FTC International Monthly - October

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



Board of Dental Examiners

Alabama Board of Dental Examiners Settles Charges That It Unreasonably Excluded Lower Cost Online and Teledentistry Providers from Competition

To settle FTC charges that its actions violated the antitrust laws, the Board of Dental Examiners of Alabama agreed to stop requiring on-site supervision by licensed dentists of alignment scans of prospective patients’ mouths seeking to address misaligned teeth or gaps between teeth.  Dental hygienists and other non-dentist practitioners routinely administer these scans.  The Dental Board’s decision limited consumer choice and excluded new providers in the state of Alabama.  Further details about the proposed consent order – which the Board is required to share with members, employees, certain dentists, and clear aligner platforms – are set forth in the analysis to aid public comment.

FTC To Make the Second Request Process More Streamlined and Rigorous

Given the recent surge in merger filings and the FTC’s obligation to protect Americans from illegal transactions, the Bureau of Competition is instituting new process reforms to best to use its limited resources.  In a recent blog post, Holly Vedova, Director of the Bureau of Competition, describes these changes.  First, the FTC is seeking to ensure that merger reviews are more comprehensive and analytically rigorous.  Second, staff will consider requests for modifications only after the companies under investigation have provided certain foundational information.  Third, the FTC’s second requests will now require each company under investigation to provide information about how it intends to use e-discovery tools before it applies those tools to identify responsive materials.  Fourth, the Bureau is aligning its practice with respect to privilege logs more closely with the Department of Justice’s practice.  Finally, the FTC has adopted a new internal practice to ensure that second requests and other requests for information are securely accessible to all Commissioners and relevant agency offices.  These reforms build on other enhancements the Bureau announced in an August blog post.

Consumer Protection and Privacy

FTC Puts 700 Advertisers on Notice About Fake Reviews and Other Misleading Endorsements; Also Puts For-Profit Colleges on Notice of False Promise Crackdown

In response to an explosion in deceptive endorsements across the marketplace, especially in social media, the FTC has issued “Notices of Penalty Offenses” to 700 large companies, top advertisers, leading retailers, well-known consumer product companies, and major advertising agencies.  The Notices warn the recipients that they could incur significant civil penalties ‒ up to $43,792 per violation ‒ if they use endorsements to deceive consumers.  A “Notice of Penalty Offense,” issued under the FTC Act, allows the agency to seek civil penalties against a company that engages in conduct that it knows has been found unlawful in a previous FTC administrative order, other than a consent order.

Block quote on fake reviews and deceptive endorsements

The Notice sent to the companies outlines a number of practices that the FTC determined to be unfair or deceptive in prior administrative cases.  For example, it reminds advertisers that they cannot:

  • misrepresent that an endorser is an actual, current, or recent user of a product
  • misrepresent that endorsers’ experiences represent people’s typical experiences
  • use an endorsement without good reason to believe the endorser still holds the views expressed
  • use an endorsement to make deceptive claims about how a product performs; or
  • fail to disclose an unexpected relationship between the endorser and the advertiser, like a business or family relationship, a payment, or a gift of a free product.

The Notice makes clear that these rules apply not only to a company’s own ads but also to its use of influencers, fake reviews, and reviews by customers with connections to the company.  For details, including a list of recipients, click here.  A recipient’s presence on this list does not in any way suggest that it has engaged in deceptive or unfair conduct.  The Commission also used its penalty offense authority to remind for-profit higher education institutions that they face significant civil penalties if they make certain education-related misrepresentations.  For details, click here.

U.S. Capitol

FTC Testifies Before the Senate Special Committee on Aging About the Agency’s Work To Halt Practices That Prey on Older Americans

Testifying on behalf of the FTC before the Senate Special Committee on Aging, Lois C. Greisman, Director of the FTC’s Division of Marketing Practices, said that during 2020 older consumers filed 334,411 fraud reports in the Consumer Sentinel database, with reported losses of more than $600 million.  Because the vast majority of frauds are not reported to the government, these numbers represent only a fraction of the older adults harmed by fraud.  In the past year the FTC brought at least thirteen new law enforcement actions that had a notable impact on older adults.  The testimony reiterated the FTC’s call to restore its ability to recover money to provide refunds to people harmed by deceptive, unfair, or anticompetitive conduct in the aftermath of the Supreme Court’s decision earlier this year in AMG Capital Management LLC v. FTC.

In Other News

FTC Chair Lina M. Khan Appoints Directors of Bureau of Competition and Bureau of Consumer Protection

FTC Chair Lina M. Khan announced that she has appointed Holly Vedova as Director of the agency’s Bureau of Competition and Samuel A.A. Levine as Director of the Bureau of Consumer Protection.  Ms. Vedova and Mr. Levine have been serving in their roles in an acting capacity since June of this year.  Vedova joined the FTC in 1990 and served most recently as an attorney advisor to Commissioner Rohit Chopra.  She has been an attorney advisor to four other FTC commissioners, and also served as counsel to the Director of the Bureau of Competition.  Vedova holds a J.D. from George Mason University School of Law.  Levine moves to lead the Bureau of Consumer Protection following work first in the FTC’s Midwest Regional office and then as an attorney advisor to Commissioner Chopra.  He holds a J.D. from Harvard Law School.

FTC and DOJ Issue Joint Statement To Preserve Competition in Post-Hurricane Relief Efforts

The FTC and DOJ’s Antitrust Division issued a joint statement detailing antitrust guidance for businesses taking part in relief efforts and those involved in rebuilding communities affected by Hurricane Ida without violating the antitrust laws.  Among other actions, the Department of Justice will criminally prosecute companies that fix prices, rig bids, or allocate customers, and the FTC will investigate and take action against companies and individuals who violate the consumer protection laws.