International Monthly: June 2017

 
 U.S. Competition, Consumer Protection and Privacy News
 

JUNE 2017

Consumer Protection and Privacy

FTC and Federal, State, and International Partners Announce Major Crackdown on Tech Support Scams

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The FTC, along with federal, state, and international law enforcement partners, announced “Operation Tech Trap,” a nationwide and international crackdown on tech support scams that trick consumers into believing their computers are infected with viruses and malware, and then charge them hundreds of dollars for unnecessary repairs. Participating agencies announced 16 new actions, including complaints, settlements, indictments, and guilty pleas, against deceptive tech support operations. This brings to 29 the number of law enforcement actions brought by Operation Tech Trap partners in the last year to stop tech support scams.

tech trap readout

For details on the pattern of misconduct, pending matters, settlements, federal criminal charges announced by the U.S. Attorney’s Office for the Southern District of Illinois, and cooperation with India to crack down on tech support scams operating there, click here and here. The FTC also has updated its consumer education related to tech support scams.

FTC and DOJ Case Results in Historic Decision Awarding $280 Million in Civil Penalties Against Dish Network and Strong Injunctive Relief for Do Not Call Violations

dish network

As the result of Do Not Call (DNC) litigation brought by the Department of Justice on behalf of the FTC, as well as the states of California, Illinois, North Carolina, and Ohio, a federal court in Illinois has ordered penalties totaling $280 million and strong injunctive relief against Englewood, Colorado-based satellite television provider Dish Network. The court found Dish liable for millions of calls that violated the FTC’s Telemarketing Sales Rule and other federal and state laws. The civil penalty award includes a $168 million judgment for the federal government, which is a record in a DNC case and the largest civil penalty ever obtained for a violation of the FTC Act. The remainder of the civil penalty was awarded to the states. For details of the injunctive relief, click here.

FTC Stops False Advertising, Phony Reviews by Online Trampoline Sellers

Two brothers have agreed to settle FTC charges that in marketing and selling their Infinity and Olympus Pro brand trampolines they deceived consumers. The alleged deception included directing consumers to review websites that claimed to be independent, but were owned and run by the brothers themselves. These included, “Trampoline Safety of America,” the “Bureau of Trampoline Review,” and “Top Trampoline Review.” The FTC also charged that one of the brothers posted online product endorsements without disclosing his financial interest in the sale of the products. Under an administrative consent order, Son “Sonny” Le and Bao “Bobby” Le are barred from engaging in such deceptive behavior in the future and must clearly and conspicuously disclose any material connections between a reviewer or endorser and the product being reviewed.

FTC and Florida Halt Massive Debt Relief Scam

At the request of the FTC and the State of Florida, a federal court has temporarily halted a massive phony debt relief operation that bilked tens of millions of dollars from financially strapped consumers, including the elderly and disabled. According to the complaint, the individual defendants, through 11 companies, induced people to pay hundreds or thousands of dollars per month by falsely promising they would pay, settle, or obtain dismissals of consumers’ debts and improve their credit. Over time, victims found their debts unpaid, their accounts in default, and their credit scores severely damaged – some were sued by their creditors, and some were forced into bankruptcy. The FTC and Florida allege that the defendants falsely claimed non-profit status to appear more credible and legitimate. Contrary to the defendants’ promises, people got little to nothing for their money and ended up in worse financial positions.

Competition

Restrictions on Fee Setting Violate Federal Antitrust Law

The FTC filed an administrative complaint against the Louisiana Real Estate Appraisers Board, alleging that the group is unreasonably restraining price competition for appraisal services in Louisiana. The “Dodd-Frank” Act requires appraisal companies to pay “a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.” The complaint alleges that the appraisal board’s regulations exceeded the scope of this federal mandate. The regulations required appraisal fees to equal or exceed the median fees identified in survey reports commissioned and published by the board. The board investigated and penalized companies that paid fees below the specified levels.

 

Sherwin-Williams to Divest Assets as a Condition of Acquiring Valspar

The Sherwin-Williams Company agreed to settle FTC charges that its proposed $11.3 billion acquisition of Valspar Corporation is likely anticompetitive by selling Valspar’s North America Industrial Wood Coatings Business to Axalta Coating Systems Ltd. The complaint alleges that the combined firm would be likely to exercise unilateral market power, and that the combined firm and the other remaining competitors would compete less aggressively against each other were the transaction to proceed as initially proposed. The complaint also alleges that there is no economically viable substitute for industrial wood coatings and that barriers to entry are high, because of both the large capital costs needed to build a high-volume industrial wood coatings plant, and the reluctance of customers to switch to unproven new suppliers. Further details are available in the analysis to aid public comment. FTC staff cooperated with the Canadian Competition Bureau, working closely with its staff to analyze the proposed transaction and reaching outcomes that benefit consumers in both countries.

In Other News

Claims Procedure Open for Purchasers of Volkswagen Cars Subject to Misleading “Clean Diesel” Claims

A federal district court signed a settlement negotiated by the FTC and private plaintiffs providing for consumer redress and starting the formal claims process for owners of Volkswagen, Audi, and Porsche 3.0 liter TDI diesel cars. In all, consumers who bought vehicles affected by Volkswagen’s misleading “clean diesel” claims will receive up to $11.5 billion. Consumers can determine if they are eligible for compensation, and if so for how much, at VWCourtSettlement.com. In addition to the orders for compensation to vehicle owners, the Department of Justice and Environmental Protection Agency obtained orders providing over $6 billion for environmental relief.

Refunds Available from Amazon for Unauthorized In-App Purchases Following FTC-Amazon Agreement to End Litigation

Following the recent FTC-Amazon.com, Inc. agreement to end litigation, Amazon has begun offering refunds to consumers for unauthorized in-app charges incurred by children. More than $70 million in charges incurred between November 2011 and May 2016 may be eligible for refunds. Information about how to obtain a refund is available here.

FTC Announces Third PrivacyCon, Calls for Presentations

privacy con

Building on the success of its two previous PrivacyCon events, the FTC announced a call for presentations for its third PrivacyCon, which will take place on February 28, 2018. The FTC is seeking general research for the 2018 PrivacyCon that explores the privacy and security implications of emerging technologies, such as the Internet of Things, artificial intelligence and virtual reality. The 2018 event will focus on the economics of privacy including how to quantify the harms that result from companies’ failure to secure consumer information, and how to balance the costs and benefits of privacy-protective technologies and practices. For more details, click here. Submissions for PrivacyCon must be made by November 17.