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The FTC took unprecedented action yesterday when it moved to impose what it describes as a “blanket prohibition” preventing the company from monetizing young people’s data.  The FTC contends that this prohibition is warranted as a result of repeated violations of Meta’s 2020 consent order (“Proposed Order”).

In taking this action, the FTC is relying on its administrative authority to “reopen and modify” orders to address alleged order violations, rather than to press its compliance case in federal court under the FTC Act.  In doing so, the FTC seeks to significantly expand the scope and duration of the existing order to cover new conduct.  Even against recent examples of aggressive FTC action (see examples here, here, and here), this one markedly stands out.  And, in the face of mounting agency losses in challenges to its enforcement authority in Axon and AMG and its aftermath, the Proposed Order is extraordinary. 

The Commission voted 3-0 to issue the Proposed Order and accompanying Order to Show Cause.  Commissioner Bedoya issued a statement expressing reservations about the “monetization” restrictions described below, specifically questioning whether the provision related to minors’ data is sufficiently related to either the 2012 or 2020 violations or order.  Meta has 30 days to answer the FTC’s proposal.…

Continue Reading FTC Attempts End Run to Ban Meta from “Monetizing” Minors’ Data

On Friday, the FTC announced what would ordinarily be an unremarkable enforcement action against a company for unsubstantiated earnings claims.  The FTC alleges that WealthPress, an investment advice company purporting to offer training from experts on trading strategies, made a series of unsubstantiated earnings claims such as “make $24,840 or more every single week,” “track…

Late last week (Oct. 29), FTC Commissioner Rohit Chopra (D) and his Attorney Advisor Samuel Levine released a paper entitled “The Case for Resurrecting the FTC Act’s Penalty Offense Authority.”  In it, Commissioner Chopra and Mr. Levine argue that the Commission should “resurrect one of the key authorities it abandoned in the 1980s:…

Law360-ln-mini
On May 17, AdvoCare International LP, marketer of “innovative nutritional, weight-management and sports performance products,” made the extraordinary announcement that it was abandoning its business model. It would no longer engage in multilevel marketing; all sales from here on in would be direct-to-consumer, a single-level marketing compensation plan.

In making this announcement, AdvoCare disclosed

…

On May 9, the Federal Trade Commission Chairman and Commissioners testified before the House Committee on Energy and Commerce’s Subcommittee on Consumer Protection and Commerce on a number of issues. Reaffirming a previous commitment for increased scrutiny of deceptive “Made in USA” advertising, FTC Chairman Simons told Congress the agency plans to hold a workshop…

On November 27, the FTC Commissioners testified on a range of issues before the Senate Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security. One excerpt that caught our attention was their comments on “Made in USA” advertising and the potential for increased scrutiny.

Here’s an excerpt of the Q&A between Sen. Shelly Moore Capito (R-WV) and the FTC Commissioners (emphasis added):

CAPITO: Okay, last question I have on fraudulent marketing would be the… fraudulent Made in America label. How prevalent is this? And what are some of the means you’re going to try to curb this practice?

SIMONS: This is fairly prevalent. We get hundreds of these, hundreds of complaints a year, that people are improperly using the Made in the USA label. We are committed to investigating those, and usually a lot of times what happens is the firm, the company doesn’t even realize that it’s a violation. So we explain to them it’s a violation and they stop it.

Sometimes companies do it intentionally, sometimes we tell them and they don’t stop and those people we sue. And one of the things that we’re exploring now, as a general rule, we have only gotten injunctive relief in cases like this previously. Now we’re exploring whether we can find a good case that would be appropriate for monetary relief to serve as an additional deterrent.

CHOPRA: I just want to add here that I think there are manufacturers out there who hire American workers and who purposely do that because they want to put the flag on their product. And for those who lie, this cheapens the Made in the USA label so it’s not just hurting American consumers, it’s hurting every American manufacturer who is trying to do right. So I want us to be much more aggressive with this, actually. And if you and Senator Cortez-Masto want to team up, finding civil penalties for some of these bad actors, we can make sure we increase compliance levels. And I got to tell you — right now there’s a country of origin labeling issues in agriculture, country of origin issues in product marketing. We have to do more to put a stop to this because this is extremely unfair to honest companies.…

Continue Reading FTC Testimony Signals Possible Increase in “Made in USA” Advertising Scrutiny

Yesterday, a D.C. district court upheld a recent opinion letter issued by FTC staff that extended robocalling restrictions to telemarketing calls that use so-called soundboard technology or “avatars.”  This technology generally allows a live agent to communicate with a call recipient by playing recorded audio snippets instead of using his or her own live voice.…

Western UnionLast week, California became the 50th state to join the multistate settlement with Western Union over its alleged complicity in fraud-induced wire transfers.  This followed Western Union’s $5 million agreement with 49 state and the District of Columbia for costs and fees in January, not to mention a whopping $586 million in settlement agreements…

Just over one week after being named acting chair of the Federal Trade Commission (FTC), Maureen Ohlhausen delivered the keynote address at the American Bar Association’s biennial Consumer Protection Conference in Atlanta on February 2.

During her remarks, acting chair Ohlhausen offered insight into consumer protection priorities during her tenure as acting chair.

First, acting…

The FTC recently announced a settlement with Breathometer, Inc., a company that marketed a smartphone accessory that it claimed could detect blood alcohol levels.  Users could simply plug the accessory into the headphone jack, open the Breathometer app, blow, and receive a reading of their blood alcohol content within five seconds.  Breathometer marketed the…