It’s late August, but there’s a lot going on at the FTC and in consumer protection news more generally. This blogpost highlights some recent FTC-related news, as well as several issues related to the FTC’s legal authority that bear watching.
As we blogged here, the FTC filed suit in March against Intuit for its alleged deception in claiming that its online tax preparation service is “free” when it’s only free for taxpayers filing “simple returns.” As we reported, the FTC filed an administrative complaint while also seeking a TRO in federal district court, even as multiple State AGs were investigating and Intuit claimed it had pulled its “free” claims off its website. Soon after, the FTC lost its motion for the TRO; the States and Intuit entered into a multi-state settlement; and Intuit moved for withdrawal of the FTC’s case from administrative adjudication (per FTC Rule 3.26(c), to allow the FTC to determine “whether the public interest warrants further litigation”), which the FTC granted.
In its motion for withdrawal, Intuit argued that the case had become moot, in large part due to the multi-state settlement. However, on August 19, the Commission issued an order disagreeing with that assessment and returning the case to administrative litigation. Soon after, FTC complaint counsel filed a motion for summary decision seeking entry of a cease-and-desist order without need for a trial.
The merits of this case are interesting – FTC counsel argues that Intuit shouldn’t be able to use the word “free” unless the product is free for everyone or, alternatively, the conditions for making it free (and the fact that it isn’t free for everyone) are clearly disclosed at the outset of the offer. But the dynamics between the FTC and the State AGs are just as notable. In its recent motion, FTC counsel argues that an FTC order is necessary because the State settlement is “inadequate, allow[s] ongoing deception and harm, and … undermine[s] consumer welfare.” In particular, says FTC counsel, the State settlement allows key disclosures to be “hidden behind” a hyperlink for “space-constrained” ads and sunsets key provisions after 10 years. At a time when the FTC is increasingly teaming with the States to obtain monetary relief (post-AMG), this battle over the adequacy of their settlement could get messy.
Continue Reading FTC Updates – Intuit, Mag-Moss, and More