This week, the FTC cracked down on day-trading investment advertising and Chair Khan discussed the agency’s enforcement priorities, including the proliferation of non-compete agreements. The Commission tentatively announced it will discuss expansive changes to the Telemarketing Sales Rule at its April 28 Open Commission Meeting. These stories and more after the jump.

Tuesday, April 19, 2022

Bureau of Consumer Protection: Deceptive Advertising and Marketing

  • The FTC settled a lawsuit against day-trading online educator Warrior Trading and its CEO Ross Cameron in relation to a concurrently filed complaint in the Western District of Massachusetts. Warrior Trading sells day-trading strategy programming online, and its advertising showcased the trading results of Mr. Cameron. In the complaint, the agency alleged that Warrior Trading and Mr. Cameron’s sales pitch misled consumers with unrealistic claims of big investment gains in violation of Section 5(a) of the Federal Trade Commission Act and the Telemarketing Sales Rule (TSR) under the Telemarketing and Consumer Fraud and Abuse Act. Under the parties’ settlement, Warrior Trading has agreed to pay $3 million in civil penalties. The proposed order prohibits Warrior Trading from making unsubstantiated earnings claims and further violating the TSR. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, commented on the case in the agency’s press release and noted that “[t]he FTC will continue its crackdown on false earnings claims and phony opportunities.”

Thursday, April 21, 2022

FTC Internal Operations: Tentative Agenda for April 28 Open Commission Meeting

  • Chair Lina Khan announced that an open meeting of the Commission will be held virtually on Thursday, April 28, 2022, at 1:00 PM ET. The Commission will vote on a Notice of Proposed Rulemaking and Advanced Notice of Proposed Rulemaking regarding the Telemarketing Sales Rule (TSR). The Notice proposes amending the TSR’s recordkeeping requirements and prohibiting deception in business-to-business telemarketing calls, while the Advanced Notice seeks public comment on tech-support scams, click-to-cancel requirements, robocalls, and telemarketing to small businesses. Given that business-to-business calls are largely excluded from the current TSR, the FTC’s presentation on its proposed rulemaking will be followed closely. Agency staff also will provide a presentation on the impact of AMG Capital Management v. FTC, in which the Supreme Court ruled that the Commission lacks authority under Section 13(b) of the Federal Trade Commission Act to seek monetary relief in federal court.

Bureau of Competition: Premerger Notification Civil Penalties

  • The United States District Court for the District of Columbia approved the FTC’s settlement with founder Clarence Werner of truckload carrier Werner Enterprises, Inc. in relation to a complaint the Commission filed in December 2021. The agency alleged Mr. Werner violated the Hart-Scott-Rodino (HSR) Act’s premerger notification requirements in relation to certain acquisitions he made in company stock between 2007 and 2020. Mr. Werner must pay a civil penalty of $486,900 and comply with the HSR Act’s reporting requirements.

Friday, April 22, 2022

Internal FTC Operations: Remarks on Enforcement Priorities

  • Chair Lina Khan spoke at the 2022 Antitrust and Competition Conference sponsored by the University of Chicago Stigler Center. Chair Khan discussed how she views the harms associated with agency inaction as worse than the risk of agency backlash. She reported that the FTC is reexamining its processes related to mergers such as Hart-Scott-Rodino (HSR) Act timelines and forms, Department of Justice Merger Guidelines, and the agency’s use of merger settlements. When asked about unsuccessful high-profile cases, Chair Khan posited that unsuccessful enforcement actions can signal necessary changes to legislators. Importantly, she warned that “efficiency” does not appear in the text of U.S. antitrust laws and that the FTC’s inquiry should focus on unfair methods of competition, defined on the agency’s terms. She confirmed the agency is studying the proliferation of non-compete agreements as a method of unfair competition. On the consumer protection side, Chair Khan explained that the agency was reanalyzing the types of harm that may qualify as substantial injury under consumer protection statutes and previewed a more expansive view beyond traditional monetary damages.