Monday, December 6, 2021
Consumer Protection: FTC’s Franchise Rule
- The FTC filed an amicus brief in pending litigation to advise the Supreme Court that the FTC’s Franchise Rule cannot be used to determine whether a franchisee is an employee or an independent contractor. The Franchise Rule, codified as 16 C.F.R. §§ 436–437, requires franchisors to provide certain material disclosures to all potential franchisees. In its brief, the agency explained that it enacted this Rule in 1978 in response to widespread deception in the sale of franchises, and that it should preempt state laws only if they offer less protection to prospective franchisees.
Tuesday, December 7, 2021
Competition and International Policy
- Leadership from the FTC, DOJ Antitrust Division, and the Directorate-General for Competition of the European Commission met and issued the inaugural statement of the EU-U.S. Joint Technology Competition Policy Dialogue. In their statement, the agencies expressed a desire to “collaborate to ensure and promote fair competition” and to “explore new ways to facilitate coordination and knowledge and information exchanges” to respond to new challenges created by technological developments and the digital economy.
Bureau of Competition: Health Care & Antitrust
- The Commission filed an order settling pending antitrust litigation against Vyera Pharmaceuticals, LLC, Phoenixus AG, and Kevin Mulleady, who schemed with ‘Pharma Bro’ Martin Shkreli to illegally monopolize the life-saving drug Daraprim. When Vyera acquired Daraprim in 2015, it immediately raised the price per tablet from $17.50 to $750—an over 4,000% increase—and then used anticompetitive tactics to prevent others from creating cheaper generic versions of the drug. This order bans Mulleady from the pharmaceutical industry for seven years and requires Vyera and Phoenixus to pay $40 million in relief for victims. Shkreli himself is not part of the settlement and is set to begin trial later this month.
Wednesday, December 8, 2021
Bureau of Consumer Protection: Deceptive or Misleading Conduct
- The FTC released a data spotlight summarizing updated information on gift card scams. In the first nine months of 2021, 39,263 consumers reported using gift cards to pay a scammer, cumulating in a loss of $147.8 million. Both the number of consumer reports and the median amount reported lost have climbed steadily since 2018, with some consumers losing $5,000 or more this year. Over the past four years, gift cards have been the most frequently reported payment method for fraud, followed by credit cards and cryptocurrency. Scammers favor gift cards because they have fewer buyer protections than most other payment methods. Based on this data, the FTC issued a strong edict: “Whenever someone demands to be paid with a gift card, that’s a scam. It’s just that simple.”
Bureau of Consumer Protection: Deceptive Advertising and Marketing
- Consumers who fell victim to a business coaching scam will be receiving checks from the FTC totaling over $25.6 million. The scammers, under the names Coaching Department and Apply Knowledge, deceived consumers into buying business coaching programs with false promises that they could earn thousands of dollars per month working from home. The reimbursement funds stem from a settlement between the FTC and First Data Merchant Services, a payment processing company whom the FTC alleged repeatedly ignored warnings from banks and other entities that it was processing payments for lawbreaking companies.
Thursday, December 9, 2021
Bureau of Consumer Protection: Government and Business Impersonation Fraud
- The FTC announced that a virtual open meeting will be held on Thursday, December 16, 2021 to address “rampant government and business impersonation fraud.” This type of fraud is a “leading source” of consumer complaints and reported consumer financial losses, and it has only worsened during the pandemic. In the meeting, Chair Lina Khan will make brief remarks and will invite comments from members of the public who registered to do so. The Commission will then vote on an Advance Notice of Proposed Rulemaking to Combat Government and Business Impersonation Fraud.