques and main types of evidence that the agencies typically use to predict whether vertical mergers may substantially lessen competition.  They mark the first time FTC and the Department have issued joint guidelines on vertical mergers, and represent the first major revision to guidance on vertical mergers since the recently withdrawn 1984 Non-Horizontal Merger Guidelines issued by the Department of Justice.  The Commission vote to issue the Vertical Merger Guidelines was 3-2. 

Alimentation Couche-Tard Inc.

Convenience Store Operators Pay $3.5 Million Civil Penalty for Failure to Divest Stores Required by 2018 Order

Retail fuel station and convenience store operator Alimentation Couche-Tard Inc. and its former affiliate, CrossAmerica Partners LP, agreed to pay a $3.5 million civil penalty to settle allegations that they violated a 2018 order requiring timely divestitures of 10 retail fuel stations in Minnesota and Wisconsin to Commission-approved buyers.  The 2018 order settled FTC charges that the operators’ acquisition of approximately 380 retail fuel stations with attached convenience stores in 10 states was anticompetitive because it would have increased the risk of both unilateral and coordinated anticompetitive effects in 10 local retail fuel markets.

Elanco

FTC Requires Elanco to Divest Assets in Three Animal Health Product Markets as a Condition of Bayer Acquisition

The FTC will require Elanco Animal Health and Bayer Animal Health to divest three animal health products to settle charges that Elanco’s proposed $7.6 billion acquisition of Bayer would likely be anticompetitive in those markets.  The FTC’s complaint alleges that the proposed acquisition would harm U.S. competition in three markets: low-dose prescription treatments for outer ear inflammation in dogs; fast-acting oral treatments that kill adult fleas on dogs; and brand-name cattle pour-on insecticides.  The terms of the proposed settlement require Elanco to divest its product in each of these markets, including all intellectual property and related assets, to an agreed-upon third party.  FTC staff and the staff of antitrust agencies in Australia, New Zealand, the United Kingdom, Canada, and the European Commission worked cooperatively to analyze the proposed transaction and potential remedies.

Eldorado Resorts

Casino Operators to Divest Assets in Two Local Markets as Condition of Merger

The FTC will require casino operator Eldorado Resorts, Inc. to divest casino-related assets in Nevada and Louisiana, to settle charges that Eldorado’s $17.3 billion agreement to acquire Caesars Entertainment Corporation likely would be anticompetitive in those markets, leading to higher prices and reduced quality for consumers of casino services.  The Commission voted 3-1-1 to approve the settlement.


Consumer Protection and Privacy

FTC and Federal Prosecutors Act Against Firm That Falsely Promised Next Day Shipping of Masks and Other COVID-19 Protective Equipment

SuperGoodDeals.com, Inc.

The FTC charged an online marketer with falsely promising consumers next-day shipping of face masks and other personal protective equipment (PPE) to deal with the coronavirus pandemic.  The FTC alleged that SuperGoodDeals.com, Inc., and its owner sought to capitalize on the soaring demand for PPE from consumers worried about being exposed to the coronavirus.  The firm’s website said PPE was “in stock,” and touted “Pay Today, Ships Tomorrow.”  But according to the FTC, it frequently it took weeks for SuperGoodDeals to ship the PPE merchandise customers ordered.  The U.S. Attorney’s Office in Brooklyn, New York, concurrently brought a criminal case against the firm’s owner, alleging that he engaged in price gouging and mail and wire fraud.  To date, the FTC has sent more than 275 letters to other companies warning them against falsely promoting or advertising COVID-19 products or therapies as effective treatments.

FTC Data Shows Record Surge in Online Shopping Complaints During Pandemic

Online Shopping

Newly released data show that since the beginning of the coronavirus pandemic, consumers have complained to the FTC in record numbers about problems related to online shopping.  The FTC’s latest Consumer Protection Data Spotlight shows that in April and May, the FTC received more than 34,000 complaints from consumers related to online shopping.  More than 18,000 of those complaints related to items that were ordered but never delivered.  The most common item reported not delivered was face masks, with other reports including sanitizer, toilet paper, thermometers, and gloves as not received.  While online shopping complaints to the FTC have been on the rise for a number of years, reports of unreceived items in May 2020 alone represent a nearly two-fold increase over the number of reports in December 2019, the heart of the busy holiday shopping season.

Privacy Shield

FTC Settles Two Privacy Shield Cases

The FTC recently announced settlements in two EU-U.S. Privacy Shield cases.  An operator of secure data centers, NTT Global Data Centers, Inc., formerly known as RagingWire Data Centers, Inc., settled FTC allegations that it misled consumers about its participation in the EU-U.S. Privacy Shield framework and failed to adhere to the program’s requirements before and after allowing its certification to lapse.  The Commission vote to accept the proposed consent agreement was 3-1-1.  The FTC also finalized a settlement with Ortho-Clinical Diagnostics, Inc., a medical diagnostic devices and services company, which claimed that it participated in the Privacy Shield framework and complied with the program’s requirements, even though the company had allowed its certification to lapse in 2018.  As part of the settlement, Ortho-Clinical is required to protect personal information it collected while participating in the Privacy Shield program, or to return or delete the information.  The European Court of Justice issued a decision on July 16 invalidating, under European law, the European Commission’s underlying decision on the Privacy Shield program, which had authorized participants to transfer data from European Union countries to the United States in compliance with the program’s requirements.  In addition to the Privacy Shield claims, both FTC orders prohibit the companies from making misrepresentations about participation “in any privacy or security program sponsored by a government or any self-regulatory or standard-setting organization.”


In Other News

Due to COVID-19 Pandemic, FTC Grants Public Access to Four Administrative Proceedings Via Telephone or Live Streaming

The FTC has issued orders in four administrative litigation proceedings that will allow the public to access the proceedings via telephone or live streaming.  Due to the COVID-19 pandemic, the general public will not be allowed inside the hearing room.  In-person access to the hearing room will be limited to 10 people, consisting of the witness, counsel, judicial staff, and the court reporter, and only for the purpose of live witness testimony.  The four proceedings are Axon Enterprise and Safariland; Peabody Energy-Arch Coal; Thomas Jefferson University; and Altria Group/JUUL Labs.

PrivacyCon2020

FTC Releases PrivacyCon 2020 Agenda

The FTC has released the final agenda for its fifth annual PrivacyCon event, which will be held online on July 21.  PrivacyCon 2020 will bring together a diverse group of stakeholders to discuss the latest research and trends related to consumer privacy and data security.  Three morning sessions will focus on research related to health apps, artificial intelligence, and Internet of Things devices.  Three afternoon sessions will feature discussions on research related to the privacy and security of specific technologies such as digital cameras and virtual assistants, international privacy, and miscellaneous privacy and security issues.  Links to the research that will be presented at PrivacyCon 2020 are available on the event page.  PrivacyCon will take place online from 9 a.m. ET to 5 p.m ET.  A link to view PrivacyCon 2020 will be posted on the event page prior to the start of the event.  Registration is not required.

Made in USA

FTC Issues Staff Report on Made in USA Workshop, Seeks Comment on Proposed Labeling Rule

The FTC issued a staff report and asked for public comment on a proposed Made in USA Labeling Rule, which would apply to product labels making Made in USA and other unqualified U.S.-origin claims.  It would prohibit marketers from making such claims unless: 1) final assembly or processing of the product occurs in the United States; 2) all significant processing that goes into the product occurs in the United States; and 3) all or virtually all ingredients or components of the product are made and sourced in the United States.  The Commission vote approving publication of the proposed Made in USA Labeling Rule in the Federal Register was 4-1.

FTC and DOJ Release FY 2019 Hart-Scott-Rodino Premerger Notification Report

The FTC and the Justice Department’s Antitrust Division released the agencies’ 42nd Annual Hart-Scott-Rodino Report.  Companies notified the agencies of 2,089 HSR reportable transactions during fiscal year 2019, which is a one percent decrease from the 2,111 transactions reported in fiscal year 2018.  The report also summarizes the agencies’ merger enforcement activities for fiscal year 2019, with a total of 38 merger challenges brought to maintain competition in sectors of importance to consumers, including consumer goods and services, pharmaceuticals, healthcare, high tech and industrial goods, and energy.

Contact Lens Rule

FTC Announces Final Amendments to the Agency’s Contact Lens Rule

The FTC announced the approval of a final rule amending the agency’s Contact Lens Rule, which facilitates shopping for contact lenses by requiring prescribers to automatically provide a copy of a patient’s prescription to the patient and to verify or provide prescriptions to third-party sellers.  The Final Rule requires prescribers to request that their patients confirm that they have received their prescription, and allows flexibility in the way the prescription and confirmation are provided.

FTC Provides Real-Time Transparency for HSR Transaction Numbers

In response to increased interest in levels of M&A activity, the FTC Bureau of Competition’s Premerger Notification Office has begun posting real-time monthly data for Hart-Scott-Rodino (HSR) Act filings.  The FTC is posting monthly totals for the most recent six-month period and will update the numbers on a six-month rolling basis on the PNO homepage