This week, the FTC filed a brief as Amicus Curiae in the U.S. District Court for the District of Delaware, issued a request for information on the business practices of cloud computing providers, and proposed a “click to cancel” provision in an ongoing review of the 1973 Negative Option Rule. These stories and more after the jump.
March 21, 2023
Bureau of Consumer Protection: Health Care, Optometry
- The Federal Trade Commission will host a public workshop on May 19, 2023, in Washington, DC, to examine proposed changes to its Ophthalmic Practice Rules, also known as the Eyeglass Rule. The workshop is free and open to the public, and pre-registration is not required. In December 2022, the FTC announced a proposal to update the Eyeglass Rule, which helps facilitate consumer choice and promote competition in the eyeglass market by requiring ophthalmologists and optometrists to provide patients with a copy of their prescription immediately after the completion of an eye exam. Under the rule, prescribers cannot require that patients buy eyeglasses, pay an additional fee, or sign a waiver or release as a condition of providing them with a copy of their prescription. The proposed rule changes would require prescribers to get a signed statement from the patient confirming that they have received their prescription, and keep a record of that confirmation for at least three years. The Federal Register notice that announced the workshop hinted that the workshop may address the proposed confirmation of prescription release requirement for eyeglass prescriptions, consumers’ and prescribers’ experiences with the implementation of a similar requirement for contact lens prescriptions, other proposed changes to the rule, and issues raised in public comments submitted in response to January’s notice of proposed rulemaking. Written comments related to agenda topics or issues discussed at the workshop must be received by June 20, 2023.
Bureau of Competition: Merger, Pharmaceuticals
- The Federal Trade Commission filed a brief as Amicus Curiae in the U.S. District Court for the District of Delaware in the case of Sage Chemical, Inc. et al. v. Supernus Pharmaceuticals, Inc. et al. Plaintiffs allege that multiple defendants have engaged in numerous unlawful strategies to delay or block entry of a generic version of the branded injectable apomorphine drug, Apokyn, that is used to treat patients with symptoms of advanced Parkinson’s Disease. Plaintiffs claim that many of the alleged strategies leverage control over the Apokyn pen injector, which is a device that the FDA requires to be used with both branded and generic apomorphine cartridges. Plaintiffs further allege that without access to the pen injectors, consumers cannot use their FDA-approved generic version of Apokyn. The brief explains: (1) the potential harm to competition and consumers posed by a brand’s exclusion of generic competition from the market; (2) that a competitor’s marketing of an FDA-approved generic pharmaceutical product intended to work with the branded product is not improper free-riding under the antitrust laws; (3) that exclusive agreements can substantially foreclose competition from the market by barring a potential competitor’s access to a key input even if that competitor could theoretically develop its own alternative to that input; and (4) that single-brand or single-manufacturer markets are appropriate and not legally deficient when there are no adequate substitutes. The Commission urges the court to consider these points in determining whether to grant Supernus’s motion to dismiss. The Commission voted 3-0-1 to approve the filing of the amicus brief, with Commissioner Christine S. Wilson not participating.
March 22, 2023
Bureau of Competition and Bureau of Consumer Protection: Privacy and Security, Data Security
- The FTC issued a request for information seeking public comment on the business practices of cloud computing providers including issues related to the market power of these companies, impact on competition, and potential security risks. Cloud computing is used by a wide range of industries for on-demand access to storage, servers, networks, and more, and is increasingly central to many areas of the economy. Staff across the FTC’s Office of Technology, Bureau of Competition, and Bureau of Consumer Protection are seeking information about the competitive dynamics of cloud computing, the extent to which certain segments of the economy are reliant on cloud service providers, and the security risks associated with the industry’s business practices, as well as the impact of cloud computing on specific industries including healthcare, finance, transportation, e-commerce, and defense. The public will have until May 22, 2023 to submit a comment.
Bureau of Consumer Protection: Advertising and Marketing
- The FTC will hold an informal hearing on its proposed rule prohibiting government and business impersonation on May 4, 2023. The proposed rule would codify the principle that impersonation scams violate the FTC Act, as do those who provide impersonators with the means to harm consumers. This rule would allow the Commission to recover money from, or seek civil penalties against, scammers who harm consumers in violation of the rule.
March 23, 2023
Bureau of Consumer Protection: Online Advertising and Marketing, Payments and Billing
- The FTC proposed a “click to cancel” provision requiring sellers to make it as easy for consumers to cancel their enrollment as it was to sign up. The notice of proposed rulemaking is part of the FTC’s ongoing review of the 1973 Negative Option Rule, which the agency uses to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs. The proposal would make several specific changes, including implementing 1) a simple cancellation mechanism; 2) new requirements before making additional offers, and; 3) new requirements regarding reminders and confirmations. The Commission vote approving publication of the notice of proposed rulemaking was 3-1, with Commissioner Christine S. Wilson voting no.
March 24, 2023
Bureau of Consumer Protection: Advertising and Marketing, Automobiles, Telemarketing Fraud
- As a result of the FTC’s “aggressive crackdown on telemarketing fraud,” the operators of a telemarketing scam that called hundreds of thousands of consumers nationwide to pitch them expensive “extended automobile warranties” will face a lifetime ban from the extended automobile warranty industry and from all outbound telemarketing, as well as a $6.6 million monetary judgment. The American Vehicle Protection Corp., CG3 Solutions, Inc., and Tony Gonzalez Consulting Group, Inc., along with individual defendants, Tony Allen Gonzalez, and his brother, Charles Gonzalez, have agreed to the terms of the proposed court orders. The Commission vote approving the stipulated final orders was 3-0-1, with Commissioner Christine S. Wilson not participating.