Federal Trade Commission (FTC)

#ICYMI – The Federal Trade Commission (“FTC”) extended the public comment period on its solicitation for public comments regarding potential updates and changes to the Green Guides (Guides for the Use of Environmental Marketing Claims) by 60 days.  On December 14, the FTC held an open meeting and voted to notice the public comment period. On December 20, the FTC noticed the public comment period on the Federal Register, which would have originally expired on February 21, 2023. All public comments must now be filed by April 24, 2023.

Continue Reading Green Guides Comment Deadline Extended

The Federal Trade Commission (“FTC” or “Commission”) recently announced that it has adjusted the maximum civil penalty dollar amounts for violations of 16 provisions that the Commission enforces. The increase is required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, and is intended to account for inflation. The act directs agencies to implement annual inflation adjustments based on a prescribed formula. Given the uptick in FTC enforcement actions, companies are likely to begin feeling the impact of the increased penalties in the coming year.

As our readers likely recall, the Supreme Court’s 2021 ruling in AMG Capital Management LLC v. Federal Trade Commission removed a powerful tool that the FTC had previously relied on to pursue monetary relief in federal court. The Supreme Court unanimously held that the Federal Trade Commission cannot obtain equitable monetary relief, such as disgorgement or restitution, when it pursues district court litigation directly under Section 13(b) of the Federal Trade Commission Act (“FTC Act” or “Act”). Rather, to obtain such relief, the FTC must first follow its administrative adjudication procedures under Section 5 of the Act.

Continue Reading How Much Could Violating a FTC Rule Cost You? $50,120 Per Violation?

Yesterday, the Federal Trade Commission proposed a sweeping new rule that would ban employers from including non-compete terms in employment agreements with virtually all of their workers – from janitors to senior executives. Describing such agreements as an “exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses,” the FTC’s rule deems non-compete agreements to be an “unfair method of competition” under Section 5 of the FTC Act, without regard for any business justifications or reasonableness. Potential rulemaking against non-compete clauses has been percolating for some time and has support from the White House, but the breadth of the proposed rule is nonetheless surprising.

The FTC’s push for this rule under its Section 5 authority surely will spark legal—including constitutional—challenges that could delay implementation of any final rule for months, if not years. Companies need not immediately start rescinding or avoiding reasonably tailored non-compete agreements with employees, but should take note that the FTC is not likely to sit on the sidelines and wait for a final rule to come into effect before taking further action against some employers based on the scope of their non-compete agreements.  The proposed rulemaking and the FTC’s recent enforcement actions  targeting specific companies’ use of non-compete provisions as violations of Section 5 reflect the FTC’s and DOJ’s aggressive approach to antitrust enforcement in the labor markets – including the FTC’s desire to bring enforcement actions in this area even before any final rule goes into effect.

Continue Reading FTC Proposes Rule to Categorically Ban Non-Compete Agreements

The FTC kicked off the holiday season analyzing data on fraudulent online shopping, cryptocurrency, and employment advertisements that are popular on social media. The Commission also announced updates to the Eyeglass Rule while also announcing the public comment period for potential updates to the Green Guides. These stories and more after the jump.

Continue Reading FTC Updates (December 5 – December 16, 2022)

The FTC joined with the National Labor Relations Board in order to bolster efforts to protect workers against anticompetitive and unfair practices. It also announced a $25 million refund to U.S. and international consumers that were allegedly defrauded by a sweepstakes scheme. And for the first time in FTC history, the Commission brought an action under the Military Lending Act against a Jewelry company that allegedly mislead military families. These stories and more after the jump.

Continue Reading FTC Updates (July 18-22, 2022)

On July 7, 2022, the Federal Trade Commission (“FTC” or “Commission”) announced it is acting against grill manufacturer Weber-Stephen Products, LLC, arguing that Weber’s warranties illegally restrict consumers’ right-to-repair. The Weber complaint is the third salvo in the FTC’s recent string of right-to-repair administrative complaints, after issuing two similar complaints against Harley-Davidson Motor Company Group, LLC and MWE Investments, LLC mere weeks prior. The FTC’s recent action thus signals that it will continue prioritizing enforcement of tying rules under the Magnuson Moss Warranty Act (“MMWA”).

Continue Reading FTC Settles Actions Against Manufacturers for Illegal Repair Restrictions in Warranties

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.

Continue Reading FTC Issues Long-Awaited Updates to the Endorsement Guides

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