This week, the FTC took action focused on deceptive advertising on social media platforms, for health treatments, and consumer goods. For the fourth time this year, the FTC opposed noncompete agreements imposed on workers and also introduced a proposed rule banning noncompetes. These stories and more, after the jump.
Monday, March 13, 2023
2022 Performance Report, 2023-2024 Performance Plan, and 2024 Budget Request
- On Monday, the FTC submitted to Congress its Fiscal Year 2024 budget request, which included its Performance Plan for FY 2023 and FY 2024 and Performance Report for FY 2022. The Commission voted 3-0-1 to submit the request, with Commissioner Wilson not participating.
Tuesday, March 14, 2023
Closing Letter: “Made in USA” Claims
- On Tuesday, the FTC issued a closing letter to Counsel of Kaisa USA, Inc. The letter addressed “unqualified U.S.-origin claims in marketing materials” and described the “all or virtually all” standard, codified in the Made in USA Labeling Rule, 16 C.F.R. § 323, whereby products that claim to be made in the United States must have their final assembly, significant processing, and components in the United States. Additionally, marketers should not represent that an entire product line is U.S.-based when only certain products are made in the United States. Here, Kaisa removed “Made in USA” claims from pages of its catalogue and one of its products.
Wednesday, March 15, 2023
Consumer Protection: American Indian and Alaska Native Communities
- On Wednesday, the FTC issued a report to Congress about consumer issues affecting American Indian and Alaska Native communities. The report detailed the FTC’s enforcement, outreach, and education initiatives on these issues, as well as data analysis. FTC data show that government impersonation and price, sweepstakes, and lottery scams were most frequently reported. The report also summarized conversations with members of American Indian and Alaska Native communities about consumer issues. The report recommended expanding partnerships with these communities, tribal leaders, and advocates to inform the FTC’s efforts.
Unfair Methods of Competition: Noncompete Restrictions
- For the fourth time this year, the FTC opposed harmful noncompete agreements. On Wednesday, the FTC ordered Anchor Glass Container Corp. to drop noncompete restrictions and to suspend entering into, maintaining, or enforcing noncompete restrictions. For the next ten years, Anchor must provide new employees with a conspicuous notice allowing them to compete freely. The FTC’s complaint against the manufacturing company and its owners alleged that the company imposed illegal noncompete restrictions on over 300 employees. These restrictions prohibited employees from providing similar services for another United States employer and from selling products or services to Anchor’s customers and prospective customers. The Commission voted 3-1 to issue the administrative complaint and accept the consent agreement, with Commissioner Wilson issuing a dissenting statement. In her dissent, Commissioner Wilson criticized the complaint’s omissions. Specifically, the complaint lacked allegations, including that the company’s noncompetes were “unreasonable based on their temporal length, subject matter, or geographic scope,” or were enforced.
- In addition, the FTC proposed a new rule that would ban employers from imposing noncompete clauses on their workers.
Advertising and Marketing: Health Services
- Following allegations of bait-and-switch advertising of LASIK laser eye surgery, the FTC issued a final consent order requiring LCA-Vision to pay customers $1.25 million. The order also required LCA-Vision to conspicuously disclose when most consumers would not qualify for the promotional price. The complaint alleged that LCA-Vision advertised that customers could correct their vision for under $300 when, in fact, only 6.5% of customers were eligible for the advertised price for both eyes after their consultation. In addition, some advertisements allegedly failed to mention that the advertised price was per-eye only. In reality, LCA-Vision tended to quote patients with worse than near-normal vision between $1,800 and $2,295 per eye. The Commission voted 3-1 to approve the final consent order, with Commissioner Wilson dissenting.
Thursday, March 16, 2023
Contesting a Merger: E-cigarettes
- On Thursday, complaint counsel In the Matter of Altria Group, Inc. and JUUL Labs, Inc. submitted its opposition to Respondents’ Motion to Dismiss This Litigation as Moot or, in The Alternative, to Stay The Litigation and response to Respondents’ Motion to Take Official Notice. Complaint counsel argued that respondents voluntarily stopping their conduct does not moot the proceeding and that the Commission is able to grant effective relief. Complaint counsel also requested the reversal of the initial decision and to find that respondents had violated Section 1 of the Sherman Act and Section 7 of the Clayton Act. To read about this blog’s coverage of this matter, click here.
Advertising and Marketing: Social Media and Video Streaming 6(b) Study
- Per its 6(b) authority, the FTC issued orders to eight social media and video streaming platforms in an effort to combat fraudulent advertising. Consumers have lost an increasing amount of money to fraud on social media since 2017. In its recent orders, certain social media companies are required to provide information on how they monitor advertising and prevent fraudulent ads from reaching their users. In addition, these companies must report their ad revenue, ad views, and other metrics. The order is meant to assist the Commission in understanding the prevalence of deceptive advertising, consumers who may be harmed, as well as the platforms’ effectiveness in combatting fraudulent advertising. The Commission voted unanimously to issue the orders. For Commission Chair Khan’s Remarks Regarding the 6(b) Orders Concerning Deceptive Advertising on Social Media, click here. For Commissioner Wilson’s remarks, click here.
Credit Reporting: Small Business Credit Reports 6(b) Study
- On Thursday, the FTC ordered five firms in the credit reporting industry to provide detailed information about their products and services. The orders were geared toward helping small businesses navigate credit reports, where there is no federal law governing credit reporting. The inquiry included how these credit reporting companies collect and process information, how they market their reports, and whether and how these companies address errors in credit reports. The Commission voted unanimously to issue the 6(b) orders. For Chair Khan’s Remarks Regarding the 6(b) Study of Small Business Credit Reporting, click here. For Commissioner Wilson’s remarks, click here.
Fraudulent Health Claims
- The Department of Justice filed a case on behalf of the FTC against a doctor and health companies she controlled and operated for making fraudulent claims about treating serious health conditions. Per the proposed order, defendants must pay a $100,000 penalty and must not make unsubstantiated claims. According to the complaint, defendants used deceptive and misleading advertising for treatments for addiction, cancer, and chronic diseases. The Commission voted unanimously to file the complaint and proposed order.
Friday, March 17, 2023
FTC and DOJ Spring Enforcers Summit
- On March 27, the FTC and Justice Department’s Antitrust Division are scheduled to cohost the second Spring Enforcers Summit. Commission Chair Khan, Assistant Attorney General Jonathan Kanter, and FTC and DOJ senior staff will come together with international enforcers and state attorneys general. The Summit will cover enforcement priorities and strategies. The FTC has made the agenda and instructions for livestreaming the event publicly available.