Federal Trade Commission
The building of the Federal Trade Commission in downtown Washington DC.

As Winter continues, consumers harmed by allegedly deceptive behavior see refunds and Chairman Andrew N. Ferguson takes the reins at the FTC. All this, and more, after the jump.

Monday, January 13, 2025

Bureau of Consumer Protection: Deceptive/Misleading Conduct, Online Advertising and Marketing, Health Claims

  • The FTC is sending full refunds to 6,764 consumers who purchased alleged deceptively marketed face masks during the COVID-19 pandemic. In April 2024, the FTC filed a lawsuit against Razer, Inc., alleging that the company falsely advertised its Zephyr masks as N95 or N95-equivalent when, according to the FTC, the company did not submit the masks for testing or certify them as N95.

Bureau of Consumer Protection: Technology, Privacy and Security

  • The FTC finalized an order against IntelliVision Technologies Corp. prohibiting the company from misrepresenting the accuracy and efficacy of its AI-powered facial recognition software, comparative performance of the technology, and its ability to detect spoofing. The order further requires the company to have competent and reliable testing before making any further representations about its technology. This order settles allegations that the company made false and misleading claims that its facial recognition software was free from bias based on gender or race.

Bureau of Consumer Protection: Rulemaking

  • The FTC is seeking comment on three proposed changes to the Business Opportunity Rule and new Earnings Claim Rule, aiming to curtail deceptive earnings claims such as multi-level marketing programs and money-making opportunities and put money back in the pockets of consumers. The three proposals entail:
  • Notice of Proposed Rulemaking on Business Opportunity Rule: This proposal would expand the Business Opportunity Rule to opportunities that claim to assist consumers in building a business or earning an income (e.g., business coaching or investment opportunities). Under the proposal, sellers of these types of opportunities would be prohibited from making any material misrepresentations and would be required to have written proof available to consumers to confirm any earnings claims.
  • Notice of Proposed Rulemaking on Rule Covering Deceptive Earnings Claims in the Multi-Level Marketing Programs: This proposal would create a rule to address false and misleading earnings claims in the multi-level marketing industry, and would provide the same types of protections discussed in the Notice of Proposed Rulemaking on Business Opportunity Rule.
  • Advance Notice of Proposed Rulemaking on Additional Components of the Proposed Earnings Claim Rule: The FTC is seeking public comment on the need for additional rule requirements regarding deceptive earnings claims.

Tuesday, January 14, 2025

Bureau of Competition: Office of Policy Planning

  • The FTC issued a policy statement noting that independent contractors and gig workers are shielded from antitrust liability when organizing and bargaining over wages and labor conditions. The FTC’s policy statement clarifies that though independent contractors are not engaging in a formal employer-employee relationship, the protection of all workers is firmly grounded in the statutory text of the Clayton and Norris-LaGuardia Acts. The Commission voted 3-2 to approve the policy statement.

Bureau of Consumer Protection: Privacy and Security, Technology

  • The FTC finalized an order prohibiting Gravy Analytics and its subsidiary Venntel from selling, disclosing, or using sensitive location data except in limited circumstances. The order also required the establishment of a sensitive data location program. The complaint against Gravy and Venntel alleged that Gravy Analytics used geofencing, which creates a virtual perimeter around a geographic feature, to identify and sell lists of consumers who visited certain healthcare centers and places of worship. The Commission voted 5-0 to approve the final order.

Bureau of Consumer Protection: Privacy and Security, Technology

  • The FTC finalized an order forbidding Mobilewalla Inc. from 1) misrepresenting how it handles consumers’ personal information, 2) using or disclosing location data from sensitive locations (e.g., health clinics, places of worship, LGTBQ+ related locations, etc.), and 3) collecting consumer data from online real-time bidding advertising exchanges except for the purpose of participating in that auction.  The complaint against Mobilewalla alleged that the company unlawfully tracked and sold consumers’ sensitive location data. The Commission voted 4-1 to approve the final order.

Bureau of Consumer Protection: Advertising and Marketing, Deceptive/Misleading          Conduct

  • Defendants in a scheme known as “The Sales Mentor” have agreed to proposed court orders that require them to pay $1 million in consumer refunds. In a federal court complaint, the FTC alleged that a Tennessee-based group of companies deceived consumers by charging them more than $29 million for telemarketing training programs that were deceptively advertised. The two proposed court orders include a prohibition on deceptive earnings claims, prohibition on deceiving customers, and turning over $1,000,000 to the FTC to provide refunds to harmed consumers. The FTC is sending more than $960,000 refunds to 8,174 consumers.

Sunday, January 16, 2025

Bureau of Competition: Office of Policy Planning

Bureau of Consumer Protection: Advertising and Marketing, Privacy and Security

  • The FTC finalized changes to the Children’s Online Privacy Protection Rule (COPPA) and requires opt-in consent for targeted advertising and other disclosures to third parties, limits on data retention, and increasing Safe Harbor programs’ transparency. The final rule also includes amended definitions with the intent to set requirements around the use of children’s personal information and give parents tools to help protect their children’s data.

Monday, January 17, 2025

Bureau of Competition: Merger, Health Care

  • The FTC announced a proposed consent order with Welsh, Carson, Anderson, and Stowe (Welsh Carson) to resolve an administrative antitrust case. The FTC alleges that Welsh Carson, through its portfolio company U.S. Anesthesia Partners (USAP), suppressed competition and drove up prices for anesthesiology services in Texas. Under the proposed order, Welsh Carson must limit its ownership rights with USAP, obtain prior approval for any future investments in anesthesia nationwide, and provide 30-day advance notice for some transactions involving other hospital-based practices.

Bureau of Competition: Professional Services

  • The FTC finalized a consent order requiring Guardian Services Industries, Inc. to stop enforcing a no-hire agreement. The FTC alleged that Guardian’s no-hire agreement prohibited building owners and competing building service contractors from hiring Guardian’s employees, thus limiting their ability to negotiate for better pay and working conditions. The Commission voted 3-2 to approve the final order.

Bureau of Competition: Merger, Energy

  • The FTC finalized a consent order 1) prohibiting Exxon Mobil Corporation (Exxon) from nominating founder and former CEO Scott Sheffield to the Exxon Board or to serve in an advisory capacity, 2) for five years, prohibiting the nomination of any Pioneer Natural Resources employee, with the exception of named individuals, to the Exxon Board, and 3) requiring Exxon to agree to certain Clayton Act Section 8 obligations for 10 years. The FTC alleged that Sheffield has attempted to collude with the representatives of the Organization of Petroleum Exporting Countries to reduce the output of oil and gas in order to charge higher prices at the gas pump. The Commission voted 3-2 to approve the final order.

Bureau of Consumer Protection: Privacy and Security, Gaming, Children’s Online Privacy Protection Act

  • After referral from the FTC, the Department of Justice filed a complaint alleging that Singapore-based Cognosphere Pte. Ltd and its California-based subsidiary Cognosphere LLC, which do business in the United States as HoYoverse, actively marketed its video game Genshin Impact to children, collected personal information from them in violation of the Children’s Online Privacy Protection Rule (COPPA), and deceived players about the odds of winning prizes such as “loot boxes” and how much it costs to win prizes by using a system where players exchange real dollars for virtual currency. The complaint alleged that this has led some children to spend hundreds or thousands of dollar to win these prizes. Under a proposed order, Cognosphere Pte. Ltd and Cognosphere LLC will be required to a pay a $20 million dollar penalty and make changes to address the allegations outlined in the complaint, primarily prohibiting children under age 16 to purchase “loot boxes” in the video game without a parent’s consent, deleting personal information from children under 13 without parental consent, and requiring compliance with COPPA.

Tuesday, January 21, 2025

Bureau of Consumer Protection, Regional Offices, Southeast Region, Bureau of Consumer Protection, Debt Relief, Deceptive/Misleading Conduct, Consumer Refunds, Finance, Credit and Finance, Debt

  • Because of a settlement with ACRO Services, the FTC is sending more than $5 million in refunds to the consumers harmed by the company’s misleading debt relief promises. The FTC sued ACRO Services in November 2022. The complaint alleged that the company violated the Telemarketing Sales Rule, made false promises to reduce or eliminate consumer’s credit card debt, and charged deceptive upfront fees to consumers for debt relief services. As part of the settlement, the ARCO Services defendants agreed to a permanent ban from the debt relief and telemarketing industries.

Wednesday, January 22, 2025

FTC Operations, Commissioners

  • President Trump officially designated Andrew N. Ferguson as Chairman of the FTC on Monday, January 20, 2025. Chairman Ferguson vowed that “[u]nder the President’s leadership, we will end the previous administration’s assault on the American way of life, and we will usher in a new Golden Age for American businesses, workers, and consumers.” For more information on how the appointment of Commissioner Ferguson as Chair and the Executive Order halting rulemaking may affect the FTC, see Crowell & Moring’s Law360 article, “How FTC Consumer Protection May Fare Under Reg Freeze.”

Competition, Bureau of Competition, Merger, Energy, Natural Gas

  • The FTC seeks public comment on a petition by Enbridge Inc. requesting that the FTC reopen and set aside a 2017 final consent order regarding Enbridge’s merger with Spectra Energy Corp. The merger gave Enbridge an ownership interest in the Discovery Pipeline and Walker Ridge Pipeline. Accordingly, the 2017 order found that the merger would likely harm competition in the market for pipeline transportation of natural gas in three Louisiana production areas where the pipelines competed. The consent order required Enbridge to establish firewalls to limit its access to non-public information about the Discovery Pipeline. It also requires board members of the Spectra-affiliated companies that hold a 40 percent share in the Discovery Pipeline to recuse themselves from votes involving the Pipeline.

FTC Operations, Commissioners

  • FTC Chairman Andrew N. Ferguson announced that he had ended several FTC DEI efforts. For example, he closed the FTC’s DEI Office, terminated the Diversity Council, and forbid the Commission from promoting DEI in internal or external operations, rules, enforcement decisions, or hiring decisions. Chairman Ferguson stated that he would request additional authority from the Commission to remove outstanding DEI directives, documents, and programs that would otherwise require Commission votes.

Thursday, January 23, 2025

FTC Operations, Commissioners

  • The FTC Commission approved a motion by 2-1-2 to delegate Chairman Feguson the authority to end DEI-related directives, programs, and documents that would otherwise require Commission votes to end. Commissioner Alvaro Bedoya voted against the motion, stating in dissent that Ferugson “seems uninterested in the challenges that regular human beings face.” Commissioners Rebecca K. Slaughter and Lina M. Khan did not participate in the vote.

Tuesday, January 28, 2025

Bureau of Consumer Protection; Retail; Merchandise & Clothing; Privacy and Security

  • Concluding the FTC’s first case targeting a company’s efforts to conceal negative customer reviews, the FTC announced it will be sending payments to over 100,000 customers of online retailer Fashion Nova as agreed to in a 2022 settlement order. In January 2022, the FTC filed a complaint against the online “fast fashion” retailer, Fashion Nova, LLC, alleging the retailer blocked negative reviews of its products from being posted on its website. According to the FTC’s complaint, Fashion Nova suppressed reviews with ratings lower than four out of five stars, but misrepresented that product reviews on its website reflected the views of all customers who submitted reviews. Fashion Nova agreed to a settlement order, prohibiting the company from suppressing customer reviews and requiring the company to compensate affected customers.