JUNE 2021
The FTC is sending over $59 million to consumers who were victims of an allegedly deceptive scheme to thwart lower-priced generic competition with the branded drug Suboxone, used to treat opium addiction. According to the complaints, before the generic versions of Suboxone tablets became available, Reckitt Benckiser and a former subsidiary developed a dissolvable oral film version of Suboxone and worked to shift prescriptions to this patent-protected film. Reckitt and Indivior allegedly employed a “product hopping” scheme in which they misrepresented that the film version of Suboxone was safer than Suboxone tablets, suggesting that children are less likely to be accidentally exposed to the film product. The complaints also alleged that, to buy more time to move patients to the film version of Suboxone, Indivior filed a meritless citizen petition with the FDA reciting the same unsupported safety claims and requesting that the agency reject any generic tablet applications.
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In the wake of the European Commission’s announcement that it is investigating Illumina’s $7.1 billion proposed acquisition of DNA sequencing provider GRAIL, a Federal Court agreed to an FTC request to dismiss its federal court complaint for a preliminary injunction and temporary restraining order without prejudice to its ability to seek an injunction later if necessary. The FTC will proceed with an administrative trial, scheduled to begin on August 24, regarding allegations that the vertical merger would harm competition in the U.S. market for life-saving multi-cancer early detection tests.
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Following the parties’ completion of the 7-Eleven/Speedway merger, which involved the purchase of roughly 3,900 Speedway retail gasoline and convenience store businesses, FTC Acting Chairwoman Slaughter and Commissioner Chopra issued a statement. They said that the Commission will continue to investigate to determine an appropriate path forward to address resulting anticompetitive harm in local retail gasoline and diesel fuel markets, noting the parties closed the transaction at their own risk. Commissioners Phillips and Wilson issued a separate statement.
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The FTC, along with the attorneys general of six states, sued Internet service provider Frontier Communications, alleging that the company misrepresented the speeds subscribers to its Digital Subscriber Line (DSL) Internet service would receive. In many instances, Frontier promised consumers Internet speed tiers that it knew it could not provide to them based on physical factors, such as their residential addresses, and technical factors, such as low bandwidth. The complaint also alleges that Frontier unfairly charged many consumers for more expensive and higher-speed service than it delivered. Many consumers have complained that the slower speeds actually provided by Frontier failed to support the typical online activities they should have been able to perform at the speed tiers Frontier had sold to them.
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The operators of the MoviePass subscription service have agreed to settle FTC allegations they took steps to block subscribers from watching “one movie per day,” for a monthly fee of $9.95, as advertised, while also failing to secure subscribers’ personal data. The FTC’s complaint against the company outlines three concerns with the company’s practices: (1) illegal tactics that MoviePass employed to block subscribers from using the service as advertised (including blocking consumers from using their subscriptions once they reached a certain undisclosed threshold that was far fewer than the advertised “one movie per day” limit; 2) violations of the Restore Online Shoppers’ Confidence Act (ROSCA); and 3) MoviePass’s failure to take reasonable steps to secure subscribers’ personal information. The proposed settlement prohibits Movie Pass from misrepresenting any product or service in the future. It also requires Movie Pass and associated companies and officers to implement a comprehensive security program in any business it controls directly or indirectly. Both MoviePass and its parent company, Helios, have filed for bankruptcy. The Commission voted 3-1 to issue the administrative complaint and to accept the proposed consent agreement.
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The FTC has joined the U.S. Food and Drug Administration (FDA) in sending warning letters to five U.S. companies that may be making false or unsubstantiated claims that their products can cure, treat, mitigate, or prevent infertility and other reproductive disorders in violation of the FTC Act, and that are unapproved and misbranded. The letters remind the companies of their obligation under the FTC Act to have competent and reliable scientific evidence – which, depending on the circumstances, may mean well-controlled human clinical testing – to support advertising claims that a product can prevent, treat, or cure a disease. That includes both express misrepresentations as well as exaggerations, whether conveyed directly or indirectly through use of a product name, website, metatags, or other means. The letters require the companies to respond swiftly to the FTC with the steps they have taken to address the concerns about their possibly deceptive claims to avoid possible civil penalties or other monetary remedies.
There’s still time to register for the OECD’s “Consumer Marketplace of the Future,” featuring FTC Acting Chairwoman Rebecca Kelly Slaughter and other prominent speakers from the United States and around the world. Through interactive components and thought-provoking discussions, participants will look back at 50 years of consumer policy at the OECD and help shape an agenda for consumer protection in a global, digital future. Registration information and the agenda are available through the link above.
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The FTC submitted to Congress its Fiscal Year 2022 budget request, in support of the President’s FY 2022 budget for the federal government. The budget request also includes the FY 2022 Budget Overview Statement, Performance Plan for FY 2021 and FY 2022, and Performance Report for FY 2020.
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Lehigh Cement Company abandoned its $151 million acquisition of rival Pennsylvania-based cement producer Keystone Cement Company after the FTC took action to block the transaction, alleging the deal would harm regional competition in the market for the key ingredient used to make concrete.
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