201-896-4100

Businesses Can Learn from the FTC’s 2015 Annual Highlights Report


May 23, 2016
« Next Previous »

Businesses Can Learn from the FTC’s 2015 Annual Highlights Report 

The Federal Trade Commission (FTC) recently released its 2015 Annual Highlights. As the title suggests, the report summarizes the agency’s achievements and initiatives last year in the areas of enforcement, policy, and education.

 

Annual Highlights Report

For businesses, the report is useful because it highlights where the FTC is focusing its oversight and, consequently, where companies should be directing their compliance resources. Most notably, the report confirms that the FTC is increasingly concerned about how emerging technologies are impacting consumers, as well as how business mergers are impacting competition.

“2015 was another busy year for the FTC fighting fraud and deception, as well as promoting competition and consumer choice,” Chairwoman Edith Ramirez said in a press statement. “In our law enforcement and policy work, we placed special emphasis on sectors of the economy that have the biggest impact on consumers, such as health care and the digital economy.”

FTC Enforcement Highlights

In total, the FTC imposed $21.8 million in civil penalties in 2015. While the agency was active in a variety of industries, the healthcare and pharmaceutical industries saw the most enforcement actions. As evidence of its efforts to prevent anticompetitive healthcare provider consolidation, the FTC filed suit to block three proposed hospital mergers in 2015.

Overall, the FTC filed 27 merger challenges in 2015, along with a number of anticompetitive conduct cases. The agency specifically noted that it successfully prevented Sysco from buying its rival, US Foods, thereby preserving competition in the $231 billion foodservice industry.

annual highlights reportIn the area of consumer protection, the Annual Highlights report also emphasized that the FTC had many victories in 2015 at both the district court and appellate levels on key issues of concern, including the common carrier exemption (AT&T Mobility), data security (Wyndham), and deceptive advertising (POM Wonderful). As we discussed on this blog, in FTC v. Wyndham Worldwide Corporation, the Third Circuit Court of Appeals affirmed the FTC’s cybersecurity authority to hold businesses liable for data breaches under Section 5 of the Federal Trade Commission Act.

Finally, the FTC also had a record year of debt collection enforcement. It brought twelve new cases against 52 new defendants and resolved nine cases to obtain nearly $94 million in judgments.

 

FTC Policy Highlights

As noted in the report’s Policy Highlights, the FTC filed amicus briefs in a number of cases, including lawsuits involving prescription drug competition and debt collection. Most notably, in American Sales v. Warner-Chilcott, the FTC argued that reverse-payment patent litigation settlements, also referred to as “pay-for-delay” settlements, can still violate antitrust laws even when non-cash payments are made.

The majority of the FTC staff’s advocacy comments also focused on the healthcare industry. The agency issued comments to legislators in four states, including New York, that raised concerns over efforts to provide antitrust immunity for mergers and other collaborations among health care providers. The FTC also noted that its staff conducted several workshops focused on new and rapidly changing markets or technologies, such as the sharing economy, cross-device tracking, and new developments in healthcare provider organization and payment models.

FTC Outreach Highlights

Whenever the FTC issues new guidance, enforcement actions are likely to follow.

With regard to education, the FTC report highlights its work to alert businesses to the agency’s compliance standards. For those who don’t already follow the agency’s business blog, it is a great way to keep up with data regarding FTC guidance and enforcement initiatives.

In 2015, the FTC launched its multimedia Start with Security initiative, revised its FAQs about the endorsement guides, and issued a new brochure for companies entering the Internet of Things marketplace. In December of 2015, the agency issued guidance on “native advertising,” reminding businesses that an advertisement or promotional message shouldn’t suggest or imply to consumers that it’s anything other than an advertisement, particularly on social media.

annual highlights report 3Whenever the FTC issues new guidance, enforcement actions are likely to follow. Just a few months later, it announced that retailer Lord & Taylor had reached a settlement over allegations that it misrepresented that Instagram images and captions reflected the independent statements of impartial fashion influencers, when they really were part of a Lord & Taylor ad campaign.

In the area of consumer outreach, the report notes the FTC’s efforts to educate consumers about the “telltale signs of fraud and deceptive business practices.” In keeping with the agency’s growing focus on data security, the report also highlights IdentityTheft.gov, which was created as a centralized government website for the public to report and recover from identity theft.