International Monthly: June 2016

 
 U.S. Competition, Consumer Protection and Privacy News
 

JUNE 2016

Consumer Protection and Privacy

FTC and 10 Foreign Agencies Sign Memorandum of Understanding to Combat Unsolicited Messages and Calls

Seeking to forge a stronger alliance to combat the nuisance of illegal robocalls, the FTC and 10 international partners recently signed a memorandum of understanding (MOU). The MOU facilitates information sharing and enforcement cooperation in the worldwide fight against unsolicited messages and calls. The signing organizations are members of the London Action Plan, a network of public agencies and private-sector representatives that promotes cooperation to target spam and unsolicited calls and their related problems, such as online fraud and deception, phishing, and dissemination of viruses. Each of the MOU signatories has committed to sharing information and intelligence about unsolicited messaging and calls, especially concerning fraudulent and malicious activities. The 11 signatories are ACM (the Netherlands), ACMA (Australia), CRTC and OPC (Canada), FTC and FCC (United States), ICO and NTSIT (United Kingdom), KISA (Korea), Department of Internal Affairs (New Zealand), and National Consumer Commission (South Africa).

The FTC announced the MOU in connection with its latest robocall enforcement action brought jointly with the Office of the Florida Attorney General. It marks the 39th action taken since January 2015 as part of a coordinated multinational enforcement effort to halt robocall operations. The enforcement crackdown includes actions taken by international partners, the Canadian Radio-television and Telecommunications Commission (CRTC) and the United Kingdom's Information Commissioner's Office (ICO), as well as the U.S. Department of Justice, the Federal Communications Commission, and the attorney generals' offices of several states. Through their collective enforcement efforts, these agencies have taken action against operations estimated to have made billions of illegal robocalls. The FTC also issued a new consumer education document that provides information about how consumers can block unwanted telephone calls.

Utah Jury Finds Against Firms That Made More Than 117 Million Illegal Telemarketing Calls to Consumers

A federal court jury in Utah delivered a verdict in favor of the FTC against three Utah-based firms and their owner, finding that they engaged in deceptive and unlawful telemarketing campaigns pitching movies, including making more than 117 million illegal calls to consumers, in violation of the FTC's Telemarketing Sales Rule. The court will decide what relief to impose in later proceedings. The evidence showed that the defendants' telemarketers called millions of numbers on the FTC's Do Not Call (DNC) Registry and misrepresented to consumers that “all of the proceeds” from the sale of their DVDs would be used to complete a recommended viewing list of the nonprofit Coalition for Quality Children's Media. In reality, one of the defendant firms had contracted to receive 93 percent of the sales.

Electronic Health Records Company Settles FTC Charges It Deceived Consumers About Privacy of Doctor Reviews

Practice Fusion, a cloud-based electronic health record company, has agreed to settle FTC charges it misled consumers by soliciting reviews for their doctors, without disclosing adequately that these reviews would be publicly posted on the Internet. This posting resulted in public disclosure of patients' sensitive personal and medical information. The settlement will prohibit Practice Fusion from making deceptive statements about the privacy or confidentiality of the information it collects from consumers, and will also require the company, prior to making any consumers' information publicly available, to clearly and conspicuously disclose this fact and obtain consumers' affirmative consent.

Competition

FTC and Department of Justice Sign Antitrust Cooperation Agreement with Peru's Competition Agency

trilateral

The FTC and the Department of Justice signed an antitrust cooperation agreement with Peru's National Institute for the Defense of Competition and the Protection of Intellectual Property. The agreement will promote increased cooperation and communication among the competition agencies in both countries. The agreement was signed in Washington, D.C., by FTC Chairwoman Edith Ramirez, Principal Deputy Assistant Attorney General Renata Hesse, who heads the Justice Department's Antitrust Division, and Chairman Hebert Tassano of INDECOPI.

FTC Testifies Before House Judiciary Subcommittee Regarding International Competition Policy and Enforcement

The FTC outlined its perspectives on international competition policy and enforcement in testimony presented to the U.S. House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law. Commissioner Maureen K. Ohlhausen testified on behalf of the Commission regarding the FTC's work in bilateral and multilateral forums, such as the International Competition Network and the Organization for Economic Cooperation and Development's Competition Committee. This work promotes convergence toward best practices in antitrust enforcement and policy. Just recently, the FTC led an ICN project that culminated in the adoption of Guidance on Investigative Process. The guidance addresses key procedural fairness issues of transparency, meaningful engagement with parties, and the right to counsel. The FTC also has promoted antitrust enforcement cooperation among countries that are investigating the same conduct or merger transaction. The testimony also describes an FTC-led project to address undue costs and burdens in multi-jurisdictional merger review, which resulted in best practice recommendations that many competition agencies have adopted. The testimony also identified the FTC's interaction with the three Chinese competition agencies, and that the FTC has made engagement with these agencies one of its highest international priorities.

FTC Requires Industrial Gas Suppliers to Divest Assets as a Condition of Merger

American Air Liquide Holdings, Inc. and Airgas, Inc., two of the largest suppliers of gases, have agreed to divest certain production and distribution assets to settle FTC charges that their proposed $13.4 billion merger likely would have harmed competition. The companies agreed to sell assets used to produce and supply seven types of industrial gas that are used in the oil and gas, steelmaking, health care, food manufacturing, and other industries. According to the FTC complaint, the proposed acquisition would eliminate direct competition between the two companies in certain already concentrated markets, increasing the likelihood that Air Liquide could unilaterally exercise market power and that the remaining competitors, if any, could collude or coordinate their actions.

Court of Appeals Grants Emergency Injunction Staying Pennsylvania Hospital Merger

The Third Circuit Court of Appeals granted an emergency injunction in the Penn State Hershey Medical Center – PinnacleHealth System merger in response to the FTC's appeal of a lower court ruling. The Commission granted a joint motion by the parties for a continuance of the related administrative hearing before the Commission until 21 days after the Third Circuit rules on the Commission's appeal.

In Other News

Officials from the United States, Canada, and Mexico Participate in Trilateral Meeting in Toronto To Discuss Antitrust Enforcement

The heads of the antitrust agencies of the United States, Canada, and Mexico met in Toronto to discuss their ongoing work to ensure effective antitrust enforcement cooperation in our increasingly interconnected markets. The meetings were held among FTC Chairwoman Edith Ramirez, Principal Deputy Assistant Attorney General Renata Hesse of the U.S. Department of Justice's Antitrust Division, Canadian Commissioner of Competition John Pecman, and President Alejandra Palacios Prieto of the Mexican Federal Economic Competition Commission. The discussions covered a wide range of topics, including recent developments, effective agency litigation, disruptive innovation, cooperation between agencies, and technical assistance.

FTC Testifies Before Congress on Proposed Bills That Address the Agency's Ability To Protect Consumers and Competition

The FTC presented its views on 17 bills Congress is currently considering with respect to the agency's jurisdiction and operations. While generally expressing support for several bills, the testimony, delivered by Chairwoman Ramirez before the U.S. House of Representatives Committee on Energy and Commerce's Subcommittee on Commerce, Manufacturing and Trade, noted that other proposed measures may unintentionally hamper the agency's ability to continue to fulfill its dual consumer protection and competition missions.

FTC's Premerger Notification Office Announces New Test To Determine Whether Foreign Entities Are Classified As Corporate Under HSR Rules

The FTC's Premerger Notification Office has announced a new test to determine whether foreign entities are treated as corporate or non-corporate for purposes of the Hart-Scott-Rodino (“HSR”) Act and Rules, which govern the FTC's and DOJ's premerger notification and review regimes. This determination can have important implications for whether a transaction is reportable and the applicability of certain exemptions. Under the new test, if a foreign entity issues securities that allow the holders to vote for the election of a supervisory board of directors, it is treated as a corporate entity for HSR purposes. If not, it is treated as a non-corporate entity.

FTC To Host September Workshop on Testing Effectiveness of Consumer Disclosures

The FTC will host a public workshop on Sept. 15 to examine the testing and evaluation of disclosures to consumers. The workshop, called “Putting Disclosures to the Test,” aims to encourage and improve the evaluation and testing of disclosures by industry, academics, and the FTC. Among the areas where disclosures play a key role in consumer protection are: disclosures in advertising designed to prevent ads from being deceptive; privacy-related disclosures, including privacy policies and other mechanisms to inform consumers that they are being tracked; and disclosures in specific industries designed to prevent deceptive claims, including jewelry, environmental claims, and fuel economy advertisements. Presentation proposals may be submitted to disclosuretesting@ftc.gov. More information on the proposal process and more details about the event are available here.

New FTC Resources Warn Consumers About Imposter Scams

imposter scams

The FTC received 353,770 imposter-related complaints last year. In response, the Commission has released new resources at ftc.gov/imposters to help consumers spot and avoid four common kinds of imposter scams: Family Emergency Imposter Scams, Tech Support Imposter Scams, Online Romance Imposter Scams, and IRS Imposter Scams. Consumers who watch the IRS imposter scam video will learn that the IRS always makes first contact through a letter in the mail, never by phone call, email, or text message. Demands for immediate payment by pre-paid debit card, wire transfer, or cashier's check are also sure signs of fraud.

FTC Staff Provides Comment on FCC's Proposed Privacy Rulemaking

The staff of the FTC Bureau of Consumer Protection filed a comment with the Federal Communications Commission regarding the FCC's proposed privacy rulemaking for broadband internet access service providers. Staff outlined the FTC's history of privacy enforcement, policy initiatives, and consumer and business education. Staff suggested changes to the proposed regulatory text, including how personally identifiable information is defined, the structure of privacy notices, the role of consumer notice and choice in various business practices, and the proposed regulations on data security and breach notification. The Commission also testified before Congress, through Chairwoman Edith Ramirez and Commissioner Maureen Ohlhausen, at a hearing on the FCC's proposed privacy rules.

Blog Post Explains FTC Staff's Analysis of Antitrust Concerns That May Be Raised by the Acquisition of a Partial Interest in a Competitor

In a blog post, FTC Bureau of Competition Assistant Director Michael Moiseyev discusses antitrust concerns that may be raised by the acquisition of a partial interest in a competitor. One concern is that acquisition of a partial interest may give a competitor the ability to influence the competitive decisions of a rival through, for example, board representation or having veto power over significant issues like budget or strategy. Another concern is that a minority interest in a competitor may reduce the incentive to compete vigorously because a partial interest-holder profits even when it loses business to the rival in which the interest is held. The post also discusses how providing a competitor with non-public, competitively sensitive information can increase the risk of anticompetitive unilateral or coordinated behavior, especially if the information sharing goes both ways.