International Monthly: March 2021

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

MARCH 2021

Highlights

OIA Report on FTC Role in a Changing World

FTC Report Explores Agency’s International Role

The FTC released a report exploring the agency’s international role in light of globalization, technological change, and the increasing number of competition, consumer protection, and privacy enforcement regimes around the world.  The report is based on testimony from the FTC’s March 2019 hearings, which featured 44 speakers from 17 jurisdictions as well as presentations by then-FTC Chairman Joseph Simons and other current and former Commissioners.  It elicited input from foreign and U.S. agency officials, private practitioners, and academic and civil society speakers on the international implications of the FTC’s work on behalf of American consumers.

Acting Chairwoman pull quote

In the report, staff explores several observations and recommendations arising from the hearing and its own experience.  The report:

  • applauds the recent Congressional reauthorization of the U.S. SAFE WEB Act, which protects American consumers and facilitates cross-border commerce through enhanced information sharing and investigative assistance in consumer protection and privacy matters, and recommends that Congress make the SAFE WEB Act a permanent part of the FTC Act.
  • urges the FTC to pursue additional mechanisms for enhanced antitrust information sharing and investigative assistance, and to seek to overcome foreign barriers to FTC enforcement.
  • recommends that the FTC continue to exercise international leadership, leveraging its expertise and cross-disciplinary synergies to address emerging issues.
  • suggests that the FTC expand on its initiatives to build strong relations with counterparts, including through its International Technical Assistance and International Fellows programs.
  • advocates an appropriate role for the FTC to ensure that its experience and expertise inform U.S. government policies that involve international issues within the agency’s mandate.

Consumer Protection and Privacy

New FTC Data Show Massive Increase in Romance Scams, $304M in Losses

Romance scams

More consumers than ever report falling prey to romance scammers, according to new FTC data that show consumers reported losing a record $304 million to romance scams last year.  The amount consumers reported losing to romance scammers is up about 50 percent since 2019, and has increased more than fourfold since 2016.  Scammers draw people in using pictures stolen from around the internet, building false personae that seem just real enough to be true, but always having a reason never to meet in person.  Eventually, the supposed suitor will ask for money from the unwitting consumer.  The impact can be major; the median loss reported to the FTC is $2,500—more than ten times higher than the median loss across all types of fraud.  The FTC provides tips for consumers on how to spot romance scams and protect themselves at ftc.gov/romancescams.

Charity fraud telefunding

FTC Shuts Down Massive Charity Fraud Telefunding Operation

The FTC, along with nearly 50 state agencies, has shut down Associated Community Services (ACS), a massive charity fraud telefunding operation.  ACS  bombarded tens of millions of consumers with billions of deceptive and harassing charitable fundraising calls (mostly illegal robocalls), collecting more than $110 million through these deceptive solicitations.  ACS and related defendants have agreed to settle charges by the FTC and state agencies that they knowingly duped generous Americans into donating to charities that failed to provide the services they promised, spending little or no money on the charitable causes they claimed to support—in some cases as little as one-tenth of one percent.  ACS was the major fundraiser for the sham Cancer Fund charities that were shut down by the FTC and states in 2015.

Operators of Bogus Income Scam Targeting Latinas Permanently Banned from Pitching Money-Making Opportunities

Income scam targeting Latinas

The owners of a scam that targeted Latina consumers with promises of wealth and financial security are permanently prohibited from selling money-making opportunities under the terms of a settlement with the FTC.  In a complaint filed as part of the FTC’s Operation Income Illusion sweep, the agency alleged that Moda Latina BZ Inc. and two individual defendants lured Latina consumers into buying a work-at-home business with ads on Spanish-language television claiming that they could earn “large profits” re-selling luxury products such as brand-name perfumes.


Competition

Georgia Hospitals Abandon Proposed Merger in the Face of FTC Challenge

After the FTC staff recommended that the Commission challenge a merger between two of the largest hospital systems in the Macon area in central Georgia, Atrium Health Navicent, Inc. and Houston Healthcare System, Inc. announced that they are abandoning their proposed merger.  Staff had determined that the proposed merger would eliminate the intense competition between two of the largest hospital systems in the area, and was likely to cause significant harm to central Georgia patients and businesses in the form of higher healthcare costs.  Staff also found evidence that competition to improve quality of patient care, invest in facilities and technologies, and expand access to healthcare services would be harmed by the merger.  As a result, staff recommended that the Commission challenge the merger.  Following the transaction’s abandonment, the FTC closed its investigation.


In Other News

FTC To Hold Virtual Workshop Exploring Digital “Dark Patterns”

The FTC will host a virtual workshop on April 29 to examine digital “dark patterns,” a term that has been used to describe a range of potentially manipulative user interface designs used on websites and mobile apps.  “Bringing Dark Patterns to Light: An FTC Workshop” will explore the ways in which user interfaces can have the effect of obscuring, subverting, or impairing consumer autonomy, decision-making, or choice.  For example, some sites sneak extra items into a consumer’s online shopping cart, or require users to navigate a maze of screens and confusing questions to avoid being charged for unwanted products or services.  The FTC workshop will bring together researchers, legal experts, consumer advocates, and industry professionals to examine what dark patterns are and how they can affect consumers and the marketplace.  The FTC is seeking research, recommendations for discussion topics, and requests for panelists in advance of the workshop.  Please email any relevant information to darkpatterns@ftc.gov by March 15.

FTC Issues Orders to Five E-Cigarette Manufacturers

Orders to e-cig manufacturers

As part of its ongoing study of the U.S. e-cigarette market, the FTC has issued orders to five manufacturers seeking information about the companies’ 2019 and 2020 sales, advertising, and promotional expenditures.  The goal is to help the Commission, policymakers, and the public better understand this rapidly growing market.  The FTC’s e-cigarette study complements studies the agency has been conducting for many years on cigarettes and smokeless tobacco products.

FTC Launches Initiative To Encourage Lower-Income Communities To Report Fraud

The FTC is expanding its outreach to lower-income communities by launching a new initiative aimed at partnering with organizations that provide free and low-cost legal services to report fraud and other illegal business practices their clients have experienced directly to the FTC.  For more information about the Community Advocate Center initiative, visit ReportFraud.ftc.gov/community.

FTC Issues Annual Report on Ethanol Market Concentration 2020

The FTC issued its 2020 Report on Ethanol Market Concentration.  The Energy Policy Act of 2005 directs the Commission to perform an annual review of market concentration in the ethanol production industry “to determine whether there is sufficient competition among industry participants to avoid price-setting and other anticompetitive behavior.”  As in prior years, the 2020 report concludes that “[t]he low level of concentration and large number of market participants in the U.S. ethanol production industry continue to suggest that the exercise of market power to set prices, or coordinate on price or output levels, is unlikely on a nationwide basis.”