ARTICLE
18 April 2024

FTC Updates (April 8 – April 12, 2024)

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Crowell & Moring LLP

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The FTC kept busy through the week of the ABA Antitrust Spring Meeting including an appearance by Chair Lina Khan at the Spring Meeting on an antitrust enforcement panel.
United States Consumer Protection
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The FTC kept busy through the week of the ABA Antitrust Spring Meeting including an appearance by Chair Lina Khan at the Spring Meeting on an antitrust enforcement panel. Beyond that, the FTC had enforcement actions, inter-governmental collaborations, and public engagement this week. This, and more, after the jump.

Monday, April 8, 2024

Bureau of Consumer Protection: Artificial Intelligence

  • The FTC has concluded its Voice Cloning Challenge, designed to promote consumer protection in a world of AI misuse, with four winning submissions. As we last reported when the Commission announced this event, the Challenge focused on the risks and potential abuse of voice cloning technologies through public engagement. The Challenge was the FTC's effort at "recognizing people who are pushing science forward and proposing different options to ensure a robust landscape of solutions," explained Stephanie Nguyen, the Commission's Chief Technologist. Additionally, this was the sixth challenge the FTC has held under the America COMPETES Act, which is aimed at developing innovative solutions to consumer protection issues. The judging panel for this Challenge consisted of representatives from academia, private business, and think tanks. Three of the four submissions were from individuals and small organizations, which collectively will split a total of $35,000 in prize money.

Tuesday, April 9, 2024

Bureau of Consumer Protection: Credit and Finance

  • The Commission has announced that it will be sending $1,200,000 in refunds to consumers who paid for supposed expert investment advice based on the of deceptive claims of Wealthpress and its owners. We first reported on the Commission's litigation against Wealthpress in a post from January 2023. Since that post, the defendants agreed to a settlement with the FTC which prohibits the defendants from making any claims about earnings without having written evidence to back those claims up. Additionally, the settlement requires that the defendants pay more than $1.2 million in monetary relief and $500,000 in civil penalties. These assets are now being used to send payments to nearly 20,000 consumers. The Commission advised that most consumers will receive a check in the mail, which should be cashed within 90 days as indicated on the check. Other consumers will receive a PayPal payment, which should be redeemed within 30 days. The FTC explained that any consumers with questions regarding the refund should contact the refund administrator, JND Legal Administration.

Wednesday, April 10, 2024

Bureau of Consumer Protection: Consumer Protection

  • The FTC has issued a report to Congress detailing the FTC's cooperation with state attorneys general (AGs) nationwide in law enforcement efforts and presenting best practices to ensure continued effective collaboration. The report, entitled "Working Together to Protect Consumers: A Study and Recommendations on FTC Collaboration with the State Attorneys General" presents legislative recommendations to enhance federal and state collaboration including: reinstating the FTC's authority to seek money for defrauded consumers and providing the Commission with independent authority for civil penalties. Samuel Levine, Director of the FTC's Bureau of Consumer Protection, commented that "[t]oday's consumer protection challenges require an all-hands-on-deck response, and our report details how the FTC is working closely with state enforces to share information, stop fraud, and ensure fairness in the marketplace." The Commission vote approving the report to Congress was 3-0-2, with Commissioners Melissa Holyoak and Andrew N. Ferguson not participating. Chair Lina M. Khan issued a separate statement, in which she was joined by Commissioners Rebecca Kelly Slaughter and Alvaro M. Bedoya. Commissioner Slaughter also issued a separate statement.

Thursday, April 11, 2024

Bureau of Competition: International Affairs

  • The Commission Chair Lina Khan, along with the Justice Department's Antitrust Division (DOJ) Assistant Attorney General Jonathan Kanter, and European Commission Executive Vice-President Margrethe Vestager met in Washington for the fourth meeting of the EU-US Joint Technology Competition Policy Dialogue (TCPD) focused on cooperation in ensuring and promoting fair competition in the digital economy. Chair Khan commented that the "Joint Technology Dialogue provides U.S. agencies and the European Commission a key opportunity to discuss emerging threats in a rapidly evolving digital economy." Similarly, Assistant Attorney General Kanter explained that "[e]xchanging best practices with out global counterparts helps us to more effectively serve the American people" as the "growth of data monopolies and rapid expansion of artitifical intelligence expand the competitive threats we face from dominant digital gatekeepers."

Bureau of Consumer Protection: Health Care

  • The FTC announced an action against Monument, Inc., an addiction treatment service, for allegedly improperly disclosing user's personal health data to third-party advertising platforms without consumer consent. As alleged in the Commission's complaint, Monument improperly shared users sensitive health information to third-party advertising platforms (like Meta and Google) despite promising to keep users' personal information private. The Commission also announced a proposed order with Monument which would prohibit Monument from disclosing health information for advertising and would require Monument to obtain users' affirmative consent before sharing health information with third parties. Furthermore, the proposed order would require Monument from mispresenting their data collection and disclosure practices as well as imposes a $2.5 million civil penalty, which will be suspended due to the company's inability to pay. If the company, however, is found to have misrepresented its finances, it will be required to pay the full amount. Samuel Levine, Director of the FTC's Bureau of Consumer Protection, commented that this action is part of the Commission's broader message: "Following on the heels of actions against GoodRx, BetterHelp, and Premom, the market should be getting the message that consumer health data should be handled with extreme caution."

Friday, April 12, 2024

Bureau of Consumer Protection: Consumer Privacy

  • The Commission has announced its finalized order prohibiting data broker X-Mode and its successor Outlogic from selling or otherwise sharing any sensitive location data following allegations that the company sold precise location data which could be used to track people's visits to sensitive locations, including medical and reproductive health clinics as well as places of worship. We last reported on the FTC's litigation against X-Mode/Outlogic in a post from January 2024 when the Commission issued its proposed order. Since then, the Commission finalized the order and gave final approval to the settlement. The Commission voted 3-0-2 to give final approval of the settlement with X-Mode/Outlogic. Commissioners Melissa Holyoak and Andrew N. Ferguson did not participate.

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