Antitrust Enforcement

December 8, 2016

The FTC is providing over $88 million in refunds to more than 2.7 million AT&T customers who had third-party charges added to their mobile bills without their consent, a tactic known as “mobile cramming.” The refunds to consumers relate to 2014 settlements with AT&T, and the companies behind two of the cramming schemes, Tatto and Acquinity. According to the FTC’s complaint, AT&T placed unauthorized third-party charges on its customers’ phone bills, usually in amounts of $9.99 per month, for ringtones and text message subscriptions containing love tips, horoscopes, and “fun facts.” The FTC alleged that AT&T kept at least 35 percent of the charges it imposed on its customers. FTC

November 30, 2016

The FTC has closed the book on a data broker operation that the agency alleges got personal information from people who thought they were applying for payday loans online, and sold it to a scam that tapped consumers’ bank accounts and credit cards without their consent. A stipulated order against Jason A. Kotzker resolves charges the FTC brought in August 2015, alleging that he and his co-defendants, instead of passing the information to legitimate payday lenders, sold it to companies like Ideal Financial Solutions Inc., which raided consumers’ accounts for at least $7.1 million. The order prohibits Kotzker from selling or disclosing consumers’ sensitive personal information, making misrepresentations about any financial or other product or service, and profiting from consumers’ personal information and failing to dispose of it properly. FTC

November 21, 2016

Following a public comment period, the FTC has approved a final consent order with Warner Bros. Home Entertainment Inc., settling charges that the company failed to adequately disclose that it paid online influencers to post gameplay videos. According to the FTC’s complaint, Warner Bros. deceived consumers during a marketing campaign for the video game Middle Earth: Shadow of Mordor, by failing to adequately disclose that it paid online “influencers” thousands of dollars to post positive gameplay videos on YouTube and social media. Over the course of the campaign, the sponsored videos were viewed more than 5.5 million times. The FTC also alleged Warner Bros. gave influencers a free advance-release version of the game and told them how to promote it. Warner Bros. also allegedly required the influencers to promote the game in a positive way and not to disclose any bugs or glitches they found. Under the final order, Warner Bros. is barred from failing to make such disclosures in the future and cannot misrepresent that sponsored content, including gameplay videos, are the objective, independent opinions of video game enthusiasts or influencers. FTC

November 15, 2016

Florida and five other states announced a settlement with the National Football League resolving antitrust concerns about the NFL’s league-wide mandatory price floor policy. The policy required each of the 32 NFL member teams to impose a price floor on all secondary market ticket sales on the NFL’s Ticket Exchange and related websites officially sanctioned by the league. This policy, which the NFL terminated after the investigation began, prohibited sellers from listing tickets for resale on the NFL’s officially sanctioned resale sites at a price lower than the face-value of the ticket. The settlement prohibits a league-wide mandatory price floor policy and includes disclosure requirements in cases where an individual team imposes its own price floor. Additionally, the settlement prohibits the NFL from directing or requiring ticketing practices among teams that are designed to preclude fans from using competing exchanges and prohibits the NFL from interfering with an individual team’s efforts to coordinate anti-fraud measures with competing secondary ticket exchanges. FL

November 15, 2016

The Federal Trade Commission today announced a new “Enforcement Policy Statement on Marketing Claims for Over-the-Counter (OTC) Homeopathic Drugs.” The policy statement was informed by an FTC workshop held last year to examine how such drugs are marketed to consumers. The FTC also released its staff report on the workshop, which summarizes the panel presentations and related public comments in addition to describing consumer research commissioned by the FTC. The policy statement explains that the FTC will hold efficacy and safety claims for OTC homeopathic drugs to the same standard as other products making similar claims. That is, companies must have competent and reliable scientific evidence for health-related claims, including claims that a product can treat specific conditions. FTC

November 10, 2016

The FTC has charged that in numerous instances, prepaid card company NetSpend Corporation deceived consumers, many of whom do not have bank accounts, about access to funds deposited on defendants’ debit cards. According to the FTC’s complaint, NetSpend tells consumers that its reloadable prepaid debit cards offer an alternative way to store and immediately access their funds. But once people have loaded funds onto the cards, many of them find they cannot access their money, either because NetSpend denies or delays activation of the card, or because it blocks consumers from using it. The FTC seeks to return consumers’ funds and ensure that NetSpend provides them with promised access to their funds in the future. FTC

November 8, 2016

The FTC is mailing checks totaling more than $3.7 million to people who lost money to Fortune Hi-Tech Marketing, a pyramid scheme whose operators were banned from multi-level marketing under a settlement with the FTC and the states of Illinois, Kentucky and North Carolina. In January 2013, the FTC and the states charged the Fortune Hi-Tech Marketing defendants with deceiving consumers by claiming they would earn significant income through selling various products and services if they signed up as FHTM representatives. Participants were required to pay substantial start-up costs and monthly fees to retain their positions with the company. FTC