Regulation

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As we’ve described here, the Senate made major strides last year on legislation to protect children’s privacy and safety online. Indeed, two bipartisan bills sailed through a Commerce Committee markup, though they didn’t ultimately make it to the floor for a Senate vote. This year, kids’ privacy is once again getting attention, beginning with a February 14 Senate Judiciary Committee hearing on the issue. Members used the hearing to tout last year’s bills and mention some new ones, too. They also touched on other top-of-mind issues involving the tech industry, such as Section 230 reform and encryption.   

Of note, Senators Blumenthal and Blackburn discussed the Kids Online Safety Act (KOSA) (their bill from last year, just re-introduced), which would impose a “duty of care” on tech companies and shield young people from harmful content. Senator Hawley, in turn, talked up his Making Age-Verification Technology Uniform, Robust, and Effective Act (MATURE Act), which would enforce a minimum age requirement of 16 for users of social media platforms. (As noted below, panelists were quite skeptical that this would work.) 

The event highlighted, once again, the bipartisan interest in tackling the harms that minors face online. Here’s more detail on what happened:  

First up, opening remarks from Chairman Durbin (D-Ill.), Ranking Member Graham (R-S.C.), and Senators Blumenthal (D-Conn.) and Blackburn (R-Tenn.)

Chairman Durbin kicked off the hearing by explaining that the internet and social media have become a threat to young people.  He noted that while the Internet offers tremendous benefits, cyberbullies can hurt kids online via platforms like Facebook and Snapchat. Durbin stated that “we don’t have to take” the lucrative business that the platforms (who were not in attendance) have created to keep kids’ eyes glued to the screens. He said that the addictive nature of the platforms has created a mental health crisis – causing anxiety, stress, and body image issues, for example – which can lead to tragic results.…

Continue Reading Senate Judiciary Hearing on Kid’s Privacy – Sunny with a Chance of Section 230 Reform

For the 26+ years I served at the FTC, the agency always described itself as a “law enforcement agency,” not a “regulator.” That’s because the FTC spent most of its resources on enforcing the FTC Act and other laws passed by Congress, not creating new regulations on its own. While it would be an exaggeration to say that the FTC has become a regulator in the mold of the federal banking agencies or CFPB, Chair Khan is certainly pushing the FTC in that direction. Indeed, the agency’s rulemaking activity has dramatically increased under her tenure.    

From “Whack-a-Mole” to “Rule-a-Palooza”

What explains the change? For one thing, the FTC majority believes that the FTC’s former way of operating (which it often describes as “case-by-case enforcement” or even “whack-a-mole”) hasn’t adequately protected consumers and competition, warranting the creation of stricter, broader rules for the entire marketplace. For another, in the wake of the Supreme Court’s decision in AMG (holding that the FTC can’t obtain monetary relief under Section 13(b)), the FTC is increasingly relying on other legal tools to get money – notably, alleging rule violations wherever possible, which enables the FTC to seek civil penalties and/or consumer redress. Hence the desire for more rulemaking, or what Commissioner Wilson has described (in strongly worded dissents) as a “Rule-a-Palooza.”   …

Continue Reading Is the FTC a “Regulator”?  It Sure Seems to be Moving in that Direction  

Downloading an app, buying a product or service, or otherwise interacting with a company frequently requires consumers to consent to multi-page contracts. In a new proposed rule, the CFPB would require nonbank financial companies subject to the CFPB’s supervisory jurisdiction to register any use of such form contracts if they contain terms that seek to waive or limit consumer rights and legal protections.  Here are more details:

Registration requirements would apply to companies using form contracts (contracts drafted prior to the transaction for use in multiple transactions between the company and consumers). In addition, the form contracts must contain certain “covered terms and conditions,” as described below. This information would be made publicly available on the CFPB’s website.…

Continue Reading CFPB Tackles Fine Print in Consumer Financial Contracts

In today’s open meeting, the FTC voted unanimously to issue an Advance Notice of Proposed Rulemaking (ANPR) considering expansions to and revisions of the FTC’s existing Business Opportunity Rule (“BOR”). This will be the first review of the BOR since it was promulgated back in December 2011.  In her statement announcing the ANPR, Chair Khan…

The FTC’s Advanced Notice of Proposed Rulemaking (ANPR) seeking comment on a potential rule prohibiting “junk fees” and related practices hit the Federal Register yesterday.  The rule has the potential to fundamentally alter how fees are disclosed in advertising and across the customer experience in nearly every industry that charges some type of fee.  Interested parties now have until January 9 to provide comments and feedback on the proposal.  The ANPR’s publication follows a series of meetings and announcements by the FTC, CFPB, and President Biden that the administration was taking actions to prohibit so-called “junk fees” that “can weaken market competition, raise costs for consumers and businesses, and hit the most vulnerable Americans the hardest.”

Prohibiting junk fees may sound uncontroversial in the abstract, but what does it mean in practice?  We concentrate here on the FTC’s ANPR given its potential breadth and impact on a host of industries including travel, delivery services and others in the gig economy, restaurants, and e-commerce sites.

What is a “Junk Fee”?

The ANPR uses the term “junk fees” to refer to “unfair or deceptive fees that are charged for goods or services that have little or no added value to the consumer, including goods or services that consumers would reasonably assume to be included within the overall advertised price.”  According to the FTC, the term includes, but is not limited to “hidden fees,” which are fees disclosed only at a later stage of the customer experience or potentially not at all.…

Continue Reading The FTC and CFPB are Coming for “Junk Fees,” but What Does that Really Mean?

Join us on Thursday for a webinar discussing how to operationalize adtech privacy compliance, and learn about other ways you can stay informed.

Operationalizing Adtech Privacy Compliance: Understanding the IAB Multi-State Privacy Agreement

State privacy laws that go into effect in 2023 will significantly change the digital advertising landscape.  These privacy laws require companies to…

Last November, the FTC sought public comment on a draft strategic plan for 2022-2026.  As we blogged here and discussed in a comment submitted to the FTC (one of only 21 submitted), a key change from prior strategic plans was deletion of the phrase “without unduly burdening legitimate business activity” from the FTC’s Mission Statement…

Food + Personal Care Litigation and Regulatory Highlights – January 2022Welcome to our 2022 inaugural issue of Food and Personal Care Litigation and Regulatory Highlights, where we explore trends and developments from around these industries.  It’s fair to say that the year has started off very busy in both the courtroom and the regulatory arena.  On this chilly winter day, our first stop is in California.

Prop 65

Our friends at Kelley Green Law Blog get the starting position for this issue by highlighting a precipitous uptick in the number of Prop 65 filings over the prior year.  While the Covid-19 pandemic caused all sorts of disruptions to society and the economy, at least one area of business has thrived over the last two years:  private plaintiff enforcement of California Proposition 65.  In 2020-2021, over 40% more Prop 65 actions were brought by private plaintiff “bounty hunters” than in the two years prior to the pandemic (2018-2019).  Compared to a decade ago, private plaintiff groups now initiate three times more Prop 65 actions each year, and five times more than in 2008.  Learn more here about the most frequently cited chemicals and those that are emerging, including PFAS.
Continue Reading Food + Personal Care Litigation and Regulatory Highlights – January 2022

Kick-Off Time for FTC Rulemaking on Earnings ClaimsLast Thursday (February 10), the FTC announced that it “will vote” at its February 17 open meeting to issue an Advance Notice of Proposed Rulemaking (ANPR) on “deceptive earnings claims for business ventures, gig or other work opportunities, or educational, coaching or training offerings.” Here’s our take on what we can glean from this announcement…