News from the Federal Trade Commission - January 2016

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Penn Corner

$100 Million for LifeLock Violation

LifeLock

LifeLock agreed to settle charges that it violated a 2010 FTC settlement order. According to the FTC, the company failed to establish and maintain a comprehensive information security program to protect people’s sensitive personal information – including credit card, Social Security, and bank account numbers. The FTC also alleges LifeLock falsely advertised that it protected people’s data with the same safeguards as financial institutions, and that it would send alerts to people as soon as they received any indication that they may be a victim of identity theft. LifeLock is paying $100 million to provide refunds for people affected by the company’s order violations.

Lumosity’s Deceptive Brain Game

Lumosity

Lumosity agreed to settle FTC charges that it made deceptive advertising claims for its online brain training games. According to the FTC, Lumosity claimed its games were based on “proven neuroscience research,” and could help improve memory, attention, problem solving skills, and prevent age-related memory decline – including dementia and Alzheimer’s disease. The FTC says there isn’t solid science showing that Lumosity’s brain training games would sharpen memory or brain power.

Oracle Settles Over Java Updates

Java

Oracle agreed to settle FTC charges that it deceived people about the security of its Java software updates. According to the FTC, for years, updating to a new version of Java didn’t automatically remove all the old versions. Even after Oracle changed this practice, Java updates removed only the most recent version, leaving computers with multiple outdated versions. The issue? Earlier versions of Java had serious security risks that hackers could exploit to steal login information for people’s financial accounts, and to gather other sensitive information. The settlement requires Oracle to notify users about the problem and provide tools to fix it.

Hospital Merger Challenged

hospital

The FTC sued to block the proposed merger of two Chicago-area hospitals, Advocate Health Care Network and NorthShore University HealthSystem, charging that it would create the largest hospital system in the North Shore area of Chicago. According to the FTC, the combined entity would control more than 50 percent of the general acute care inpatient hospital services, and likely result in higher healthcare costs and fewer incentives to upgrade services and improve quality.

                                

"This settlement demonstrates the Commission’s commitment to enforcing the orders it has in place against companies, including orders requiring reasonable security for consumer data. The fact that consumers paid LifeLock for help in protecting their sensitive personal information makes the charges in this case particularly troubling."

— FTC Chairwoman Edith Ramirez

Kids’ Apps Get Personal

Two app developers, LAI Systems, LLC and Retro Dreamer, agreed to settle FTC charges that they created kid-directed apps that allowed third-party advertisers to collect personal information using persistent identifiers – pieces of data tied to a user or electronic device. According to the FTC, the app developers didn’t tell the ad networks that the apps were directed to children, or require them to follow COPPA requirements. The FTC says the companies didn’t notify parents or get their permission before collecting and using kids’ information – another COPPA requirement.

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