MARCH 2014
Conferences Highlight FTC Contributions to the Development of Antitrust Policy and Current International Antitrust Enforcement Challenges
George Mason University Law School held two symposia highlighting the FTC’s history and current international antitrust perspectives. On February 13, in commemoration of the FTC’s centennial, the Law School held an antitrust symposium focusing on the FTC’s unique contributions to the development of antitrust policy. The symposium featured an opening keynote address by Chairwoman Edith Ramirez and panel discussions in which each of the current Commissioners, several former FTC Chairs, and practitioners participated. Topics included intellectual property and antitrust, mergers, state and professional restraints, and FTC Act Section 5 policy. On February 14, in cooperation with the FTC, the Law School hosted a symposium for international competition enforcers to discuss procedural fairness, the interplay between competition and other considerations in antitrust enforcement, competition advocacy, and the role of economics.
Antitrust Officials from the United States, Canada, and Mexico Participate in Trilateral Meeting to Discuss Antitrust Enforcement
On February 13, the heads of the antitrust agencies of the United States, Canada, and Mexico met in Washington DC to discuss their mutual efforts to ensure continued effective antitrust enforcement cooperation in North America’s increasingly interconnected markets. The discussions covered a wide range of topics, including recent enforcement developments, cooperation and mutual support, and priority setting and efficiency in resource-constrained environments.
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FTC Settles Charges That Endo Health Solutions’ Acquisition of Boca Life Science Holdings Would Be Anticompetitive
On January 31, pharmaceutical companies Endo Health Solutions Inc. (Endo) and Boca Life Science Holdings, LLC and Boca Pharmacal, LLC (Boca) agreed to a settlement of FTC charges that Endo’s acquisition of Boca would be anticompetitive. Under the settlement, the companies will relinquish their rights to market and distribute four generic multivitamin fluoride drops for children, and will sell three other generic drugs in development. According to the FTC’s complaint, Endo’s acquisition of Boca likely would have caused U.S. consumers to pay significantly higher prices for these generic drugs and would have eliminated one firm from a very limited pool of future entrants in each of the three other generic drug markets.
FTC Consumer Sentinel Data Book Documents $1.6 Billion in Losses Reported via Consumer Complaints in 2013; ID Theft Comprises 14 Percent of the 2 Million Complaints
American consumers lost $1.6 billion to fraud in 2013, according to complaints documented in the FTC’s annual fraud report released February 27. Of the more than two million complaints received, identity fraud continued to be the most prevalent type of fraud reported, according to the Consumer Sentinel Network Data Book 2013. The FTC website contains tips to prevent or mitigate ID theft. FTC consumer education materials on ID theft include Signs of Identity Theft, Immediate Steps to Repair Identity Theft, and How to Keep Your Personal Information Secure. Feel free to adapt any of these materials for use in your jurisdiction. The top 10 complaint categories are:
The FTC enters complaints into the Consumer Sentinel Network, a secure online database available to more than 2,000 civil and criminal law enforcement agencies in the United States, Canada, and Australia. Agencies use the data to develop evidence for cases, identify victims, and track possible targets. Consumers may file complaints online at the FTC website.
FTC Reiterates Unanimous Support for Data Security Legislation in Testimony Before Congress
The FTC stressed its ongoing efforts to promote data security during three recent Congressional hearings and reiterated its unanimous support for enactment of a strong federal data security and breach notification law. Chairwoman Edith Ramirez testified on February 4 before the Senate Judiciary Committee on Privacy In the Digital Age: Preventing Data Breaches and Combating Cybercrime. She also testified on February 5 before the House Energy and Commerce Committee, Subcommittee on Commerce, Manufacturing and Trade on Protecting Consumer Information: Can Data Breaches Be Prevented? Bureau of Consumer Protection Director Jessica Rich testified on February 3 before the Senate Banking Committee Subcommittee on National Security and International Trade and Finance on Safeguarding Consumers' Financial Data.
$ 21 Million Court Order Turns Lights Out on Misleading Bulb Claims
At the FTC’s request, a federal court has ordered a light bulb manufacturer and its owners to pay more than $21 million for consumer redress and other equitable relief for misleading consumers. The FTC had charged Lights of America Inc. and two individual defendants with exaggerating the performance of their LED light bulbs. The misrepresentations included overstating the light output and life expectancy of LED bulbs on packages and in brochures, and falsely comparing the brightness of the bulbs with that of other light bulbs. According to the FTC, the defendants initially claimed their LED lamps had a 30,000-hour life and lasted “15 times longer than 2,000 hour incandescent bulbs.” But in fact, the documents and data the defendants relied upon showed that none of their LED bulbs that were tested lasted beyond a few thousand hours. In addition to ordering redress that represents the total amount consumers paid, the court order prohibits the defendants from misrepresenting material facts about lighting products. The FTC has recently brought a number of actions involving environmental claims for products, so-called “green claims” including another action earlier this month involving a plastic lumber manufacturer’s claims for recycled content and recyclability. Whether environmental claims are about the product or the packaging, the FTC Green Guides advise that they often require competent and reliable scientific evidence to have a reasonable basis under the FTC Act. In addition to the text of the revised Green Guides, the FTC website features a summary and an explanatory video.
FTC Action Leads to Arrest Warrant for ‘Cash Grant Institute’ Robocaller Who Ignored Court Order to Pay More Than $20 Million in Penalties
A federal judge ordered the arrest and incarceration of a defendant who failed to pay $20 million in civil penalties – the largest civil penalty against a defendant in an FTC case. Paul Navestad, known legally as Paul Richard Jones, was ordered to pay the penalties and give up more than $1.1 million in ill-gotten gains for making millions of robocalls as part of a phony government grant scam. At the FTC’s request, the court found him in contempt for ignoring the order. Navestad is believed to be residing overseas. The court has ordered his arrest upon his return to the United States and his incarceration until he pays the money due.
FTC and FBI Warn Consumers and Businesses About New ‘Cryptolocker’ Malware That Locks Up Files and Holds Them for Ransom
The FTC, FBI, and other federal agencies are warning consumers and businesses about a malware program that locks up a victim’s files and holds them for ransom. The program, called “Cryptolocker,” is spread mostly through email and “drive-by” downloads. The email is disguised to look like a routine message from a legitimate company, like a tracking notice from a shipping company. Clicking on the hyperlink encrypts everything on the victim’s hard drive and in shared folders. Then, a “ransom note” appears, demanding payment via Bitcoin or some other anonymous payment method to provide the encryption key necessary to release the files. But as with any ransom payment, there is no guarantee the criminal will honor the bargain. FTC tips about how to protect against Cryptolocker are in a blog post entitled, Lock, stock, and peril. The FTC also has educational materials on good computer security habits that can help avoid downloading Cryptolocker and other malware. Additional materials are Back, back, back it up, and the video Protect Your Computer from Malware. The FTC has also warned recently of the use of fake funeral notices by malware scammers. As with all consumer and business education materials from the FTC, you should feel free to adapt any of these materials for use in your jurisdiction.
FTC to Host Public Workshop Examining U.S. Health Care Competition
On March 20-21, the FTC will host a free public workshop to examine competition issues related to certain current developments in the U.S. health care industry. The workshop will address five key topics related to health care competition: professional regulation of health care providers; innovations in health care delivery; advances in health care technology; measuring and assessing quality of health care; and price transparency of health care services. The workshop will be held at the FTC Conference Center at 601 New Jersey Ave., N.W., in Washington, DC; public comments are currently being accepted. Additional details and proposed questions can be found in the Federal Register notice announcing the event.
FTC to Host Seminar on Alternative Scoring Products
As part of a series of seminars examining the privacy implications of three new areas of technology, the FTC will host a seminar on Alternative Scoring Products on March 19, 2014. The seminar will explore privacy issues raised by new scoring products that many data brokers offer companies to predict trends and customer behavior. Consumers are largely unaware of these scores, and have little to no access to the data underlying them. But companies are using the scores to make a host of predictions, including: the likelihood that a person has committed identity fraud; the likelihood that a certain transaction will result in fraud; the credit risk of a mortgage application; whether contacting a consumer by mail or phone will lead to successful debt collection; whether sending a catalog to a certain address will result in an in-store or online purchase; the likelihood someone is taking his or her medication; and even whether a customer is pregnant and, if so, when the baby is due. The seminar will explore what scoring products are available now or are expected to be available in the future, how they are or will be used, their accuracy, and their benefits to consumers. It will consider privacy concerns and legal protections, including whether scoring products should trigger Fair Credit Reporting Act scrutiny. The seminar will be held from 10:00AM–12:00PM at the FTC Conference Center, 601 New Jersey Avenue, NW, Washington, DC 20001. It is open to public and will be webcast.
FTC to Host Roundtable on Proposed Changes to its Care Labeling Rule for Clothing
As part of the FTC’s systematic review of all current FTC rules and guides, the FTC will host a public roundtable in Washington, DC, on March 28, 2014, to analyze proposed changes to its Care Labeling Rule. The Rule requires manufacturers and importers to attach labels with care instructions for dry cleaning, washing, bleaching, drying and ironing of garments and certain piece goods.
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