The FTC had a busy week in the consumer protection realm. The agency settled with several companies over allegations ranging from shoddy data security to a full-on credit card laundering scam. Chair Khan and DOJ Assistant AG Kanter have remained busy in their efforts to gather information on merger guidelines, and, in case there wasn’t enough on the FTC’s plate, a U.S. Senator has asked the agency to dig up evidence of wrongdoing in the gas and oil markets. More on all of this after the jump.
Tuesday, March 15, 2022
Bureau of Consumer Protection: Consumer Data Privacy and Security
- The FTC filed an administrative complaint and a proposed consent order against the former and current owners of online customized merchandise platform CafePress. The complaint alleged that the company failed to implement security measures to protect the information of buyers and sellers stored on its network. Due to this alleged failure, in February 2019, a hacker was able to access consumers’ Social Security numbers, credit card numbers, names, physical and email addresses, and security questions and answers; some of this information was later placed on the dark web for sale. Upon being notified of the breach, CafePress allegedly failed to promptly investigate the breach or notify affected customers. As part of the consent order, the owners must implement new security programs, replace inadequate authentication measures, minimize data collected and retained, and encrypt Social Security numbers. In addition, the former owner will pay $500,000 in redress to victims of the data breach. The Commission voted unanimously to issue the complaint and accept the consent agreement.
Bureau of Consumer Protection: Deceptive Advertising and Marketing
- The Commission also unanimously voted to file an administrative complaint and a consent agreement against Electronic Payment Systems and its owners in relation to an alleged “Money Now Funding” scam. Specifically, the agency alleged that the company opened credit card processing merchant accounts for fake companies, and then used those companies to help Money Now Funding launder millions of dollars of consumers’ credit card payments, a growing practice called “factoring” or “credit card laundering.” The consent agreement imposes a number of restrictions on the company, but the FTC did not pursue money damages on behalf of consumers due to the limitations on its authority to seek such relief in federal court imposed by an April 22, 2021 Supreme Court decision.
Wednesday, March 16, 2022
Bureau of Consumer Protection: Deceptive Health Claims
- The FTC announced a settlement with Health Research Laboratories LLC, Whole Body Supplements LLC, and their owner stemming allegations contained in a 2020 complaint. In the complaint, the Commission claimed that the defendants had made unsubstantiated claims that their supplements could treat, cure, or reduce the risk of certain diseases, including diabetic neuropathy. As part of the settlement, which the agency unanimously approved, Defendants are permanently banned from the supplement industry.
Thursday, March 17, 2022
Bureau of Competition: Mergers and Acquisitions
- FTC Chair Lina Khan and DOJ Assistant Attorney General Jonathan Kanter will host a series of public virtual “listening forums” to hear from individuals and companies who are not antitrust experts, including consumers, workers, entrepreneurs, start-ups, farmers, investors, and independent businesses. Each forum will focus on a different industry, including Food & Agriculture, Health Care, Media & Entertainment, and Technology. The forums, which take place from March 28 through May 12th, are designed to supplement the agencies’ recent requests for comments on merger enforcement guidelines. The deadline to submit comments on those guidelines was recently extended to April 21, 2022.
FTC Internal Operations: Gas and Oil Market
- S. Senator Roger Wicker, R-Miss, part of the Senate Committee on Commerce, Science, and Transportation, issued a letter to FTC Chair Lina Khan, requesting that the agency help Congress “be fully informed of the potential underlying causes of skyrocketing gas prices.” Specifically, Senator Wicker requested any evidence the FTC has gathered showing market manipulation, collusion, or other improper or illegal behavior in the gas and crude oil markets. Senator Wicker requested a response by March 25, 2022.