International Monthly: May 2019

 
 U.S. Competition, Consumer Protection and Privacy News
 

MAY 2019

Competition

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International Competition Network Adopts Framework for Competition Agency Procedures; U.S. Agencies to Host 2020 Annual Conference

At its annual conference, the International Competition Network (ICN) established a Framework on Competition Agency Procedures (CAP) that reflects the commitment by its participants to uphold fundamental procedural fairness principles and adopted Recommended Practices for Investigative Process that offer aspirational guidance and norm-setting principles on procedural fairness. The ICN also presented reports on vertical mergers, vertical restraints, competition agency design, and private enforcement. The ICN announced that the United States will host the 2020 ICN annual conference in Los Angeles, California.

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The ICN held its 18th annual conference, hosted by Colombia’s Superintendence of Industry and Commerce, on May 15-17. Nearly 500 delegates from more than 80 jurisdictions participated, including competition experts from international organizations and the legal, business, academic, and consumer communities. FTC Chairman Joseph J. Simons led the FTC delegation, and the Department of Justice’s delegation was headed by Assistant Attorney General Makan Delrahim.

FTC Charges Surescripts with Illegal Monopolization of E-Prescription Markets

Surescripts

The FTC sued the health information company Surescripts, alleging that the company employed illegal vertical and horizontal restraints in order to maintain its monopolies over two electronic prescribing, or “e-prescribing” markets: routing and eligibility. E-prescribing provides a safer, more accurate, and lower-cost means to communicate and process patient prescriptions than traditional paper prescribing. Among other things, the complaint alleges that through loyalty and exclusivity agreements and mechanisms, Surescripts took steps to keep e-prescription routing and eligibility customers on both sides of each market from using additional platforms or multihoming.

ALJ Upholds Complaint Challenging Consummated Prosthetics Merger

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Chief Administrative Law Judge D. Michael Chappell upheld an FTC complaint challenging the consummated merger of two prosthetics manufacturers. According to the complaint, Otto Bock’s acquisition of FIH Group Holdings (the owner of Freedom Innovations) eliminated head-to-head competition between the two companies, removing a significant and disruptive competitor, and entrenching Otto Bock’s position as the dominant supplier in the U.S. market for microprocessor prosthetic knees. Otto Bock is required to divest the assets of Freedom Innovations to an FTC-approved buyer.

Tronox

FTC Requires Divestitures by Tronox and Cristal as Condition of Merger

Tronox Limited and Cristal, two of the largest suppliers of the white pigment chloride process titanium dioxide, have agreed to settle FTC charges by divesting Cristal’s North American titanium dioxide assets, thereby preserving competition in the market for this important and widely used compound. The settlement comes after the FTC won key victories before a federal court and an administrative law judge in its case to block the transaction.

FTC and DOJ Meet with Officials from Japan and South Korea

FTC officials, led by Commissioner Christine S. Wilson, together with U.S. Department of Justice representatives, participated in bilateral meetings in Tokyo with Chairman Kazuyuki Sugimoto and other senior officials from the Japan Fair Trade Commission and in Seoul with senior officials from the Korea Fair Trade Commission. The discussions covered a wide range of topics, including recent enforcement developments, antitrust policy, digital markets, and international cooperation, as well as the new Framework on Competition Agency Procedures recently adopted by the ICN. Commissioner Wilson met separately with officials from Japan’s Ministry of Economy, Trade, and Industry on technology and digital platform issues.

Consumer Protection and Privacy

African Dialogue

Agencies from Nearly 20 countries Participate in 10th Annual African Consumer Protection Dialogue Conference

Eighty representatives of agencies responsible for enforcing consumer protection laws in nearly 20 countries, along with regional bodies and multinational organizations, met in Livingstone, Zambia for the 10th African Consumer Protection Dialogue Conference, “Celebrating a Decade Growth for African Cross Border Consumer Protection Collaboration.” Participants reaffirmed their commitment to the 2013 African Dialogue Principles on Cooperation in Consumer Protection Enforcement (“Livingstone Principles”), and pledged to continue with plans to implement them. Meeting sessions focused among other things on consumer education, complaint handling, and enforcement cooperation.

COPPA

App Stores Remove Three Dating Apps After FTC Warns Operator about Potential COPPA, FTC Act Violations

Three dating apps have been removed from Apple’s App Store and Google’s Google Play Store following allegations by the FTC that the apps allowed children as young as 12 to access them. In a recent letter, the FTC warned Ukraine-based Wildec LLC, which operates the apps Meet24, FastMeet, and Meet4U, that the three dating apps appeared to be in violation of the Children’s Online Privacy Protection Act and possibly the FTC Act’s prohibition against unfair practices. The apps have been removed from the app stores until they address the alleged violations outlined by the FTC.

FTC Announces First Actions Exclusively Enforcing the Consumer Review Fairness Act

The FTC has issued three separate proposed administrative complaints and orders enforcing the Consumer Review Fairness Act (CRFA), which prohibits businesses from using form contract provisions that bar consumers from writing or posting negative reviews online, or threatening them with legal action if they do. The companies settling the FTC’s complaints include an HVAC and electrical provider, a flooring firm, and a horseback trail riding operation.

Growing Wave of Social Security Imposters Overtakes IRS Scam

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According to the FTC’s recent Consumer Protection Data Spotlight, “Claiming to be a government authority is a tried and true way that scammers trick people into sending money.” Among the most common have been scammers posing as the Internal Revenue Service (IRS). Recently, however, the FTC’s Consumer Sentinel Network database has seen Social Security Administration (SSA) imposter reports skyrocket, while reports of IRS imposters have declined sharply. SSA imposters tell consumers that their Social Security number has been suspended because of suspicious activity, or because it has been involved in a crime. They ask consumers to confirm their Social Security number, or say they need to withdraw money from the bank and to store it on gift cards or in other unusual ways for “safekeeping.” They may say that accounts will be seized or frozen if the consumer does not act quickly.

FTC to Host Meeting on Indian Call Center Fraud

For the fourth consecutive year, the FTC, in partnership with the U.S.-India Business Council, will host a multi-stakeholder roundtable meeting on Indian call center fraud on June 20. With participants from law enforcement, industry, academia, and advocacy groups, the meeting will focus on ways to combat the impersonation frauds that originate in Indian call centers. These include technology support frauds, tax and other government impersonation scams, and other techniques that have inflicted consumer losses in excess of $100 million. For more information, contact Betsy Broder of the FTC Office of International Affairs.

In Other News

FTC to Hold Workshop on Certificates of Public Advantage in Healthcare Markets

On June 18, the FTC will hold a public workshop in Washington, DC to assess the impact of state government regulatory regimes through which governments may grant approval or disapprove of new health care facilities. State governments are increasingly using certificates of public advantage (“COPAs”), which displace competition among healthcare providers and preclude antitrust scrutiny of healthcare mergers and collaborations. The workshop will examine whether COPAs impact prices, quality, access, and innovation for healthcare services.

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FTC Testifies Before House Subcommittee on Its Work to Protect Consumers and Promote Competition

All five Commissioners, including Chairman Joseph J. Simons, testified on behalf of the Commission before the House Energy and Commerce Subcommittee on Consumer Protection and Commerce. According to the testimony, under existing authority the Commission has aggressively pursued privacy and data security cases in many areas, and promoted competition through its robust enforcement, advocacy, and research programs. The testimony urges Congress to enact privacy and data security legislation, enforceable by the FTC, that would grant the agency civil penalty authority, targeted rulemaking authority under the Administrative Procedure Act (APA), and jurisdiction over non-profits and common carriers. The Commission also testified before the Senate Appropriations Subcommittee on Financial Services and General Government.

e-consumer

Econsumer.gov Releases Top International Fraud Report Data for 2018

Econsumer.gov received 29,988 consumer reports during calendar year 2018, an increase from 20,644 during calendar year 2017. Shop-at-Home/Catalog Sales was the leading report category, followed by Imposter: Business, and Travel/Vacations. For countries outside the U.S., France, India, and Australia were the top consumer locations. China, the U.K., and India were top company locations outside the U.S. Go to https://econsumer.gov to view the complete list or report an international scam. Contact Hui Ling Goh for more information on how to participate in econsumer.gov.

FTC Submits Comment on FDA Guidance Regarding Nonproprietary Naming of Biological Products

The FTC staff has responded to the Food and Drug Administration’s request for comment on its updated industry guidance regarding nonproprietary naming of biological products. The FDA proposes to add a unique, meaningless suffix to the nonproprietary name of all biosimilar and interchangeable products and to any reference biologic approved after January 2017. The FTC comment expresses concern that disparate treatment and differentiated naming of certain biosimilar products will reduce biosimilar competition in the United States. The FDA guidance would likely create unnecessary barriers to entry for lower cost biologic products that are biosimilar to or interchangeable with existing FDA-approved biologic products, according to the FTC comment. New entrants would likely face confusion and the perception of quality differences implied by the different name. The FTC comment notes that this change would subvert the procompetitive purpose of these lower cost medicines.

FTC Announces Agenda for the 14th and Final Session of its Hearings on Competition and Consumer Protection in the 21st Century

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The FTC announced the 14th session of its Hearings Initiative at Creighton University School of Law in Omaha, Nebraska on June 12. The hearing will include a series of roundtable discussions with State Attorneys General on important consumer protection and antitrust issues. Participants will discuss areas of commonality and divergence between state and federal enforcers. The consumer protection panels will address big data and privacy, platforms, challenges unique to state enforcers, and federal/state collaboration. The competition panels will discuss the state of antitrust enforcement including big data and technology issues, multi-sided platforms, federal/state cooperation, monopsony, and occupational licensing.