FTC International Monthly - July

The FTC sued Walmart for allowing its money transfer services to be used by fraudsters who fleeced consumers out of hundreds of millions of dollars. In its lawsuit, the FTC alleges that for years the company failed to properly secure the money transfer services offered at Walmart stores. The company did not properly train its employees, failed to warn customers, and used procedures that allowed fraudsters to cash out at its stores, according to the FTC’s complaint. The FTC is asking the court to order Walmart to return money to consumers and to impose civil penalties for Walmart’s violations.

As Energy Prices Rise, FTC Prevails in Deceptive Energy-Efficiency Case

In response to legal action by the FTC, the U.S. District Court for the Middle District of Florida ordered SPM Thermo-Shield, Inc. to permanently halt deceptive energy-efficiency claims it has been making about wall coating products that it sells for houses and other buildings. The court issued a permanent injunction prohibiting SPM Thermo-Shield and its officers from misrepresenting the coatings’ insulating or energy-saving capabilities.

FTC Report Warns About Using AI To Combat Online Problems

The FTC issued a report to Congress warning about using artificial intelligence  to combat online problems and urging policymakers to exercise “great caution” about relying on it as a policy solution. The use of AI, particularly by big tech platforms and other companies, comes with limitations and problems of its own. The report outlines significant concerns that AI tools can be inaccurate, biased, and discriminatory by design and incentivize relying on increasingly invasive forms of commercial surveillance. In legislation enacted in 2021, Congress directed the Commission to examine ways that AI “may be used to identify, remove, or take any other appropriate action necessary to address” several specified “online harms.” 

FTC Takes Action To Protect Pet Owners from Private Equity Firm’s Rollup of Veterinary Services Clinics

The FTC took action against JAB Consumer Partners to prevent the private equity firm from further consolidating control over specialty and emergency veterinary clinics. As a condition of JAB’s proposed $1.65 billion acquisition of the parent company of veterinary clinic owner Ethos, the FTC ordered the firm to divest clinics in Richmond, Denver, San Francisco, and the Washington, D.C area. The Commission also imposed strong prior approval and prior notice requirements on both JAB and its divesture buyers for future acquisitions of specialty and emergency veterinary clinics.

OIA Director Randy Tritell Departs from FTC 

Randy Tritell, Director of the Office of International Affairs since it was established in 2007, departed the FTC at the end of last month following two stints totaling over thirty-two years at the agency.  Prior to rejoining the FTC in 1998, Randy was in private practice in New York and in Brussels and, before that, at the FTC as a Bureau of Consumer Protection staff lawyer, Assistant to the Director of BCP, Attorney Advisor to Commissioner Terry Calvani, and Executive Assistant to the Chairman.  Maria Coppola has been appointed as OIA’s Acting Director.

FTC Takes Action Against Harley-Davidson, Westinghouse and Weber for Manufacturer Warranties That Illegally Restrict Customers’ Right To Repair

The FTC filed complaints against motorcycle manufacturer Harley-Davidson Motor Company Group, LLC, Westinghouse outdoor generator maker MWE Investments, LLC, and grill maker Weber-Stephen Products, LLC, for illegally restricting customers’ right to repair their purchased products. The FTC’s complaints charge that the companies’ warranties included terms that conveyed that the warranty is void if customers use independent dealers for parts or repairs. The FTC is ordering the parties to fix their warranties by removing illegal terms and recognizing the right to repair, and come clean with customers about their ability to use third party parts and independent dealers for repairs.

The FTC announced that it will ramp up enforcement against any illegal bribes and rebate schemes that block patients’ access to competing lower-cost drugs. The enforcement policy statement puts drug companies and prescription drug middlemen on notice that paying rebates and fees to exclude competitors offering lower-cost drug alternatives can violate competition and consumer protection laws. The agency will use its full range of legal authorities to combat illegal prescription drug practices that foreclose competition and harm patients. The FTC is concerned that rebate practices may be driving up the list price of insulin, a life-saving treatment for the roughly 8 million Americans who rely on it to control their diabetes. The list price of insulin has soared over the last two decades, increasing by over 300 percent.