The FTC has not been quiet during the holidays.  The agency is primarily tied up with its litigation against Meta, but it has also taken action in other industries, including finance and health products.  These stories and more after the jump.

Monday, December 19, 2022

Bureau of Consumer Protection: Consumer Privacy

  • The FTC announced two record-breaking settlements involving Epic Games and its popular game Fortnite. In its federal court complaint, the Commission alleged that Epic violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal data from children without first obtaining parents’ verifiable consent and by having live on-by-default text and voice communications for users, settings which harmed children and teens. Separately, the FTC alleged in an administrative complaint that Epic used “dark patterns” to deceive players into making unwanted and unauthorized charged without any parental involvement. The proposed federal court order would prohibit Epic from enabling default voice and text settings for certain children and teens without parental consent, would require Epic to delete much of the personal information previously collected from Fortnite users in violation of the COPPA, and would require Epic to establish a privacy program that addresses the problems in the FTC’s complaint, and obtain regular, independent audits. The Commission voted 4-0 to refer the civil penalty complaint and proposed federal order to the Department of Justice, which then filed the complaint and stipulated order in the U.S. District Court for the Eastern District of North Carolina, and Commissioner Christine S. Wilson concurred separately. The proposed administrative order would require Epic to pay $245 million to refund customers, would prohibit Epic from charging consumers through dark patterns or any other method without obtaining affirmative consent, and would prevent Epic from blocking consumers from accessing accounts with disputed unauthorized charges. The Commission voted 4-0 to issue the proposed administrative complaint and to accept the consent agreement. FTC Chair Lina M. Khan commented that “[p]rotecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the Commission, and these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices.” Associate Attorney General Vanita Gupta noted that the proposed federal court order “sends a message to all online providers that collecting children’s personal information without parental consent will not be tolerated.”

Tuesday, December 20, 2022

Bureau of Consumer Protection: Health Advertising and Marketing

  • The Commission released an updated version of its Health Products Compliance Guidance for marketers of health products. This guide is designed to ensure that any claims or advertising about the benefits and safety of health products comply with Sections 5 and 12 the FTC Act, which require claims related to health products to be truthful, not misleading, and supported by scientific evidence. Revised for the first time in 25 years, the guide has been expanded from covering only dietary supplements to all health-related products, such as food, over-the-counter drugs, health equipment, diagnostic tests, and health-related apps. The new guide also expands its discussion of the amount and type of evidence needed to substantiate a health-related claim and meet the FTC Act’s “competent and reliable scientific evidence” standard.

Wednesday, December 21, 2022

Bureau of Competition: FTC v. Meta Platforms

  • The FTC’s twin lawsuits against Meta Platforms – an administrative complaint and a request for a preliminary injunction – regarding Meta’s acquisition of Within Unlimited continue to progress. In the administrative proceeding, Meta filed a motion to stay on August 26, 2022 pending the outcome of the preliminary injunction case as well as Meta’s motion to disqualify Chair Khan from any participation in the Meta/Within transaction. The Commission has yet to rule on this motion and recently extended the deadline to respond to January 17, 2023, even though an administrative hearing is scheduled for January 19, 2023. Commissioner Wilson issued a statement criticizing this extension and urging the Commission to rule on the motion for disqualification as soon as possible. In the preliminary injunction proceeding, Judge Edward Davila presided over multiple evidentiary hearings, including testimony from Mark Zuckerberg, and has stated he will issue a decision by the end of the year on whether to block Meta’s acquisition of Within until the administrative proceedings have concluded.
  • The Commission unanimously issued a joint statement responding to a negative Wall Street Journal article. The article reported that FTC officials “traded stocks and funds more than those at any other major agency, including going heavily into tech shares.”  In their statement, the Commissioners “stand behind our career staff,” but also “demand compliance with the FTC’s ethics rules, set clear expectations of staff behavior, and swiftly refer any violations of these rules to the proper authorities.”

Friday, December 23, 2022

Bureau of Consumer Protection: Credit and Finance

  • The Commission entered into a consent order with Mastercard over claims that Mastercard has been forcing merchants to route debit card payments through its payment network instead of any competing debit payment networks. The FTC’s complaint alleged that Mastercard had violated the Durbin Amendment to the 2010 Dodd-Frank Act, which bars payment card networks from inhibiting merchants from using other networks. The FTC further alleged that when a consumer paid via an “ewallet” (such as Apple Pay) containing a Mastercard debit card, Mastercard had required merchants to route the ewallet transaction through Mastercard for processing, which in turn caused merchants to pay fees to Mastercard. The consent order prohibits Mastercard from inhibiting the ability to direct the routing of ewallet transactions to other payment card networks.

Monday, December 26, 2022

Bureau of Consumer Protection: Children’s Privacy

  • The FTC voted to extend the public comments period for a rulemaking petition to prohibit the use of certain internet engagement-optimizing design practices on minors. Prior to this vote, the period for public comments was set to close on Tuesday January 3, 2023. Commissioner Christine Wilson disagreed with the extension and dissented separately.