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OCTOBER 2022
Highlights
FTC Chair Lina M. Khan testified before the Senate Committee on the Judiciary’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights. The FTC testimony presented to the Subcommittee describes the work the agency is doing to ensure robust antitrust enforcement that fully accounts for the harm that anticompetitive mergers and conduct cause to honest businesses, workers, and consumers. The FTC’s testimony details how the agency has taken many steps to vigorously enforce the law over the past year, including challenges to major transactions in semiconductor, defense, energy, healthcare, and digital markets. The testimony also describes the measures the Commission has undertaken to update its enforcement tools consistent with the full set of authorities that Congress provided the agency. The testimony notes that the Commission is also prioritizing action against business practices that unlawfully restrict consumers’ ability to repair their products, costing them more over the long term. The Commission is also closely scrutinizing the growing use of non-compete clauses throughout the economy. The agency is committed to working with Congress to ensure it has the resources and tools it needs to protect the American people from anticompetitive mergers and conduct.
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Competition
The FTC and a bipartisan coalition of 10 state attorneys general filed a complaint in federal court against pesticide manufacturers Syngenta Crop Protection and Corteva, Inc. for allegedly paying distributors to block competitors from selling their cheaper generic products to farmers. The complaint alleges that these big pesticide firms run so-called “loyalty programs” in which distributors only get paid if they limit business with competing manufacturers. According to the complaint, cutting off competition has allowed the defendants to inflate their prices and force American farmers to spend millions of dollars more for their products. The complaint seeks to shut down this illegal pay-to-block scheme and restore competition to affected markets.
San Juan IPA, an independent physician association in New Mexico, has agreed to pay a $263,000 civil penalty to the FTC to settle allegations that it violated a 2005 consent order. The FTC’s 2005 case against San Juan IPA alleged that it orchestrated agreements among competing member physicians to coordinate joint pricing. To remedy these allegations, the 2005 order prohibited San Juan from, among other things, entering into, maintaining, enforcing, or facilitating any agreement or understanding among any physicians. The FTC alleges that San Juan violated the 2005 order. Consent orders have the force of law, and the FTC will move swiftly to impose penalties for violations of those orders.
Consumer Protection and Privacy
The FTC and the California Department of Financial Protection and Innovation (DFPI) are taking action against various companies doing business as Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America, and the owners of the companies, for operating a sham mortgage relief operation that misled consumers and cost them millions. The FTC and DFPI allege that the companies charged consumers thousands of dollars with false promises they would negotiate with consumers’ mortgage lenders to alter their loans, at times even representing they were affiliated with government COVID-19 relief programs. A federal court has temporarily shut down the operation and frozen the assets of the defendants.
The FTC won a court order against F & G International Group Holdings, LLC, FG International, LLC, (FGI) and their principal J. Glenn Davis after suing the company and its CEO for deceptively claiming their paint insulates, when it does not. The order from the US Court for the Southern District of Georgia permanently bans FGI from making deceptive claims and prohibits them from supporting similar deception from other companies.
“At a time of high energy prices and deep concern about inflation, today’s ruling shows the impact FTC cases are having on issues of vital economic importance to American consumers,” said Sam Levine, Director of the FTC’s Bureau of Consumer Protection.
In Other News
The FTC released the final agenda for its October 19 virtual kids digital advertising event that will explore how best to protect children from a growing array of marketing practices that make it difficult or impossible for children to distinguish ads from entertainment in digital media. The event, Protecting Kids from Stealth Advertising in Digital Media, will examine the current kids digital advertising landscape, its impact on children, and whether current legal and regulatory regimes are equipped to protect children from potential harms.
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FTC Chair Lina M. Khan and AAG Jonathan Kanter participated in the G7 Joint Competition Policy Makers & Enforcers Summit as part of the 2022 G7 Digital and Technology Track. The Summit, hosted by the German Bundeskartellamt and Ministry for Economic Affairs and Climate Action, explored how G7 governments are approaching competition policy and enforcement in digital markets. In preparation for the Summit, the participating agencies contributed to the “Compendium of Approaches to Improving Competition in Digital Markets,” with highlights from G7 competition authority’s work on digital markets, and the Policy Makers Inventory of legislative approaches to competition in digital markets within the G7 was also presented.
FTC Chair Lina M. Khan, AAG Jonathan Kanter, and the EC’s EVP Margrethe Vestager held the second principals’ meeting of the US-EU Joint Technology Competition Policy Dialogue (TCPD). The high-level discussion focused on several topics, including the importance of horizon scanning to identify key technologies and issues that may raise competition concerns in the future, the adoption of effective remedies in digital cases, and the forthcoming update to the US merger guidelines.
Following a public comment period, the FTC has updated its Energy Labeling Rule in order to allow consumers to more accurately compare the estimated annual energy consumption of appliances before they buy them. The Rule requires that manufacturers attach labels to major home appliances and other consumer products that help consumers compare the energy usage and costs of competing models. After reviewing the comments received, the FTC is now finalizing updates to the rule as proposed, with two changes. First, the Commission will wait to update the comparability rate for televisions until after the Department of Energy completes test procedure changes. Second, the Commission has set the effective date for room air conditioner labels to coincide with the 2023 production cycle, to help ensure an orderly transition for the manufacturers of these appliances.
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FTC Chair Lina M. Khan announced the appointment of two new senior agency leaders: Chief Technology Officer Stephanie Nguyen and Public Affairs Director Douglas Farrar. Nguyen has been named Chief Technology Officer after having served in the role in an acting capacity since October 2021. Prior to her tenure at the FTC, Nguyen worked at the US Digital Service at the White House and as a research scientist at the Massachusetts Institute of Technology. Nguyen holds an MPP from Harvard Kennedy School and earned her B.A. in Digital Media Theory & Design from the University of Virginia. Farrar comes to the FTC from the Carnegie Endowment for International Peace, where he was vice president of communications and strategy. Previously, Farrar was assistant director of communications at the Aspen Institute and a communications and legislative aide in the US House of Representatives.
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