April 12, 2013
Earlier today, the U.S. Federal Trade Commission released 2013 Annual Highlights setting out its priorities over the past year, which generally include promoting online privacy and data security, fostering competition in high-tech industries and healthcare and protecting children and other vulnerable consumers from fraud.
In making the announcement, FTC Chairwoman Edith Ramirez said: “As we head into our second century, the FTC is dedicated to advancing consumer interests while encouraging innovation and competition in our dynamic economy.”
The FTC’s report summarizes its work in eleven general categories, including protecting consumer privacy, containing health care and drug costs, fostering innovation and competition, bringing challenges to deceptive advertising and marketing and protecting children.
Some of the interesting competition and deceptive advertising highlights of the FTC’s new report include:
– Enforcement statistics that include: enforcement actions that have focused on health care (31%), manufacturing (27%), pharmaceuticals (15%) and retail (14%); redress and disgorgement orders totaling $741.5 million; civil penalties totaling $63.6 million; and top consumer protection penalties of $478.9 million (John Beck), $40 million (Skechers USA, Inc.), $38.5 million (U.S. Mortgage Funding, Inc.) and $22.5 million (Google). Canada’s maximum penalties for misleading advertising (up to $10 million) look rather tepid by comparison. I also found it interesting that the FTC received more than two million consumer complaints (compared to about 20,000 received by the Competition Bureau last year).
– A discussion of the state action doctrine and, in particular, its challenge to the hospital merger-to-monopoly in FTC v. Phoebe Putney Health System, Inc. (raising the issue of whether the Georgia legislature had shielded the local hospital authority from federal antitrust review), in which the Supreme Court found that there was no evidence that the legislature contemplated that the hospital authorities would displace competition by consolidating hospital ownership. The Canadian Competition Bureau has also stepped up its interest in regulated markets and indicated that it intends to revisit Canada’s “regulated conduct doctrine” (RCD) in light of, among other things, recent criticism that excessive regulation in Canada and an uncertain RCD are impeding competition and limiting production.
A summary of its deceptive advertising enforcement, including in relation to health (the POM Wonderful case), performance (Your Baby Can Read! And Skechers cases) and false business start-up claims. Somewhat astonishing were the penalties achieved by the FTC in some cases, which included $478 million in relation to a “get-rich-quick” telemarketing and infomercial scam and $163 million in a case (Winfixer scareware) where defendants tricked consumers into thinking their computers were infected with malicious software to sell software to “fix” non-existent problems. Like the FTC, Canada’s Competition Bureau has continued to focus on advertising enforcement in the health, performance claims, telemarketing and mobile areas, among others.
– A discussion of its review of high-tech cases, including Google, describing its approach in the high-tech area as “balanced and fact-based”. In somewhat stark contrast to the yet ongoing Google case in Europe, the FTC says: “After an extensive review of the evidence, the Commission determined that the evidence did not provide a reason to believe that Google’s change to the design of its search results page harmed competition or consumers …” With Google having just been reported to have submitted proposed concessions to the European Commission, it appears that the enforcement outcome may be quite different in Europe.
For a copy of the FTC’s new report see: FTC Highlights – April 2012 – March 2013.
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