This week, the Commission announced that it blocked a hospital merger in Utah and New Jersey and ordered an oil and gas divestiture in Michigan. The FTC also issued a policy statement on exclusionary rebates and fees in prescription drug pricing and submitted a report to Congress on combatting online harms through innovation. Commissioner Noah Joshua Phillips issued a dissenting statement regarding the FTC’s report to Congress, and Commissioner Christine Wilson questioned whether the FTC’s Fuel Rating Rule under the Petroleum Marketing Practices Act is necessary. These stories and more after the jump.
The FTC had a busy week, taking multiple actions against alleged scammers and pyramid schemes in the finance and credit industries. In merger news, the agency announced a workshop on pharmaceutical mergers, and it took enforcement actions related to several mergers in a variety of industries. The FTC also issued a report showing that consumers have lost a whopping $1 billion in cryptocurrency scams since 2021. These stories and more after the jump. …
On May 20, 2022 the Federal Trade Commission’s (“FTC”) Commissioners unanimously approved a request for public comment on proposed updates to its Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides” or “Guides”). In the draft revisions, released last week, the FTC seeks to update the Endorsement Guides and provide new examples that reflect advertisers’ growing reliance on social media advertising. The Endorsement Guides were last revised in 2009. See 16 CFR pt 255.
The Endorsement Guides require advertisers that feature endorsements made by endorsers with an unanticipated material connection to the advertiser—for example, monetary payment, a sweepstakes entry, or something else of value—to disclose that connection in the advertising. In addition, endorsements must be truthful and accurate, reflecting the endorser’s actual experience with the product. Marketers that fail to comply with the Endorsement Guides violate Section 5 of the FTC Act.…
For the first time, the FTC used the Opioid Addiction Recovery Fraud Prevention Act to go after the promoter of an addiction treatment network. The 2018 law allows the agency to seek civil penalties for deceptive practices related to addiction treatment, and the case sparked dueling public statements from FTC Chair Lina Khan and Commissioner Christine Wilson. Later in the week, the Commission held an open meeting and discussed endorsements and testimonials in advertising, education technology, and the Children’s Online Privacy Protection Act. Following the meeting, the FTC released the long-awaited draft revised Guides Concerning the Use of Endorsements and Testimonials in Advertising for comment. These stories and more after the jump. …
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.
Continue Reading FTC Updates (April 18-22, 2022)
This week, the FTC announced that it reached settlements with a state real estate board and an international online business coaching organization. It also announced that millions of dollars in refunds would be made available following a win at trial against a private website attempting to assist consumers with government services. The conduct ranges from allegedly anticompetitive behaviors in violation of Section 5 of the FTC Act as well as false and deceptive marketing and advertising practices. These stories and more after the jump. …
Continue Reading FTC Updates (April 1-8, 2022)
We recently reported on the Federal Trade Commission’s (“FTC”) increased enforcement against review curation policies that disproportionately restrict or remove negative reviews. Now, the Consumer Financial Protection Bureau (“CFPB”) has issued a Bulletin that makes clear that the suppression or manipulation of consumer reviews posted about financial products and services is an unfair and deceptive act or practice. The CFPB’s Bulletin drew from recent FTC guidance and enforcement activity as well as the Consumer Review Fairness Act of 2016 and stated that conduct such as (1) deceptively posting fake reviews that appear independent, (2) suppressing or manipulating reviews such as by limiting the posting of negative reviews, or (3) imposing contractual ‘gag’ clauses on consumers in form contracts that prohibit honest reviews is generally a violation of the Consumer Financial Protection Act.
Continue Reading CFPB Announces Policy Against Consumer Review Suppression
The FTC’s Bureau of Consumer Protection issued a number of press releases regarding advertising and marketing practices in the fashion, finance, and the dietary supplement industries. The agency finalized a settlement over false and suppressed endorsement reviews. It also obtained injunctions over allegations ranging from false claims of removing negative information from credit reports to false health claims related to dissolvable film strips. The Commission also proactively issued warning letters to companies allegedly selling and advertising COVID-19 treatments.
Continue Reading FTC Updates (March 21-25, 2022)
Tuesday, March 8, 2022
Bureau of Consumer Protection: Deceptive/Misleading Conduct on Online Stock Trading Site
- The FTC is requiring RagingBull.com, an online stock trading site, to pay $2.425 million and to implement tactics that end the alleged deceptive acts, require affirmative approval from consumers signing up for a subscription, and provide consumers with a simple method of cancelation. According to FTC allegations, the online stock trading site used bogus earnings claims to trick consumers into signing up for services and then trapped them in hard to cancel subscription plans. More specifically, RagingBull.com allegedly made claims that consumers who followed the advice and trade recommendations of its “gurus” could “double or triple” their trading accounts quickly and easily. The FTC complaint further alleges that the defendant included testimonials from purported customers claiming to have made significant amounts of money in short periods of time, e.g., “$6500.00 in 20 minutes.” The complaint noted that Raging Bull’s services, which costs hundreds or thousands of dollars, were set up as recurring subscriptions that are charged quarterly or annually, and that subscribers faced significant hurdles in preventing those recurring charges. The FTC took issue with the allegedly different cancellation requirements that each service had. The proposed order comes on the coat-tail of the FTC’s efforts to crackdown on false earnings claims, returning millions to consumers and requiring click-to-cancel online subscriptions.
In the wake murder of George Floyd in 2020 and the demonstrations that followed, brands pledged to support anti-racism and solidarity with the Black community. Some companies professed that they would make large donations to social justice organizations, leading commentators to ponder whether brands were “woke washing.” At the end of Black History Month, the National Advertising Division (“NAD”) announced that it investigated two companies making express claims committing to sizable charitable contributions to ensure that those claims were substantiated. See Niantic, Inc. (Advertising by Niantic Labs), Report #7037, NAD/CARU Case Reports (February 2022) and DoorDash, Inc. (Advertising by DoorDash, Inc.), Report #7036, NAD/CARU Case Reports (February 2022).
Continue Reading NAD Makes Clear that “Woke Washing” is False Advertising