International Monthly: September 2016

 U.S. Competition, Consumer Protection and Privacy News



FTC and DOJ Seek Comments on Intellectual Property Licensing Guides

The FTC and the Department of Justice’s Antitrust Division released a proposed update of the Antitrust Guidelines for the Licensing of Intellectual Property, and invited public comments. The guidelines, which were issued in 1995, state the agencies’ antitrust enforcement policy with respect to the licensing of intellectual property protected by patent, copyright, and trade secret law and of know-how. The guidelines remain solidly grounded in three basic principles: the same antitrust analysis is applied to conduct involving intellectual property as to conduct involving other forms of property; intellectual property is not presumed to create market power; and that intellectual property licensing allows firms to combine complementary factors of production and is generally procompetitive. Nevertheless, the agencies have determined that some revisions are in order because the IP Licensing Guidelines should accurately reflect intervening changes in statutory and case law. Comments will be accepted until September 26 at ATR-LPS-IP Guidelines.

Second Violation Triggers $480,000 Civil Penalty for Violating Premerger Notification Requirements

Investment trust Caledonia Investments plc has agreed to pay $480,000 in civil penalties to resolve allegations that it violated premerger reporting laws by failing to report its purchase in 2014 of voting shares in the helicopter services company Bristow Group. While Caledonia claimed the violation was inadvertent, the FTC sought civil penalties because Caledonia had previously violated the HSR Act in 1996.

FTC to Allow DVD Submission of Premerger Notification Notices

The FTC approved final amendments to the Hart-Scott-Rodino Premerger Notification Rules that allow HSR filings to be submitted on DVD and streamline the instructions to the Premerger Notification Form. These updates will make the process of submitting HSR filings easier, more efficient, and less burdensome. The amendments also update the instructions that apply to the HSR Form.

Consumer Protection and Privacy

I Works Billing Scheme Ringleader Agrees to Settle FTC Charges

The ringleader and two other defendants in the massive I Works online billing scheme have agreed to settle FTC charges that they took more than $280 million from consumers via deceptive “trial” memberships for bogus government-grant and money-making products. The FTC sued Johnson, I Works, and other entities in 2010, alleging that I Works enticed consumers to sign up for purportedly “free” or “risk free” trials but then charged them recurring monthly fees they never agreed to pay. The settling defendants agreed to a $280.9 million judgment, which represents consumers’ unreimbursed losses to the scheme, which will be partially suspended upon transfer to the FTC of all of Johnson’s frozen assets.

FTC Blog Post Outlines How NIST Cybersecurity Framework Relates to FTC Data Security Program

The FTC has published a new blog post providing guidance to businesses on how the cybersecurity framework created by the National Institute for Standards and Technology (NIST) aligns with the FTC’s data security program. The post notes that the NIST framework is not a checklist, but rather a method by which a company can identify risks and adjust its security efforts accordingly to ensure they are as effective as possible, which is consistent with the FTC’s focus on reasonable data security. The blog concludes that applying both the risk management approach presented by the framework and the FTC’s Start with Security guidance will lead to businesses providing more robust protections for consumers’ data.

FTC Charges India-Based Academic Journal Publisher OMICS Group Deceived Researchers

The FTC has charged the U.S.-incorporated, India-based publisher of hundreds of purported online academic journals with deceiving academics and researchers. The FTC’s complaint alleges that OMICS Group, Inc., along with two affiliated companies, all based in India, and their president and director, Srinubabu Gedela, falsely claim that their journals follow rigorous peer-review practices. They also claim the journals have editorial boards made up of prominent academics, although numerous individuals represented to be editors have not agreed to be affiliated with the journals. According to the FTC’s complaint, OMICS does not tell researchers that they must pay significant publishing fees until after it has accepted an article for publication, and often will not allow researchers to withdraw their articles from submission. This makes the research ineligible for publication in another journal because academic ethics standards generally forbid researchers from submitting the same research to more than one journal.

In Other News

FTC Announces Agenda for Economic Conference on Marketing and Consumer Protection

The FTC has announced the agenda and panelists for its Economic Conference on Marketing and Consumer Protection in Washington, DC, on September 16, 2016, co-sponsored by the INFORMS Society of Marketing Science. The agenda and other detailed information about the conference can be found on the event webpage.

FTC and USDA to Host Roundtable in Washington, D.C. in October to Examine Consumer Perceptions of “Organic” Claims for Non-Agricultural Products

The FTC and the U.S. Department of Agriculture (USDA) will co-host a roundtable in Washington, D.C. on October 20 to help the agencies better understand how consumers perceive “organic” claims for non-agricultural products, such as personal care products. Invited panelists, including consumer advocates, industry representatives, and academics, will discuss consumers’ interpretations of “organic” claims for products and services outside the scope of the USDA Agricultural Marketing Service’s National Organic Program, a recent FTC-USDA study on organic claims, and approaches to address potential deception, including consumer education. The Commission will publish a detailed agenda at a later date.

FTC Staff Tells State Regulator that Proposal to Expand Telehealth Services Could Benefit Consumers

FTC staff submitted a comment to the Delaware Board of Dietetics/Nutrition regarding its proposed telehealth regulation that would require in-person initial evaluations of patients, and then allow licensed dietitians and nutritionists to determine whether to use telehealth thereafter. The FTC staff said that by allowing licensed dietitians/nutritionists to determine whether telehealth is an appropriate level of care for a patient, the proposed regulation could promote the use of telehealth, potentially enhancing competition in the provision of nutrition services as well as reducing patient travel costs. However, because the proposed regulation also would require that all initial evaluations be conducted in person, it may unnecessarily discourage the use of telehealth and restrict consumer choice.

FTC Approves Energy Labeling Rule Changes and Seeks Comment on Others

Energy graphic

The FTC has approved Energy Labeling Rule amendments to improve access to energy labels online and improve labels for refrigerators, ceiling fans, central air conditioners, and water heaters. The Rule requires yellow EnergyGuide labels on certain appliances to help consumers compare similar models. The labels provide estimated annual operating cost and an energy consumption rating, and a range for comparing the highest and lowest energy consumption for all similar models. In addition to these amendments, the Commission seeks comment on a proposal to eliminate certain marking provisions for plumbing products as well as new labeling for portable air conditioners, large-diameter and high-speed small-diameter ceiling fans, and instantaneous electric water heaters. Comments must be received by November 14.

FTC Seeks Comment on Safeguards Rule

The FTC is seeking public comment on Standards for Safeguarding Customer Information (the “Safeguards Rule”). The Safeguards Rule, which took effect in 2003, requires financial institutions to develop, implement, and maintain a comprehensive information security program for handling customer information. The FTC seeks comments on a number of questions, including the economic impact and benefits of the Rule, possible conflict between the Rule and state, local, or other federal laws or regulations, and the effect on the Rule of any technological, economic, or other industry changes. The Federal Register Notice, which contains instructions for filing comments, will be published shortly. Comments must be received by November 7.