PREPARED STATEMENT OF THE FEDERAL TRADE COMMISSION OVERSIGHT OF THE FEDERAL TRADE COMMISSION Before the COMMITTEE ON ENERGY AND COMMERCE SUBCOMMITTEE ON CONSUMER PROTECTION AND COMMERCE UNITED STATES HOUSE OF REPRESENTATIVES WASHINGTON DC MAY 8 2019 1 I INTRODUCTION Chairwoman Schakowsky Ranking Member McMorris Rodgers and members of the Subcommittee the Federal Trade Commission “FTC” or “Commission” is pleased to appear before you today to discuss the FTC’s work to protect consumers and promote competition 1 The FTC is an independent agency with three main bureaus the Bureau of Consumer Protection “BCP” the Bureau of Competition “BC” and the Bureau of Economics “BE” which supports both BCP and BC The FTC is the only federal agency with a broad mission to both protect consumers and maintain competition in most sectors of the economy Our jurisdiction includes privacy and data security consumer fraud mergers and acquisitions and anticompetitive tactics by pharmaceutical and other companies We enforce the law across a range of sectors including health care high technology and emerging industries The FTC has a long history of bipartisanship and cooperation and we work hard to maintain it The FTC has broad law enforcement responsibilities under the Federal Trade Commission Act 2 and enforces a wide variety of other laws ranging from the Clayton Act to the Fair Credit Reporting Act In total the Commission has enforcement or other responsibilities under more than 75 laws 3 The Commission pursues a vigorous and effective law enforcement program and the impact of its work is significant Its competition enforcement program is critically important to maintaining competitive markets across the country vigorous competition results in lower prices higher quality goods and services and innovative and beneficial new products and services 1 This written statement presents the views of the Federal Trade Commission The oral statements and responses to questions reflect the views of individual Commissioners and do not necessarily reflect the views of the Commission or any other Commissioner 2 15 U S C § 41 et seq 3 See https www ftc gov enforcement statutes 2 The FTC also investigates and prosecutes those engaging in unfair or deceptive acts or practices and seeks to do so without impeding lawful business activity The agency has a varied toolkit to advance its mission For example the Commission collects consumer complaints from the public and maintains one of the most extensive consumer protection complaint databases Consumer Sentinel The FTC and other federal state and local law enforcement agencies use these complaints in their law enforcement and policy efforts The FTC also has rulemaking authority In addition to the FTC’s Magnuson-Moss rulemaking authority Congress has given the agency discrete rulemaking authority under the Administrative Procedure Act “APA” over specific topics The agency regularly analyzes its rules including seeking public feedback to ensure their continued efficacy The FTC also educates consumers and businesses to encourage informed consumer choices compliance with the law and public understanding of the competitive process To complement these enforcement and public education efforts the FTC pursues a consumer protection and competition policy and research agenda to improve agency decisionmaking and engages in advocacy and education initiatives Last fall the Commission began its Hearings on Competition and Consumer Protection in the 21st Century 4 This extensive series of public hearings is exploring whether broad-based changes in the economy evolving business practices new technologies or international developments might require adjustments to competition and consumer protection law enforcement priorities and policy To date we have heard from more than 350 panelists and received more than 850 public comments The formal hearings will conclude shortly and we will be accepting public comments through at least the end 4 FTC Hearings on Competition and Consumer Protection in the 21st Century https www ftc gov policy hearingscompetition-consumer-protection see also FTC Press Release FTC Announces Hearings On Competition and Consumer Protection in the 21st Century June 20 2018 https www ftc gov news-events press-releases 2018 06 ftcannounces-hearings-competition-consumer-protection-21st 3 of June These hearings underscore the unique role that the FTC plays in the development of sound competition and consumer protection policy This testimony discusses the FTC’s work to protect U S consumers and competition including highlights of some of the agency’s major recent activities and initiatives It also discusses the Commission’s international efforts to protect consumers and promote competition II CONSUMER PROTECTION MISSION As the nation’s primary consumer protection agency the FTC has a broad mandate to protect consumers from unfair and deceptive practices in the marketplace including fraud We do this by among other things pursuing law enforcement actions to stop and deter unlawful practices and educating consumers and businesses about their rights and responsibilities The FTC’s enforcement and education efforts include working closely with federal state international and private sector partners on joint initiatives Among other issues the FTC works to protect privacy and data security helps ensure that advertising claims to consumers are truthful and not misleading addresses fraud across most sectors of the economy and combats illegal robocalls The FTC’s law enforcement orders prohibit defendants from engaging in further illegal activity impose other compliance obligations and in some cases ban defendants from engaging in certain conduct altogether Where appropriate the FTC collects money to return to harmed consumers During FY 2018 Commission actions resulted in over $1 6 billion being returned to consumers Specifically the Commission returned more than $83 3 million in redress to consumers and the FTC resolved matters—including in the Volkswagen 5 Amazon 6 and 5 FTC v Volkswagen Group of America Inc No 3 15-md-02672-CRB N D Cal May 17 2017 https www ftc gov enforcement cases-proceedings 162-3006 volkswagen-group-america-inc 6 FTC v Amazon com Inc No 2 14-cv-01038 W D Wash Apr 4 2017 https www ftc gov enforcement casesproceedings 122-3238 amazoncom-inc 4 NetSpend 7 matters—that required defendants to self-administer consumer refund programs worth more than $1 6 billion The FTC also collected civil penalties worth more than $2 4 million and forwarded an additional $8 5 million to the U S Treasury in FY 2018 A Protecting Consumer Privacy and Data Security Since the enactment of the Fair Credit Reporting Act “FCRA” 8 in 1970 the FTC has served as the chief federal agency charged with protecting consumer privacy With the development of the internet as a commercial medium in the 1990s the FTC expanded its focus on privacy to reflect the growing collection use and sharing of consumer data in the commercial marketplace The Commission’s primary source of legal authority in the privacy and data security space is Section 5 of the FTC Act which prohibits deceptive or unfair commercial practices 9 Under Section 5 and other authorities granted by Congress the FTC has aggressively pursued privacy and data security cases in myriad areas including children’s privacy financial privacy health privacy and the Internet of Things 10 To date the Commission has brought more than 65 cases alleging that companies failed to implement reasonable data security safeguards and more than 60 general privacy cases 11 Section 5 however is not without its limitations For example Section 5 does not allow the Commission to seek civil penalties for the first offense It also excludes non-profits and common 7 FTC v NetSpend Corp No 1 16-cv-04203-AT N D Ga Apr 10 2017 https www ftc gov enforcement casesproceedings netspend-corporation 8 15 U S C § 1681 Among other things the FCRA prohibits the unauthorized disclosure of sensitive data used for credit employment and other decisions 9 15 U S C § 45 The Commission also enforces sector-specific statutes containing privacy and data security provisions such as the Gramm-Leach-Bliley Act “GLB Act” Pub L No 106-102 113 Stat 1338 1999 codified as amended in scattered sections of 12 and 15 U S C and the Children’s Online Privacy Protection Act “COPPA” 15 U S C §§ 6501-6506 10 See e g FTC PRIVACY DATA SECURITY UPDATE 2017 Jan 2018 https www ftc gov reports privacy-datasecurity-update-2017-overview-commissions-enforcement-policy-initiatives Id 11 Id 5 carriers from the Commission’s authority even when the acts or practices of these market participants have serious implications for consumer privacy and data security To better equip the Commission to meet its statutory mission to protect consumers we urge Congress to enact privacy and data security legislation enforceable by the FTC which grants the agency civil penalty authority targeted APA rulemaking authority and jurisdiction over non-profits and common carriers 12 While the Commission believes new authority could be very beneficial for American consumers we also will continue to use every tool currently at our disposal to address consumer harm For example the Commission protects children’s privacy online by enforcing the Children's Online Privacy Protection Act COPPA We recently alleged that Unixiz doing business as iDressup com violated the COPPA Rule by failing to obtain parental consent prior to collecting personal information from children as well as failing to protect children’s personal information 13 The FTC’s complaint also alleged that the company stored and transmitted users’ personal information in plain text failed to implement an intrusion detection and prevention system and failed to monitor for potential security incidents As a result a hacker accessed the personal information of approximately 2 1 million users including 245 000 users under the age of 13 And in March the FTC announced a settlement with the operators of the popular video social networking app Musical ly now known as Tik Tok for COPPA violations 14 The FTC alleged that the company collected children’s personal information online without first obtaining parental 12 Commissioner Phillips supports congressional efforts to consider consumer data privacy legislation He believes legislation should be based on harms that Congress agrees warrant a remedy and that tools like penalties and rulemaking should be calibrated carefully to address those harms Commissioner Phillips believes Congress should also give appropriate consideration to the trade-offs involved in new regulation and with regard to rulemaking reserve to itself fundamental value judgments appropriately made by the legislature Finally Commissioner Phillips believes data security legislation is a critical step Congress should also take to protect consumer privacy 13 U S v Unixiz Inc d b a i-Dressup com et al No 5 19-cv-02222 N D Cal Apr 24 2019 https www ftc gov enforcement cases-proceedings 172-3002 unixiz-inc-doing-business-i-dressupcom 14 U S v Musical ly et al No 2 19-cv-1439 C D Ca Mar 27 2019 https www ftc gov enforcement casesproceedings 172-3004 musically-inc 6 consent Because COPPA allows the Commission to seek civil penalties for its violations the defendants agreed to pay a $5 7 million dollar civil penalty the largest ever obtained by the Commission in a COPPA case Further examples of data security enforcement include the Commission’s settlement with Uber Technologies over the company’s alleged failure to reasonably secure sensitive consumer data stored in the cloud 15 As a result an intruder allegedly accessed personal information about Uber customers and drivers including more than 25 million names and email addresses 22 million names and mobile phone numbers and 600 000 names and driver’s license numbers Uber suffered a second larger breach of drivers’ and riders’ data in October-November 2016 and failed to disclose that breach to consumers or the FTC for more than a year despite being the subject of an ongoing FTC investigation of its data security practices during that time Among other things the final order prohibits Uber from misrepresenting how it monitors internal access to consumers’ personal information and the extent to which it protects personal information with the threat of strong civil penalties if it fails to comply 16 And in May 2018 the Commission resolved allegations that PayPal’s Venmo peer-to-peer payment service misled consumers about their ability to control the privacy of their Venmo transactions and the extent to which their financial accounts were protected by “bank grade security systems ” 17 Just this past month the Commission settled with an online rewards website Clixsense com for its alleged failure to take appropriate steps to secure consumers’ data 18 The FTC alleged that 15 See FTC Press Release Federal Trade Commission Gives Final Approval to Settlement with Uber Oct 26 2018 https www ftc gov news-events press-releases 2018 10 federal-trade-commission-gives-final-approval-settlementuber 16 As discussed above because the FTC does not have civil penalty authority under Section 5 it could not require Uber to pay a civil penalty in the first instance 17 PayPal Inc No C-4651 May 24 2018 https www ftc gov enforcement cases-proceedings 162-3102 paypal-incmatter 18 James V Grago Jr also d b a ClixSense com Matter No 1723003 Apr 24 2019 proposed consent order https www ftc gov enforcement cases-proceedings 172-3003 james-v-grago-jr-doing-business-clixsensecom 7 the company’s inadequate security—including its storage of personal information in plain text and its failure to perform vulnerability and penetration testing—allowed hackers to gain access to the company’s network through a browser extension downloaded by the company These failures resulted in hackers gaining access to personal information regarding 6 6 million consumers over 500 000 of whom were U S consumers In addition to its enforcement efforts in the privacy and data security areas the Commission seeks to improve agency decision-making through its policy initiatives Last fall for example the Commission held four days of panels that specifically addressed consumer privacy and data security 19 The Commission also announced its fourth PrivacyCon which will take place on June 27 an annual event that explores evolving privacy and data security research 20 The Commission also is empowered to conduct industry studies related to privacy and data security under Section 6 b of the FTC Act 21 In March we issued 6 b orders to several internet service providers to evaluate their privacy practices 22 As we have in the past we will use the information we learn from this study to better inform our policy and enforcement work The Commission continues to work closely with our law enforcement partners in the European Union “EU” and its member states to ensure the success of the EU-U S Privacy Shield framework Under the EU’s General Data Protection Regulation “GDPR” companies are required to meet certain data protection requirements in order to transfer consumer data from the EU to other jurisdictions Privacy Shield—a voluntary mechanism that companies can use to comply with the 19 See FTC Press Release FTC Announces Sessions on Consumer Privacy and Data Security as Part of Its Hearings on Competition and Consumer Protection in the 21st Century Oct 26 2018 https www ftc gov news-events pressreleases 2018 10 ftc-announces-sessions-consumer-privacy-data-security-part-its 20 See FTC Press Release FTC Announces PrivacyCon 2019 and Calls for Presentations Oct 24 2018 https www ftc gov news-events press-releases 2018 10 ftc-announces-privacycon-2019-calls-presentations 21 15 U S C § 46 b 22 See FTC Press Release FTC Seeks to Examine the Privacy Practices of Broadband Providers Mar 26 2019 https www ftc gov news-events press-releases 2019 03 ftc-seeks-examine-privacy-practices-broadband-providers 8 GDPR when transferring data from Europe to the United States and which facilitates billions of dollars in transatlantic data flows—is enforced by the FTC with respect to those participants under its jurisdiction 23 Last fall for example the Commission announced settlements with four companies that we alleged had falsely claimed Privacy Shield certification 24 And in September 2018 Chairman Simons along with the Secretary of Commerce and our European counterparts participated in the second annual review of the Privacy Shield framework culminating in a European Commission recommendation for continued FTC enforcement in the Privacy Shield area 25 Our Privacy Shield approach is built on four pillars referrals from the Department of Commerce priority consideration of referrals from the European Union checking for Privacy Shield violations as part of every privacy investigation and proactive monitoring of Privacy Shield participants Finally many of the FTC’s privacy and data security investigations and cases involve complex facts and technologies and well-financed defendants often requiring outside experts which can be costly It is critical that the FTC have sufficient resources to support its investigative and litigation needs including expert work particularly as demands for enforcement in this area continue to grow B Protecting Consumers from Fraud Fighting fraud is a major focus of the FTC’s law enforcement efforts The Commission’s anti-fraud program tracks down and stops some of the most egregious scams that prey on U S 23 See www privacyshield gov and www ftc gov tips-advice business-center privacy-and-security privacy-shield Companies can also join a Swiss-U S Privacy Shield for transfers from Switzerland 24 See FTC Press Release FTC Reaches Settlements with Four Companies That Falsely Claimed Participation in the EU-U S Privacy Shield Sept 27 2018 https www ftc gov news-events press-releases 2018 09 ftc-reachessettlements-four-companies-falsely-claimed 25 See Report from the Commission to the European Parliament and the Council on the Second Annual Review of the Functioning of the EU-U S Privacy Shield COM 2018 860 final https ec europa eu info sites info files report_on_the_second_annual_review_of_the_eu-us_privacy_shield_2018 pdf 9 consumers—often the most vulnerable consumers who can least afford to lose money In 2018 imposter scams became the top consumer fraud complaint in part due to the rise in reports about government imposter scams 26 Fraudsters falsely claiming to be government agents including the Social Security Administration IRS and even the FTC family members or well-known tech companies contact consumers These fraudsters pressure them to send money often via cash-like payment methods such as gift cards or money transfers or trick them into providing personal information Many of these scams target older Americans In response to the rise in imposter complaints the FTC has filed multiple cases against defendants who deceptively pose as the government or well-known tech companies For example the FTC recently brought two actions against defendants for falsely claiming affiliations with the federal government The Commission charged Sunkey Publishing with using copycat military recruitment websites to trick consumers seeking military careers into providing their personal information according to the complaint Sunkey then sold the information to post-secondary schools as part of its lead generation business 27 The Commission’s action against American Immigration Center stopped an alleged scheme using deceptive websites and advertising that falsely implied an affiliation with the U S Citizenship and Immigration Services to dupe legal residents trying to renew their green cards or apply for naturalization 28 26 FTC Press Release Imposter Scams Top Complaints Made to FTC in 2018 Feb 28 2019 https www ftc gov news-events press-releases 2019 02 imposter-scams-top-complaints-made-ftc-2018 27 FTC Press Release FTC FTC Takes Action against the Operators of Copycat Military Websites Sept 6 2018 https www ftc gov news-events press-releases 2018 09 ftc-takes-action-against-operators-copycat-military-websites 28 FTC Press Release American Immigration Center Settles with FTC on Government Imposter Allegations Oct 16 2018 https www ftc gov news-events press-releases 2018 10 american-immigration-center-settles-ftc-governmentimposter The court entered the Stipulated Order for Permanent Injunction and Monetary Judgment against the defendants on December 7 2018 29 FTC Press Release FTC Halts Tech Support Scam as Part of Major Initiative Focused on Older Adults Hit Hardest by These Scams Mar 7 2019 https www ftc gov news-events pressreleases 2019 03 ftc-halts-tech-support-scam-part-major-initiative-focused-older 10 The Commission also helps older Americans protect themselves from fraud Last month the FTC joined federal state and international law enforcement partners in announcing a nationwide and international crackdown on elder fraud schemes with a particular focus on technical support scams Technical support scams dupe consumers into believing their computers are infected with viruses and malware and then charge them hundreds of dollars for unnecessary repairs As part of that initiative the FTC filed suit against technical support operator Elite IT Partners 29 developed new consumer education materials to help consumers avoid falling victim to these scams 30 and released new complaint data that illustrates the disproportionate effect these scams have on older adults 31 Over the last year the FTC has targeted business opportunity scams filing numerous actions against defendants who promise consumers a legitimate opportunity to earn money if consumers will pay for defendants’ “coaching” services In reality the “coaching” services provide no value to consumers and are typically nothing more than a handful of training videos and documents with generic information In Digital Altitude the Commission brought an action against defendants who allegedly defrauded consumers out of millions of dollars—some paying more than $50 000—by promising of individualized coaching on how to run an online business 32 The Commission also brought separate actions against defendants in FBA Stores 33 and with the 29 FTC Press Release FTC Halts Tech Support Scam as Part of Major Initiative Focused on Older Adults Hit Hardest by These Scams Mar 7 2019 https www ftc gov news-events press-releases 2019 03 ftc-halts-tech-support-scampart-major-initiative-focused-older 30 See How to Spot Avoid and Report Tech Support Scams https www consumer ftc gov articles how-spot-avoidand-report-tech-support-scams 31 See FTC Consumer Protection Data Spotlight Older Adults Hardest Hit by Tech Support Scams Mar 7 2019 https www ftc gov news-events blogs data-spotlight 2019 03 older-adults-hardest-hit-tech-support-scams 32 FTC Press Release FTC Obtains Court Order Halting Business Coaching Scheme Feb 8 2018 https www ftc gov news-events press-releases 2018 02 ftc-obtains-court-order-halting-business-coaching-scheme 33 FTC Press Release FTC Action Halts a Large Deceptive Business Opportunity Scheme Mar 23 2018 https www ftc gov news-events press-releases 2018 03 ftc-action-halts-large-deceptive-business-opportunity-scheme 11 Attorney General of Minnesota against defendants in Sellers Playbook 34 based on allegations that the defendants falsely claimed they could teach consumers “the secrets for making money on Amazon ” The Commission’s actions shut down three large operations that resulted in over $100 million in losses to consumers The Commission’s fraud cases also extend to sprawling international scams The Commission charged the defendants in MOBE—competitors of Digital Altitude—for running an international coaching scam that the FTC alleged took more than $300 million from thousands of American consumers 35 The Commission also recently filed an action against defendants in Sanctuary Belize a massive land sale scam that allegedly bilked over $100 million from consumers largely retirees According to the complaint recidivist Andris Pukke perpetrated an international scheme selling lots in a development in remote southern Belize with promises that he never intended to keep The FTC shut down the enterprise by obtaining a temporary restraining order and preliminary injunction and continues to litigate the matter 36 The FTC frequently works with other law enforcement agencies to tackle widespread fraud In July 2018 the FTC launched “Operation Donate with Honor ” a coordinated effort to target fraudulent and deceptive fundraising for military and veterans’ causes that has resulted in over 100 law enforcement actions 37 As part of that initiative the FTC has announced four cases with several 34 FTC Press Release FTC and State of Minnesota Halt Sellers Playbook’s Get Rich Scheme Aug 6 2018 https www ftc gov news-events press-releases 2018 08 ftc-state-minnesota-halt-sellers-playbooks-get-rich-scheme 35 FTC Press Release FTC Action Halts MOBE a Massive Internet Business Coaching Scheme June 11 2018 https www ftc gov news-events press-releases 2018 06 ftc-action-halts-mobe-massive-internet-business-coachingscheme 36 FTC Press Release At FTC’s Request Court Halts Massive “Sanctuary Belize” Real Estate Investment Scam Nov 8 2018 https www ftc gov news-events press-releases 2018 11 ftcs-request-court-halts-massive-sanctuary-belizereal-estate 37 FTC Press Release Operation Donate with Honor Law Enforcers Unite to Challenge Deceptive Fundraising Jul 19 2018 https www ftc gov news-events blogs business-blog 2018 07 operation-donate-honor-law-enforcers-unitechallenge This initiative included 54 Attorneys General from all 50 states the District of Columbia American Samoa Guam and Puerto Rico and 16 state agencies that oversee charities 12 state Attorneys General to shut down sham charity operations that were using consumers’ generous donations for private benefits and spent very little of the donated funds on the charitable programs 38 The FTC strives to stay ahead of scammers by analyzing Sentinel complaints to help raise public awareness about fraud In October 2018 the FTC launched its Consumer Protection Data Spotlight series to alert law enforcers industry and the public about growing threats and important patterns identified in Sentinel data The Spotlight explores data over time showing how scammers change tactics and catch consumers off guard 39 In addition the FTC is making Sentinel data more accessible to state and local governments the media academics and the public-at-large by publishing interactive dashboards that enable people to see what kind of fraud is affecting their state or large metropolitan area 40 C Truthfulness in National Advertising Ensuring that advertising is truthful and not misleading has long been one of the FTC’s core missions It allows consumers to make well-informed decisions about how to best use their resources and promotes the efficient functioning of market forces by encouraging the dissemination of accurate information 38 FTC State of Missouri v Disabled Police and Sheriffs Foundation Inc et al No 4 19-cv-00667 E D Mo Mar 28 2019 https www ftc gov enforcement cases-proceedings 172-3128 disabled-police-sheriffs-foundation-inc FTC State of Florida Office of the Attorney General v American Veterans Foundation Inc et al No 8 18-cv-00744 M D Fla Mar 28 2019 https www ftc gov enforcement cases-proceedings 172-3163 american-veteransfoundation-inc FTC et al v Help the Vets Inc et al No 6 18-cv-1153-Orl-41KRS M D Fla July 19 2018 https www ftc gov enforcement cases-proceedings 172-3159 help-vets-inc FTC v Travis Deloy Peterson No 4 1800049-DN D Utah July 16 2018 https www ftc gov enforcement cases-proceedings 182-3049 veterans-america 39 The first Spotlight identified a sharp rise in gift cards—particularly iTunes and Google Play cards—as a payment method for scams See FTC Consumer Protection Data Spotlight Scammers Increasingly Demand Payment by Gift Card Oct 2018 https www ftc gov news-events blogs data-spotlight 2018 10 scammers-increasingly-demandpayment-gift-card Most recently the Spotlight pointed to the dramatic increase in reports about imposters passing themselves off as Social Security Administration officials which is happening just as reports about IRS imposter scams are waning See FTC Consumer Protection Data Spotlight Growing Wave of Social Security Imposters Overtakes IRS Scam Apr 2019 https www ftc gov news-events blogs data-spotlight 2019 04 growing-wave-social-securityimposters-overtakes-irs-scam 40 See generally FTC FTC Consumer Sentinel Network Apr 8 2019 https public tableau com profile federal trade commission 13 For example the agency has continued to bring cases challenging false and unsubstantiated health claims including those targeting older consumers consumers affected by the opioid crisis and consumers with serious medical conditions The Commission has brought cases challenging products that claim to improve memory and ward off cognitive decline relieve joint pain and arthritis symptoms and even reverse aging 41 We have challenged bogus claims that treatments could cure treat or mitigate various serious diseases and ailments including those affecting children and older consumers 42 We have brought law enforcement actions against advertisers and ad agencies who allegedly used native advertising—commercial advertising masquerading as editorial content—to deceptively sell health products such as mosquito repellants during the Zika virus outbreak and cognitive improvement supplements 43 The Commission also has sued companies that claimed allegedly without scientific evidence that using their products could alleviate the symptoms of opioid withdrawal and increase the likelihood of overcoming opioid dependency 44 The Commission obtained an order barring a marketer from making deceptive claims about its products’ ability to mitigate the side effects of cancer treatments 45 And we have issued 41 See e g Telomerase Activation Sci Inc et al No C-4644 Apr 19 2018 https www ftc gov enforcement casesproceedings 142-3103 telomerase-activation-sciences-inc-noel-thomas-patton-matter FTC v Health Research Labs Inc No 2 17-cv-00467 D Maine Nov 30 2017 https www ftc gov enforcement cases-proceedings 1523021 health-research-laboratories-llc 42 See e g FTC v Regenerative Med Grp Inc No 8 18-cv-01838 C D Cal filed Oct 12 2018 https www ftc gov enforcement cases-proceedings 172-3062 regenerative-medical-group-inc A O Enters Inc No C-4670 Feb 21 2019 https www ftc gov enforcement cases-proceedings 172-3016 ao-enterprises-doing-businessiv-bars-aaron-k-roberts-matter 43 See e g FTC v Glob Cmty Innovations LLC No 5 19-CV-00788 N D Ohio Apr 10 2019 https www ftc gov enforcement cases-proceedings 162-3135 global-community-innovations-llc-et-al-geniux Creaxion Corp No C-4668 Feb 8 2019 https www ftc gov enforcement cases-proceedings 172-3066 creaxioncorp Inside Publ’ns LLC No C-4669 Feb 8 2019 https www ftc gov enforcement cases-proceedings 1723067 inside-publications-llc 44 FTC v Catlin Enters Inc No 1 17-cv-403 W D Tex May 17 2017 https www ftc gov enforcement casesproceedings 1623204 catlin-enterprises-inc In addition in conjunction with the FDA the FTC issued letters to companies that appeared to be making questionable claims in order to sell addiction or withdrawal remedies See FTC Press Release FTC FDA Warn Companies about Marketing and Selling Opioid Cessation Products Jan 24 2018 https www ftc gov news-events press-releases 2018 01 ftc-fda-warn-companies-about-marketing-selling-opioidcessation 45 FTC v CellMark Biopharm No 2 18-cv-00014-JES-CM M D Fla Jan 12 2018 https www ftc gov enforcement cases-proceedings 162-3134 cellmark-biopharma-derek-e-vest 14 joint warning letters with the Food and Drug Administration to marketers who claim their dietary supplements and cannabidiol “CBD” products treat or prevent serious diseases including Alzheimer’s disease and cancer 46 When consumers with serious health concerns fall victim to unsupported health claims they may put their health at risk by avoiding proven therapies and treatments Through consumer education including the FTC’s advisories the agency urges consumers to check with a medical professional before starting any treatment or product to treat serious medical conditions 47 D Illegal Robocalls Illegal robocalls also remain a significant consumer protection problem and one of consumers’ top complaints to the FTC These calls disturb consumers’ privacy and frequently use fraud and deception to pitch goods and services leading to significant economic harm In FY 2018 the FTC received more than 5 7 million complaints about unwanted calls including 3 7 million complaints about robocalls 48 The FTC has used all the tools at its disposal to fight these illegal calls including 141 enforcement actions to date 49 46 See FTC Press Release FTC Joins FDA in Sending Warning Letters to Companies Advertising and Selling Products Containing Cannabidiol CBD Claiming to Treat Alzheimer’s Cancer and Other Diseases Apr 2 2019 https www ftc gov news-events press-releases 2019 04 ftc-joins-fda-sending-warning-letters-companies-advertising FTC Press Release FTC and FDA Send Warning Letters to Companies Selling Dietary Supplements Claiming to Treat Alzheimer’s Disease and Remediate or Cure Other Serious Illnesses Such as Parkinson’s Heart Disease and Cancer Feb 11 2019 https www ftc gov news-events press-releases 2019 02 ftc-fda-send-warning-letters-companiesselling-dietary 47 FTC Consumer Blog Treatments and Cures https www consumer ftc gov topics treatments-cures 48 See Do Not Call Registry Data Book 2018 Complaint Figures for FY 2018 https www ftc gov reports national-donot-call-registry-data-book-fiscal-year-2018 49 See FTC Robocall Initiatives https www consumer ftc gov features feature-0025-robocalls Since establishing the Do Not Call Registry in 2003 the Commission has fought vigorously to protect consumers’ privacy from unwanted calls Indeed since the Commission began enforcing the Do Not Call provisions of the Telemarketing Sales Rule “TSR” in 2004 the Commission has brought enforcement actions seeking civil penalties restitution for victims of telemarketing scams and disgorgement of ill-gotten gains against 444 corporations and 358 individuals As a result of the 125 cases resolved thus far the Commission has collected over $121 million in equitable monetary relief and civil penalties See Enforcement of the Do Not Call Registry https www ftc gov news-events media-resources do-not-callregistry enforcement In August 2017 the FTC and its law enforcement partners achieved an historic win in a longrunning fight against unwanted calls when a federal district court in Illinois issued an order imposing a $280 million 15 The FTC’s most recent law enforcement crackdown stopped four separate robocall operations 50 For example in FTC v Christiano the FTC obtained a $1 35 million civil penalty and a ban on providing an autodialer to anyone engaged in telemarketing against two technology companies and their owner for knowingly providing the tools that unlawful telemarketers used to blast out billions of illegal robocalls 51 In another case from the recent crackdown 52 the FTC sued a recidivist robocaller and his partners for allegedly running a Google rankings scam that used robocalls to reach their victims and bombarded individuals who did not own businesses with the same robocalls 53 In April a court granted the FTC’s motion for summary judgment banning him and one of his co-defendants from all telemarketing and imposing a $3 3 million judgment Despite the FTC’s vigorous law enforcement program technological advances continue to permit bad actors to place millions or even billions of calls often from abroad at very low cost and in ways that are difficult to trace This phenomenon continues to infuriate consumers and challenge enforcers Recognizing that law enforcement while critical is not enough to solve the problem of illegal calls the FTC has taken steps to spur the marketplace to develop technological solutions For instance from 2013 to 2015 the FTC led four public challenges to incentivize innovators to help tackle the unlawful robocalls that plague consumers 54 The FTC’s challenges contributed to a shift penalty against Dish Network—the largest penalty ever issued in a Do Not Call case U S et al v Dish Network L L C No 309-cv-03073-JES-CHE C D Ill Aug 10 2017 https www ftc gov enforcement casesproceedings 052-3167 dish-network-llc-united-states-america-federal-trade 50 See FTC Press Release FTC Crackdown Stops Operations Responsible for Billions of Illegal Robocalls Mar 26 2019 https www ftc gov news-events press-releases 2019 03 ftc-crackdown-stops-operations-responsible-billionsillegal 51 FTC v James Christiano et al No 8 18-cv-00936 C D Cal June 5 2018 https www ftc gov enforcement casesproceedings 162-3124 james-christiano-et-al-netdotsolutions-inc 52 FTC v Pointbreak Media LLC et al No 18-cv-61017 S D Fla May 23 2018 https www ftc gov enforcement cases-proceedings 172-3182 pointbreak-media-llc-0 53 Previously in 2017 the FTC settled claims with Ramsey for illegal robocalls and calls to numbers listed on the National Do Not Call Registry See FTC v Ramsey et al No 9 17-cv-80032 S D Fla Jan 13 2017 https www ftc gov enforcement cases-proceedings 132-3254 justin-ramsey 54 The first challenge in 2013 called upon the public to develop a consumer-facing solution to block illegal robocalls One of the winners “NomoRobo ” was on the market within 6 months after being selected by the FTC NomoRobo which reports blocking over 600 million calls to date is being offered directly to consumers by a number of 16 in the development and availability of technological solutions in this area particularly call-blocking and call-filtering products Consumers can access information about potential solutions available to them on the FTC’s website 55 The telecommunications industry has also developed a new framework SHAKEN STIR which is designed to limit illegitimate number spoofing and reduce illegal robocalls The FTC continues to engage with industry stakeholders and supports the industry initiative to authenticate caller ID numbers The FTC also regularly works with its state federal and international partners to combat illegal robocalls 56 For many years the Commission has recommended eliminating the common carrier exemption The exemption is outdated and no longer makes sense in today’s marketplace where the lines between telecommunications and other services are increasingly blurred It impedes the FTC’s work tackling illegal robocalls and more broadly circumscribes other enforcement initiatives For example a carrier that places or assists and facilitates illegal telemarketing might argue that it is beyond the Commission’s reach because of the common carrier exemption Likewise the exemption may frustrate the Commission’s ability to obtain complete relief for consumers when telecommunications providers and is available as an app on iPhones See Press Release FTC Announces Robocall Challenge Winners Apr 2 2013 https www ftc gov news-events press-releases 2013 04 ftc-announces-robocallchallenge-winners see also Press Release FTC Awards $25 000 Top Cash Prize for Contest-Winning Mobile App That Blocks Illegal Robocalls Aug 17 2015 https www ftc gov news-events press-releases 2015 08 ftc-awards-25000top-cash-prize-contest-winning-mobile-app-blocks Press Release FTC Announces Winners of “Zapping Rachel” Robocall Contest Aug 28 2014 https www ftc gov news-events press-releases 2014 08 ftc-announces-winnerszapping-rachel-robocall-contest 55 See https www consumer ftc gov features how-stop-unwanted-calls 56 See e g FTC Press Release FTC and FCC to Host Joint Policy Forum on Illegal Robocalls Mar 22 2018 www ftc gov news-events press-releases 2018 03 ftc-fcc-host-joint-policy-forum-illegal-robocalls FTC Press Release FTC and FCC Seek Exhibitors for an Expo Featuring Technologies to Block Illegal Robocalls Mar 7 2018 www ftc gov news-events press-releases 2018 03 ftc-fcc-seek-exhibitors-expo-featuring-technologies-block-illegal Memorandum of Understanding Among Public Authorities of the Unsolicited Communications Enforcement Network Pertaining to Unlawful Telecommunications and SPAM May 2016 https www ftc gov policy cooperationagreements international-unlawful-telecommunications-spam-enforcement-cooperation FTC Press Release FTC Signs Memorandum of Understanding With Canadian Agency To Strengthen Cooperation on Do Not Call Spam Enforcement Mar 24 2016 https www ftc gov news-events press-releases 2016 03 ftc-signs-memorandumunderstanding-canadian-agency-strengthen 17 there are multiple parties some of whom are common carriers It also may pose difficulties when a company engages in deceptive or unfair practices involving a mix of common carrier and noncommon carrier activities Finally litigation has been complicated by entities that attempt to use their purported status as common carriers to shield themselves from FTC enforcement 57 E Consumer and Business Education and Outreach Public outreach and education is another critical element of the FTC’s efforts to fulfill its consumer protection mission The Commission’s education and outreach programs reach tens of millions of people each year through the FTC’s website the media and partner organizations that disseminate consumer information on the agency’s behalf The FTC delivers actionable practical plain-language guidance on dozens of issues and updates its consumer education materials whenever it has new information to share The FTC disseminates these tips through articles blog posts infographics videos social media and education campaigns For example in response to the enactment of the Economic Growth Regulatory Relief and Consumer Protection Act 58 which allows consumers nationwide to freeze their credit and place year-long fraud alerts for free the Commission helped consumers take advantage of the new protections by updating IdentityTheft gov revising its identity theft publications and providing blogs webinars and podcasts in collaboration with a wide range of partners 59 57 See e g Answer and Affirmative Defenses of Defendant Pacific Telecom Communications Group at 9 17-20 Dkt 19 FTC et al v Caribbean Cruise Line et al No 0 15-cv-60423 S D Fla June 2 2015 https www ftc gov enforcement cases-proceedings 122-3196-x150028 caribbean-cruise-line-inc 58 Pub L No 115-174 59 See FTC Press Release Starting Today New Federal Law Allows Consumers to Place Free Credit Freezes and Yearlong Fraud Alerts Sept 21 2018 https www ftc gov news-events press-releases 2018 09 starting-today-newlaw-allows-consumers-place-free-credit-freezes 18 The FTC also tailors its guidance to serve specific audiences including older adults 60 A recent FTC report to Congress details how older adults experience scams 61 and a series of FTC Data Spotlights gives further details on scams that affect older adults 62 and helps educate consumers 63 The Commission also works to provide companies with resources on a variety of issues that affect businesses For example our “Cybersecurity for Small Business” campaign a joint effort with the National Institute of Standards and Technology the Small Business Administration and the Department of Homeland Security includes a dozen need-to-know topics as well as fact sheets videos and other materials 64 IV COMPETITION MISSION In addition to the consumer protection work described above the FTC enforces U S antitrust law in many sectors that directly affect consumers and their wallets such as health care consumer products and services technology manufacturing and energy The Commission shares federal antitrust enforcement responsibilities with the Antitrust Division of the U S Department of Justice “DOJ” One of the agencies’ principal responsibilities is to prevent mergers that may substantially lessen competition Under U S law parties to certain mergers and acquisitions must file premerger notification with the FTC and DOJ and observe the statutorily prescribed waiting period before 60 See www ftc gov PassItOn and www ftc gov Pasalo The campaign has distributed more than 10 6 million print publications since its creation including 1 1 million so far in fiscal year 2019 61 FTC Report Protecting Older Consumers 2017-2018 Oct 2018 https www ftc gov reports protecting-olderconsumers-2017-2018-report-congress-federal-trade-commission 62 See e g FTC Consumer Protection Data Spotlight Older Adults Hardest Hit by Tech Support Scams Mar 7 2019 https www ftc gov news-events blogs data-spotlight 2019 03 older-adults-hardest-hit-tech-support-scams 63 See e g FTC Consumer Blog How to Spot Avoid and Report Tech Support Scams Feb 2019 https www consumer ftc gov articles how-spot-avoid-and-report-tech-support-scams and https www consumidor ftc gov articulos como-detectar-evitar-y-reportar-las-estafas-de-soporte-tecnico 64 See Cybersecurity Resources for Your Small Business Oct 18 2018 https www ftc gov newsevents blogs business-blog 2018 10 cybersecurity-resources-your-small-business These materials will soon be available in Spanish 19 consummating their transactions Premerger filings under the Hart-Scott-Rodino “HSR” Act have generally increased steadily since FY 2013 Last year for the second year in a row we received just over 2 000 HSR filings 65 Most reported transactions do not raise significant competitive concerns and the agencies clear those non-problematic transactions expeditiously But when the evidence suggests that a proposed merger likely would be anticompetitive the Commission does not hesitate to intervene In FY 2018 the Commission took enforcement actions against 22 different mergers most of which were resolved through a consent decree We also challenged five mergers in court federal courts granted preliminary injunctions in two cases 66 the parties abandoned their plans in the face of our court challenge in two cases 67 and a ruling is currently pending in the fifth matter 68 One increasing challenge for the Commission in litigating competition cases is the continuing need to hire testifying economic experts Qualified experts are critically important in competition cases heading to litigation Although the agency thus far has managed to find sufficient resources to fund the experts needed to support its cases the FTC appreciates Congress’s attention to its resource needs including the need to hire outside experts Over the past year the Commission has continued its decades-long efforts to fight anticompetitive conduct in the pharmaceuticals and health care industries where rising costs continue 65 The agencies received 2 111 HSR filings in FY 2018 a slight increase from FY 2017 where we received 2 052 Apart from the last two years the last time annual HSR notification filings exceeded 2 000 was back in FY 2007 For historical information about HSR filings and U S merger enforcement see the joint FTC DOJ Hart-Scott-Rodino annual reports https www ftc gov policy reports policy-reports annual-competition-reports 66 See FTC v Tronox Ltd 332 F Supp 3d 187 D D C 2018 granting preliminary injunction FTC v Wilh Wilhelmsen Holding ASA 341 F Supp 3d 27 D D C 2018 granting preliminary injunction The agency also won a full administrative trial on the merits in the Tronox matter before an administrative law judge before the parties ultimately settled with the agency FTC Press Release FTC Requires Divestitures by Tronox and Cristal Suppliers of Widely Used White Pigment Settling Litigation over Proposed Merger Apr 10 2019 https www ftc gov newsevents press-releases 2019 04 ftc-requires-divestitures-tronox-cristal-suppliers-widely-used 67 J M Smuckers and Conagra abandoned their planned combination after the FTC filed suit in March 2018 CDK abandoned its plan to purchase Auto-Mate after the Commission initiated litigation in March 2018 68 The agency formally challenged the consummated merger of Otto Bock and Freedom Innovations in FY 2018 Litigation before an administrative law judge concluded last fall and the agency is currently awaiting a ruling 20 to burden American consumers For over twenty years the Commission has prioritized ending anticompetitive reverse payment agreements in which a brand-name drug firm pays its potential generic rival to delay entering the market with a lower cost generic product Following the U S Supreme Court’s 2013 decision in FTC v Actavis Inc 69 the Commission is in a much stronger position to protect consumers Since that ruling the FTC obtained a landmark $1 2 billion settlement in its litigation involving the sleep disorder drug Provigil 70 and other manufacturers including the remaining Actavis defendants 71 have agreed to abandon the practice 72 In administrative litigation the Commission ruled in March of this year that Impax had engaged in an illegal reverse payment agreement designed to block consumers’ access to a lower-cost generic version of the branded drug Opana ER 73 In addition the Commission has challenged other anticompetitive conduct by drug manufacturers Last month the Commission filed a complaint against the health information company Surescripts alleging that it employed illegal vertical and horizontal restraints to maintain its monopolies over two electronic prescribing or “e-prescribing ” markets routing and eligibility 74 Additionally a federal court recently ruled that AbbVie Inc used sham litigation illegally to maintain its monopoly over the testosterone replacement drug 69 570 U S 756 2013 On February 28 2019 after over ten years of litigation the Commission reached a settlement with the final remaining defendant in the Actavis case 70 FTC Press Release FTC Settlement of Cephalon Pay for Delay Case Ensures $1 2 Billion in Ill-Gotten Gains Relinquished Refunds Will Go To Purchasers Affected by Anticompetitive Tactics May 28 2015 https www ftc gov news-events press-releases 2015 05 ftc-settlement-cephalon-pay-delay-case-ensures-12-billion-ill 71 FTC Press Release Last Remaining Defendant Settles FTC Suit that Led to Landmark Supreme Court Ruling on Drug Company “Reverse Payments” Feb 28 2019 https www ftc gov news-events press-releases 2019 02 lastremaining-defendant-settles-ftc-suit-led-landmark-supreme 72 FTC Press Release FTC Enters Global Settlement to Resolve Reverse-Payment Charges against Teva Feb 9 2019 https www ftc gov news-events press-releases 2019 02 ftc-enters-global-settlement-resolve-reverse-payment-charges Joint Motion for Entry of Stipulated Order for Permanent Injunction FTC v Allergan plc No 17-cv-00312 N D Cal Jan 23 2017 https www ftc gov enforcement cases-proceedings 141-0004 allergan-plc-watson-laboratoriesinc-et-al Stipulated Order for Permanent Injunction FTC v Teikoku Pharma USA Inc No 16-cv-01440 E D Pa Mar 30 2016 https www ftc gov enforcement cases-proceedings 141-0004 endo-pharmaceuticals-impax-labs 73 FTC Press Release FTC Concludes that Impax Entered into Illegal Pay-for-Delay Agreement Mar 29 2019 https www ftc gov news-events press-releases 2019 03 ftc-concludes-impax-entered-illegal-pay-delay-agreement 74 FTC Press Release FTC Charges Surescripts with Illegal Monopolization of E-Prescription Markets Apr 24 2019 https www ftc gov news-events press-releases 2019 04 ftc-charges-surescripts-illegal-monopolization-eprescription 21 Androgel and ordered $493 7 million in monetary relief to consumers who were overcharged for Androgel as a result of AbbVie’s conduct 75 The Commission also maintains a robust program to identify and stop anticompetitive conduct This year in administrative litigation of the 1-800 Contacts matter the Commission ruled that agreements among competitors to limit the scope of their internet advertising were unlawful 76 The agency also successfully argued and won an important procedural victory in the U S Court of Appeals for the Fifth Circuit defeating an effort by the Louisiana Real Estate Appraisers Board to obtain interlocutory review of the agency’s determination that the state-action doctrine did not apply to its conduct 77 The agency also has several other conduct matters in active litigation 78 The Commission also continues to focus its attention on high technology markets In an effort to more closely monitor developments in the technology sector the FTC’s Bureau of Competition recently announced the creation of a Technology Task Force dedicated to monitoring competition in U S technology markets 79 The Task Force will include attorneys from the Bureau of Competition with expertise in complex product and service markets and ecosystems including markets for online advertising social networking mobile operating systems and apps and platforms and will be supported by a Technology Fellow who will provide important technical assistance for investigations The Task Force will examine industry practices conduct law 75 FTC v AbbVie Inc 329 F Supp 3d 98 E D Pa 2018 Statement of FTC Chairman Joe Simons Regarding Federal Court Ruling in FTC v AbbVie June 29 2018 https www ftc gov news-events press-releases 2018 06 statement-ftcchairman-joe-simons-regarding-federal-court-ruling 76 In re 1-800 Contacts Inc Dkt No 9372 Nov 14 2018 https www ftc gov system files documents cases docket_no_9372_opinion_of_the_commission_redacted_public_vers ion pdf This matter is currently on appeal to the U S Court of Appeals for the Second Circuit 77 La Real Estate Appraisers Bd v FTC 917 F 3d 389 5th Cir 2019 78 In addition to the cases involving pharmaceutical firms discussed infra pending litigation alleging anticompetitive conduct includes FTC v Qualcomm Inc No 17-cv-00220 N D Cal Jan 17 2017 https www ftc gov enforcement cases-proceedings 141-0199 qualcomm-inc In re Benco Dental Supply et al Dkt No 9379 Feb 12 2018 https www ftc gov enforcement cases-proceedings 151-0190 bencoscheinpatterson-matter 79 FTC Press Release FTC’s Bureau of Competition Launches Task Force to Monitor Technology Markets Feb 26 2019 https www ftc gov news-events press-releases 2019 02 ftcs-bureau-competition-launches-task-force-monitortechnology 22 enforcement investigations and coordinate and consult with staff throughout the FTC on technology-related matters including prospective merger reviews and reviews of consummated technology mergers In addition to competition enforcement the FTC promotes competition principles in advocacy comments to state lawmakers and regulators as well as to its sister federal agencies 80 and in amicus briefs filed in federal courts considering important areas of antitrust law 81 The Commission benefits from critical self-examination examining prior merger enforcement decisions to assess their impact on competition and consumers and we intend to expand this effort going forward Similarly through the series of hearings described above the Commission is devoting significant resources to refresh and if warranted renew its thinking on a wide range of cutting-edge competition issues 82 V INTERNATIONAL COOPERATION The FTC also engages in significant international work to support its domestic enforcement programs During the last fiscal year the FTC cooperated in 43 investigations cases and enforcement projects with foreign consumer privacy and criminal enforcement agencies To sustain this level of cooperation the agency often works through global enforcement networks such as the International Consumer Protection and Enforcement Network the Global Privacy Enforcement Network the Unsolicited Communications Enforcement Network and the International Mass Marketing Fraud Working Group The FTC also works directly with foreign counterparts on enforcement issues 83 80 See generally https www ftc gov policy advocacy Amicus briefs are posted at https www ftc gov policy advocacy amicus-briefs 82 See Prepared Remarks of Chairman Simons Announcing the Competition and Consumer Protection Hearings June 20 2018 https www ftc gov system files documents public_statements 1385308 prepared_remarks_of_joe_simons_announcing _the_hearings_6-20-18_0 pdf 83 For example the FTC has conducted several trainings and roundtables in the United States and India to help develop 81 23 International enforcement cooperation also is critical for the FTC’s competition program With the expansion of global trade and the operation of many companies across national borders the FTC and DOJ increasingly engage with foreign antitrust agencies to ensure close collaboration on cross-border cases and convergence toward sound competition policies and procedures 84 The FTC effectively coordinates reviews of multijurisdictional mergers and continues to work with its international counterparts to achieve consistent outcomes in cases of possible anticompetitive conduct The U S antitrust agencies facilitate dialogue and promote convergence through multiple channels including through strong bilateral relations with foreign competition agencies and multilateral competition organization projects and initiatives The FTC also works with other agencies within the U S government to advance consistent competition enforcement policies practices and procedures in other parts of the world 85 The U S SAFE WEB Act is key to much of the agency’s international work especially on consumer protection and privacy matters 86 Passed in 2006 and renewed in 2012 the Act strengthens the FTC’s ability to work on cases with an international dimension It allows the FTC to share evidence and provide investigative assistance to foreign authorities in cases involving spam spyware misleading health and safety claims privacy violations and data security breaches and telemarketing fraud In many cases the foreign agencies investigated conduct that directly the capacity of Indian law enforcement to address tech support and other impostor scams such as the impersonation of IRS and Social Security officials To address these continued threats the FTC will convene a fourth annual roundtable in June in partnership with the U S -India Business Council on combatting Indian call center fraud U S -India Business Council 4th Annual Round Table on Stepping Up to Stop Indian Call Center Fraud https www usibc com event 4th-annual-round-table-on-stepping-up-to-stop-indian-call-center-fraud 84 In competition matters the FTC also seeks to collaborate with the state Attorneys General to maximize results and use of limited resources in the enforcement of the U S antitrust laws 85 For example the Commission works through the U S government’s interagency processes to ensure that competition-related issues that also implicate broader U S policy interests such as the protection of intellectual property and non-discrimination are addressed in a coordinated and effective manner 86 Undertaking Spam Spyware and Fraud Enforcement With Enforcers Beyond Borders Act U S SAFE WEB Act Pub L No 109-455 120 Stat 3372 extended by Pub L No 112-203 126 Stat 1484 amending 15 U S C §§ 41 et seq Certain provisions such as the secondment program for foreign officials described below also apply to the FTC’s competition work 24 harmed U S consumers in others the FTC’s action led to reciprocal assistance The Act also has bolstered the agency’s authority to engage in enhanced enforcement cooperation with foreign counterparts including through memoranda of understanding international agreements staff exchanges and other mechanisms The U S SAFE WEB Act has been a remarkable success The Act enabled the FTC to respond to more than 130 SAFE WEB information sharing requests from more than 30 foreign enforcement agencies It allowed the FTC to issue more than 115 civil investigative demands in more than 50 investigations on behalf of foreign agencies both civil and criminal The Commission has also used this authority to file suit in federal court to obtain judicial assistance for one of its closest law enforcement partners the Canadian Competition Bureau 87 The FTC’s foreign law enforcement partners similarly have assisted FTC enforcement actions For example the FTC worked directly with U K and Canadian authorities to halt NextGen Inc a sweepstakes scam 88 The FTC relied on key information sharing provisions of the U S SAFE WEB Act to facilitate cooperation with its U K partner and last month the defendants forfeited $30 million in cash and assets to settle the FTC’s charges In the privacy arena the FTC used key provisions of the U S SAFE WEB Act to collaborate successfully with the Office of the Privacy Commissioner of Canada in its COPPA case against V-Tech the FTC’s first case involving Internet-connected toys 89 The FTC also brought several significant enforcement actions in the past year relying on the SAFE WEB Act’s provisions that allow the FTC to reach foreign conduct that has a “reasonably foreseeable” effect on U S consumers or that involves “material conduct” in the 87 See Remarks by John Pecman Commissioner of Competition Canada at International Privacy Enforcement Meeting June 4 2015 https www competitionbureau gc ca eic site cb-bc nsf eng 03957 html 88 FTC Press Release Operators of Sweepstakes Scam Will Forfeit $30 Million to Settle FTC Charges Mar 7 2019 https www ftc gov news-events press-releases 2019 03 operators-sweepstakes-scam-will-forfeit-30-million-settle-ftc 89 U S v VTech Electronics Ltd et al No 1 18-cv-00114 N D Ill Jan 8 2018 https www ftc gov enforcement cases-proceedings 162-3032 vtech-electronics-limited 25 United States as the basis for challenging practices involving foreign defendants 90 The Act also underpins the FTC’s ability to participate in cross-border cooperation arrangements This includes data transfer mechanisms such as the EU-U S Privacy Shield framework and the Swiss-U S Privacy Shield framework as well as the APEC Cross-Border Privacy Rules System designed to protect privacy and data flows in the Asia-Pacific region Many U S companies use these mechanisms to carry out cross-border data flows consistent with strong privacy protections The SAFE WEB Act also provides the FTC with key powers helping to carry out enhanced cooperation with important partners 91 The SAFE WEB Act’s provision authorizing staff exchanges also yields tremendous benefits Using the Act the FTC established an International Fellows program that has enabled the agency to host over 120 officials of foreign competition consumer protection and data privacy agencies to work alongside FTC staff on enforcement matters subject to confidentiality protections over the past dozen years Foreign counterparts continue to seek exchanges with us as the Fellows incorporate their learning from the FTC into the work of their home agencies strengthening their capacity as well as our cooperative relationships with those counterparts The Act sunsets in 2020 The Commission strongly urges Congress to reauthorize this critical authority and eliminate the sunset provision Just as Congress permanently granted the 90 See e g FTC Press Release Court Temporarily Halts International Operation that Allegedly Deceived Consumers through False Claims of “Free Trial” Offers and Imposed Unauthorized Continuity Plans Nov 28 2018 https www ftc gov news-events press-releases 2018 11 court-temporarily-halts-international-operation-allegedly FTC Press Release At FTC’s Request Court Halts Massive “Sanctuary Belize” Real Estate Investment Scam Nov 8 2018 https www ftc gov news-events press-releases 2018 11 ftcs-request-court-halts-massive-sanctuary-belize-realestate FTC Press Release FTC Halts Online Marketers Responsible for Deceptive “Free Trial” Offers July 3 2018 https www ftc gov news-events press-releases 2018 07 ftc-halts-online-marketers-responsible-deceptive-free-trial FTC Press Release FTC Action Halts MOBE a Massive Internet Business Coaching Scheme June 11 2018 https www ftc gov news-events press-releases 2018 06 ftc-action-halts-mobe-massive-internet-business-coachingscheme 91 FTC Press Release FTC Signs Memorandum of Understanding with United Kingdom’s Competition and Markets Authority to Strengthen Consumer Protection Enforcement Cooperation Mar 25 2019 https www ftc gov newsevents press-releases 2019 03 ftc-signs-memorandum-understanding-united-kingdoms-competition The MOU streamlines sharing investigative information and complaint data simplifies requests for investigative assistance aids joint law enforcement investigations and provides strong confidentiality and data safeguards 26 Securities and Exchange Commission and the U S Commodity Futures Trading Commission similar enforcement powers decades ago and provided the Consumer Product Safety Commission with permanent authority to share information with its foreign counterparts we ask Congress to repeal the Act’s sunset provision and make the SAFE WEB Act’s cooperation tools a permanent part of the FTC Act VI CONCLUSION The FTC remains committed to marshalling its resources efficiently in order to effectively protect consumers and promote competition to anticipate and respond to changes in the marketplace and to meet current and future challenges We look forward to continuing to work with the Subcommittee and Congress and we would be happy to answer your questions 27