International Monthly: March 2016

 
 U.S. Competition, Consumer Protection and Privacy News
 

MARCH 2016

Consumer Protection and Privacy

FTC Chairwoman Edith Ramirez Issues Statement on Release of EU-U.S. Privacy Shield Framework

FTC Chairwoman Edith Ramirez issued a statement underscoring the FTC’s commitment to enforcing commercial privacy promises under the newly-released EU-U.S. Privacy Shield Framework. The Chairwoman noted, “The EU-U.S. Privacy Shield Framework supports the growing digital economy on both sides of the Atlantic, while ensuring the protection of consumers’ personal information.” She also said, “Strong law enforcement and increased cooperation will be critical to the new framework’s success, and the FTC will play a significant role in enforcing commercial privacy promises under the framework,” and noted that the FTC “will work closely with our European counterparts to provide robust privacy and data security protections for consumers in the United States and Europe.”

FTC Releases Annual Summary of Consumer Complaints

Sentinel Data Book

The FTC released its annual Consumer Sentinel Network (CSN) Data Book analyzing the more than 3 million consumer complaints received in 2015. Debt collection, identity theft and imposter scams were the three most common categories of complaints received. Rounding out the top 10 were complaints related to telephone and mobile services; prizes, sweepstakes and lotteries; banks and lenders; shop-at-home and catalog sales; auto-related complaints; television and electronic media; and Credit Bureaus, Information Furnishers and Report Users. Apart from the United States, the top reported company locations, as reported by consumers, were Canada, the United Kingdom, Nigeria, India, Jamaica, China, Mexico, the Dominican Republic and Ghana. The CSN data book includes complaints submitted through the cross-border complaint website, econsumer.gov, which is a partnership of 36 consumer agencies around the world.

ASUS Settles FTC Charges That Insecure Home Routers and “Cloud” Services Put Consumers’ Privacy at Risk

Taiwan-based computer hardware maker ASUSTeK Computer, Inc. has agreed to settle FTC charges that critical security flaws in its wireless routers put the home networks of hundreds of thousands of consumers at risk. The FTC’s administrative complaint charged that the routers’ insecure “cloud” services led to the compromise of thousands of consumers’ connected storage devices, exposing their sensitive personal information on the Internet. The proposed consent order will require ASUS to establish and maintain a comprehensive security program subject to independent audits for the next 20 years. This matter is part of the FTC’s ongoing effort to ensure that companies secure the software and devices that they provide to consumers.

FTC Files Federal Court Actions Against Two Office Supply Schemes That Targeted Nonprofits and Small Businesses

The FTC has charged two office supply operations with targeting non-profit organizations and small businesses. The defendants allegedly tricked victims into paying for overpriced office and cleaning supplies they never ordered. At the FTC’s request, federal courts in California and Maryland have temporarily halted and frozen the assets of the two operations. The agency seeks to permanently stop the illegal practices and obtain refunds for victims. The FTC’s complaints are posted here and here. Defendants in both cases are charged with violating the FTC Act, the Telemarketing Sales Rule, and the Unordered Merchandise Statute.

FTC Takes Action Against Deceptive Claims by Online Schools

Following its January enforcement action against for-profit DeVry University, the FTC has taken a series of actions against online schools for deceiving consumers about the benefits of their programs. The agency has charged online distance education school Stratford Career Institute with misleading consumers about its high school equivalency program. In its complaint, the agency alleges that Stratford failed to meet the basic requirements set by most states, meaning thousands of students nationwide paid as much as $989 for a diploma that could not meet their educational or career needs. The FTC also has filed charges against two operators of online “high schools” alleging that Stepping Stonez Development, LLC, and Capitol Network Distance Learning Programs, LLC, are little more than diploma mills, charging anywhere from $135 to $349 for worthless certificates.

Competition

FTC Requires Divestiture As a Condition of Hikma Pharmaceuticals Acquiring Certain Drug Products from Ben Venue Laboratories

Generic drug marketer Hikma Pharmaceuticals agreed to divest its rights and interests in five generic injectable pharmaceuticals to resolve charges that its $5 million acquisition of the rights to various drug products from Ben Venue Laboratories would likely harm future competition, decreasing the number of future suppliers in in each of these markets. Under the terms of the proposed settlement, Hikma is required to divest the five generic injectable drug assets to Amphastar Pharmaceuticals, Inc., a California-based specialty pharmaceutical company that sells generic injectable and inhalation products.

FTC Puts Conditions on Generic Drug Marketer Lupin’s Proposed Acquisition of Gavis Pharmaceuticals

To settle FTC charges that generic drug manufacturer Lupin Ltd.’s proposed $850 million acquisition of Gavis Pharmaceuticals LLC would likely be anticompetitive, Lupin and Gavis agreed to sell the rights and assets for two generic drugs. One drug is used to treat bacterial infections, and the other is used to treat ulcerative colitis. The proposed consent order requires the companies to divest these products to G&W Laboratories, a generic pharmaceutical company. Without a divestiture, the merger would have combined two of only four companies that currently market generic doxycycline monohydrate capsules, used to treat bacterial infections, in two dosage strengths. The merger also would have eliminated one of only a few companies likely to be near future entrants into the market for generic mesalamine extended release capsules, used to treat ulcerative colitis.

FTC Files Amicus Brief in Pay for Delay Case

The FTC filed an amicus brief in the U.S. Court of Appeals for the First Circuit in a pay-for-delay case, arguing that the district court erred in dismissing the case. The FTC argued that the lower court had conflated two distinct analyses under antitrust law. The first is that the plaintiff must establish the existence of an antitrust violation, which requires a general showing of harm to the competitive process. The second is that the plaintiff must have antitrust “standing,” which requires a specific showing by a private party that, among other things, its injury was caused by the antitrust violation. The brief also points out that a reverse payment from a brand-name drugmaker for the purpose of settling patent litigation can violate the antitrust laws if it actually induces a generic drugmaker to abandon its patent challenge and stay out of the market, regardless of whether the generic firm would actually have otherwise entered the market sooner than permitted by the settlement agreement. Read more about it in the FTC’s blog post.

In Other News

FTC Promotes Education for National Consumer Protection Week: Releases Blog and New Video on “Free Trials”

For 18 years, National Consumer Protection Week (NCPW), which falls in March, has been a time to encourage consumers to learn about their rights, and how to make informed buying decisions and report scams, identity theft, and unfair business practices. Through the NCPW website, the FTC and its partners are offering information on a wide range of topics, including credit and debt, online safety, imposter and other scams, identity theft, and more. The site features a blog to update visitors on the latest consumer protection news, including legal actions, new resources, and partner-sponsored NCPW events. The FTC posted a new blog and video on the NCPW site, and blogged on the FTC’s consumer blog on how consumers can protect themselves from the perils of so-called free trials.

FTC Reports on 2015 Activities To Combat Illegal Debt Collection Practices and To Enforce the Equal Credit Opportunity Act

The FTC sent a summary of its 2015 work on debt collection practices to the Consumer Financial Protection Bureau (CFPB) for inclusion in a required report to Congress. The FTC and the CFPB share enforcement responsibilities under the Fair Debt Collection Practices Act. FTC staff also sent the CFPB a summary of its activities related to enforcement of the Equal Credit Opportunity Act.

FTC and DOJ Encourage Massachusetts To Consider Expansion of Optometrist Services to Glaucoma Patients

In response to a request by a Massachusetts State Representative on the competitive impact of proposed legislation, the FTC and DOJ’s Antitrust Division submitted a joint statement encouraging the Massachusetts legislature to consider expanding the services that optometrists can provide to glaucoma patients. In the statement, the agencies recommend that the legislature restrict optometrists’ ability to treat glaucoma only to the extent necessary to ensure patient health and safety.

FTC Staff Comments Point to Concerns Raised by West Virginia Proposal on Supervision of Advanced Practice Registered Nurses

FTC staff submitted written comments on the competitive impact of a legislative proposal to modify the supervision requirements imposed on Advanced Practice Registered Nurses (APRNs) in West Virginia. Whereas the proposal would permit some APRNs, under limited conditions, to write prescriptions without a formal agreement with a supervising physician, FTC staff found that the bill raises significant competitive concerns. In particular, staff focused on the conditions and exclusions that the proposal would impose on independent APRN prescribing, and conflict of interest concerns raised by the bill’s requirements of physician permission for and oversight of APRN prescribing.

FTC Submits Fiscal Year 2017 Budget Request, Performance Plan, and Fiscal Year 2015 Performance Report to Congress

The FTC has submitted to Congress its Fiscal Year 2017 budget request, which includes the FY 2017 Budget Overview Statement, Performance Plan for FY 2016 and FY 2017, and Performance Report for FY 2015, as required under the Government Performance and Results and Modernization Act of 2010.