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March 2023
Highlights
The FTC Is Accepting Nominations for the September Class of Its International Fellows Program
The FTC is currently accepting applications from counterpart agencies around the world for its International Fellows Program. International Fellows work alongside staff of the Bureaus of Competition, Consumer Protection, and Economics, and the Office of Policy Planning. Since the program’s inception in 2007, 132 international colleagues from 41 jurisdictions have had an opportunity to work with FTC attorneys, economists, and investigators as International Fellows or Interns, gaining first-hand experience of how the FTC carries out its enforcement and policy work. The FTC Office of International Affairs is now accepting applications for September 2023. If you would like to apply or nominate someone from your agency, please email Michael Shore (mshore@ftc.gov) for more information.
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Consumer Protection and Privacy
The FTC has issued a proposed order banning online counseling service BetterHelp, Inc. from sharing consumers’ health data, including sensitive information about mental health challenges, for advertising. The proposed order also requires the company to pay $7.8 million to consumers to settle charges that it revealed consumers’ sensitive data to third parties such as Facebook and Snapchat for advertising after promising to keep such data private. BetterHelp offers online counseling services under several names, including BetterHelp Counseling, Faithful Counseling focused on Christians, Teen Counseling, which caters to teens and requires parental consent, and Pride Counseling, which is targeted to the LGBTQ community.
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The FTC has brought lawsuits against three current and former high-level distributors – so-called “Wellness Advocates” – of the multi-level marketing company doTERRA International, LLC, for making claims that the company’s essential oils and dietary supplements could treat, prevent, or cure COVID-19. The distributors, all current or former healthcare practitioners, made the claims in a series of webinars in early 2022 and touted their medical expertise in recommending the products. The three complaints, filed by the Department of Justice on behalf of the FTC, allege that the defendants made numerous claims in violation of the FTC Act and the COVID-19 Consumer Protection Act.
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FTC staff sent 24 cease and desist letters to eye care prescribers after receiving complaints claiming that the prescribers failed to comply with the Contact Lens Rule. Some letters also cited potential violations of the Ophthalmic Practice Rules (known as the Eyeglass Rule). These rules ensure consumers the right to comparison shop for prescription lenses. Some letters addressed complaints that prescribers were improperly responding to third-party seller requests to verify or provide contact lens prescription information. Prescribers are obligated, if prescription information is inaccurate, expired, or otherwise invalid, to specify the basis for the inaccuracy or invalidity of the prescription and, if it is inaccurate, to correct it. Prescribers also must provide the prescription (or indicate that it is no longer current or valid) within forty business hours of receipt of a request. For more details of potential violations, click on the headline above. The letters warn the prescribers that violations of the Contact Lens Rule or Eyeglass Rule may result in legal action, including civil penalties of up to $50,120 per violation.
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The FTC sued to stop an interconnected web of operations responsible for delivering tens of millions of unwanted Voice Over Internet Protocol (VoIP) and ringless voicemail (RVM) phony debt service robocalls to consumers nationwide. The Department of Justice (DOJ) filed the complaint in federal court on the FTC’s behalf. According to the complaint, Stratics Networks, Inc.’s outbound calling service enabled its clients to route and transmit millions of robocalls using VoIP technology. For further details and defendants, click the headline above.
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Competition
The FTC and the Justice Department organized and hosted a workshop on competition advocacy for the Asia-Pacific Economic Cooperation’s (APEC) Competition Policy and Law Group to build on the APEC 2023 priorities, including promoting competitive markets throughout the Asia-Pacific region and fostering cooperation across APEC’s 21 economies in service of this goal. In addition to the workshop, the United States will host APEC Senior Officials Meetings in Detroit (May 2023) and Seattle (August 2023), as well as APEC’s Economic Leaders’ Week in San Francisco (November 2023).
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The FTC is taking action to block the proposed merger between the largest U.S. provider of home mortgage loan origination systems and other key lender software tools, Intercontinental Exchange, Inc. (ICE), and its top competitor, Black Knight, Inc. The FTC alleges that the deal would drive up costs, reduce innovation, and reduce lenders’ choices for tools necessary to generate and service mortgages. Black Knight proposed to remedy the competitive harm resulting from the proposed deal by selling its Empower loan origination system (LOS) and some related services to a technology company, Constellation Web Solutions, Inc. According to the complaint, the proposal does not address the anticompetitive effects in the market for PPE software and would not replace the intense competition between ICE and Black Knight in the LOS market.
SUNY Upstate Medical University and Crouse Health System, Inc. abandoned their proposed merger. FTC staff had an active investigation into the effects of the proposed merger. In its comment to the New York State Department of Health, the FTC voiced opposition to a request by SUNY Upstate Medical University and Crouse Health System for a certificate of public advantage, also known as a COPA, which could have shielded the merger from antitrust laws. According to the agency, the merged entity would have had a combined share of nearly 67 percent of commercially insured inpatient hospital services in Onondaga County, and the proposed merger would have reduced the number of hospital options available for nearly all patients from three to two.
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The FTC ordered manufacturing company Anchor Glass Container Corp. to drop noncompete restrictions that it imposed on more than 300 workers. In a complaint filed against Anchor and its owners, the FTC said Anchor illegally imposed one-year noncompete restrictions that constituted an unfair method of competition under Section 5 of the FTC Act. The agency’s order bans Anchor from entering into, maintaining, enforcing or attempting to enforce, or threatening to enforce noncompete restrictions on relevant workers. For the next 10 years, Anchor must provide a clear and conspicuous notice to any new relevant employees that they may freely seek or accept a job with any company or person, run their own business, or compete with Anchor at any time following their employment.
In Other News
The FTC will host a workshop on May 23 in Washington, DC to examine “recyclable” advertising claims as part of its recently announced review of the Guides for the Use of Environmental Marketing Claims, commonly known as the Green Guides. The workshop, Talking Trash at the FTC: Recyclable Claims and the Green Guides, is free and open to the public, and pre-registration is not required. According to the Federal Register notice, the half-day event will cover topics including: the current state of recycling practices and recycling-related advertising in the United States, consumer perception of current and emerging recycling-related claims, and the need for any updates or other changes to the Green Guides related to recycling claims. The event likely will include panels on these subjects, and a more detailed agenda will be published in the coming months.
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Newly released FTC data shows that consumers reported losing nearly $8.8 billion to fraud in 2022, an increase of more than 30 percent over the previous year. Consumers reported losing more money to investment scams—more than $3.8 billion—than any other category in 2022. That amount is more than double the amount reported lost in 2021. The second highest reported loss amount came from imposter scams, with losses of $2.6 billion reported, up from $2.4 billion in 2021. The FTC received fraud reports from 2.4 million consumers last year, with the most commonly reported being imposter scams, followed by online shopping scams. Prizes, sweepstakes, and lotteries; investment related reports; and business and job opportunities rounded out the top five fraud categories. For detailed data and infographics, click the headline above.
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The FTC and the Consumer Financial Protection Bureau are requesting comment on background screening issues affecting individuals who seek rental housing in the United States, including how the use of criminal and eviction records and algorithms affect tenant screening decisions and may be driving discriminatory outcomes. Renters are facing a range of challenges, from rising rents to a shortage of affordable rental housing. The FTC and CFPB are seeking information on background screening practices and their potential effect on people’s ability to obtain rental housing as part of a whole-of-government effort to address these issues. The public will have 90 days to submit comments at Regulations.gov. Once submitted, comments will be posted to Regulations.gov.
The FTC is requesting comment on franchise agreements and franchisor business practices, including how franchisors may exert control over franchisees and their workers. The FTC would like to know more about how franchisors may exert control over franchisees and their workers. Specifically, the FTC is interested in how franchisors disclose certain aspects and contractual terms of the franchise relationship, as well as the scope, application, and effect of those aspects and contractual terms. For details of the issues to be explored, click on the headline above.
The FTC voted to extend until April 19 the public comment period for its proposed new rule to ban employers from imposing noncompetes on their workers. The proposed rule, announced by the FTC in January, is based on a preliminary finding that noncompetes constitute an unfair method of competition and therefore violate Section 5 of the FTC Act.
The FTC submitted to Congress its Fiscal Year 2024 budget request, in support of the President’s FY 2024 budget for the federal government. The budget request also includes the Performance Plan for FY 2023 and FY 2024 and Performance Report for FY 2022, as required under the GPRA Modernization Act of 2010. The budget reflects an ongoing effort to right-size the Bureau of Competition and the three regional offices in which it has a presence, to accommodate marked increases in workload. The budget would add staff to BCP’s division and regional offices to increase the FTC’s ability to litigate larger and more complex cases in areas such as privacy and data security, financial and marketing practices, national advertising, and practices targeting specific populations.
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The FTC and its partners, including consumer organizations, national advocacy organizations, and other federal, state, and local government agencies, participated in virtual and in-person events to promote consumers’ rights and protections against fraud, scams, and identity theft as part of National Consumer Protection Week. The FTC and partners hosted and participated in town halls, roundtables, Twitter chats, webinars, and other events focused on helping people understand their consumer rights and avoid fraud, scams, and identity theft. For details and more information, click the headline above.
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