FTC Offers Red Flags Web Site To Help Creditors and Financial Institutions Design Identity Theft Prevention Programs

The Federal Trade Commission has launched a Web site to help entities covered by the Red Flags Rule design and implement identity theft prevention programs. The Rule requires “creditors” and “financial institutions” to develop written programs to identify the warning signs of ID theft, spot them when they occur, and take appropriate steps to respond to those warning “red flags.”

The FTC and the federal financial regulatory agencies developed the Red Flags Rule under the Fair and Accurate Credit Transactions Act of 2003. The Rule is designed to reduce the overall incidence and impact of identity theft. “Fighting Fraud with the Red Flags Rule: A How-To Guide for Business,” available at www.ftc.gov/redflagsrule, describes the entities that are covered by the Rule and provides information to help them develop identity theft prevention programs. The Web site also offers articles and guidance on specific elements of the Rule.

The Rule became effective on November 1, 2008. For entities under the FTC’s jurisdiction, however, the Commission has delayed enforcement of the Rule until May 1, 2009, to provide more time for them to develop their Red Flags Programs. (See FTC Enforcement Policy, Oct. 22, 2008 – http://www.ftc.gov/opa/2008/10/redflags.shtm).

(FYIRedFlagsRuleWebSite)

Related posts:

  1. FTC Staff Submits Comment to CFPB on Mortgage Disclosure Forms
  2. FTC Returns More than $2 Million to Buyers of the “Google Money Tree” Work-at-Home Scam
  3. FTC Publishes Guide to Help Mobile App Developers Observe Truth-in-Advertising, Privacy Principles
  4. California Man Previously Sued by FTC Is Indicted on Criminal Charges for Phony Debt Collection Scam

FTC Intervenes in BASFs Proposed $5.1 Billion Acquisition of Ciba Holding Inc.

BASF has settled Federal Trade Commission charges that its proposed $5.1 billion acquisition of rival chemical manufacturer Ciba Holding Inc. would be anticompetitive and violate federal law by reducing competition in the worldwide markets for two high performance pigments. Under the terms of a consent order allowing the transaction to proceed, the FTC requires BASF to sell all assets, including the intellectual property related to the two pigments, bismuth vanadate and indanthrone blue, to a Commission-approved buyer within six months.

“High performance pigments are used to provide color to a large number of products across the U.S. economy, including cars, building materials, construction equipment, inks, and plastics,” said Acting FTC Bureau of Competition Director David P. Wales. “The Commission’s action today preserves the competition that would have been lost with this transaction and ensures that consumers do not pay higher prices.”

BASF, headquartered in Ludwigshafen, Germany, is the world’s leading chemical company, manufacturing plastics, agricultural products, fine chemicals, and high performance pigments. Ciba, based in Basel, Switzerland, is a leading supplier of chemicals used to provide color performance and care for plastics, coatings, textiles, paper, and home and personal care products. On September 15, 2008, the companies announced an agreement and plan of merger under which BASF would acquire all of Ciba’s outstanding stock for approximately $5.1 billion.

Pigments are small particles used to impart color to a range of products, including inks, coatings, plastics, and fibers. Bismuth vanadate, which imparts a brilliant yellow coloration with a green tint, and indanthrone blue, which imparts a blue coloration with a red tint, are both high performance pigments. High performance pigments offer superior durability and light-fastness compared to other types of chemical pigments. This makes them particularly suited for products exposed to sunlight and weather, such as automotive coatings. There are no viable substitutes for these two pigments in the applications for which they are used.

The Commission’s complaint alleges that the worldwide markets for both pigments are highly concentrated. A combined BASF/Ciba would control 60 percent of bismuth vanadate sales, and the proposed transaction would reduce the number of significant manufacturers from four to three in that market. In the indanthrone blue market, BASF and Ciba are two of only three significant suppliers, with a combined market share of more than 50 percent. By eliminating competition between BASF and Ciba, the proposed transaction would allow the combined firm to exercise unilateral market power, the FTC contends, and also would increase the likelihood of coordinated interaction with the remaining firms in each market.

Entry into either relevant market is not likely to be timely or sufficient to counteract the anticompetitive effects of BASF’s acquisition of Ciba. The Commission estimates that it would take well over two years for a new entrant to become competitive in either relevant market.

The proposed consent order is designed to remedy the anticompetitive impact of the proposed transaction in the two markets. Under the terms of the order, BASF is required to divest the assets used to research, develop, manufacture, and sell the products to a Commission-approved buyer or buyers that will enable the acquirer to replace the competition lost as a result of the transaction.

Specifically, the consent order requires BASF to divest Ciba’s bismuth vanadate production assets in Europe, or provides a means by which – at the acquirer’s option – production can be relocated to the acquirer’s production facilities. Similarly, the order requires BASF to use Ciba’s indanthrone blue production assets to produce pigments for the acquirer at Ciba facilities until the acquirer is prepared to shift Ciba’s indanthrone blue production to its own facilities. The order also requires BASF to divest tangible assets and intellectual property used to make both products.

In addition, the consent order requires BASF to provide other relief to the acquirer, such as supply agreements and protections for confidential information, and to facilitate the hiring of key employees. The order also allows the FTC to appoint an interim monitor to ensure that BASF complies with all of its obligations. Finally, the FTC may appoint a divestiture trustee to sell the relevant assets if BASF fails to sell them within six months after the consent agreement is accepted by the Commission for public comment.

The Commission vote to accept the complaint and proposed consent order and place copies on the public record was 4-0. The FTC will publish an announcement regarding the agreement in the Federal Register shortly. The complaint, consent order, and an analysis to aid public comment can be found now on the Commission’s Web site at http://www.ftc.gov/os/caselist/0810265/index.shtm.

The proposed consent order will be subject to public comment for 30 days, beginning today and continuing through May 1, 2009, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. To file a public comment electronically, please click on the following hyperlink:
http://www.ftc.gov/os/2009/04/090402basfcomment.pdf and follow the instructions at that site.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $16,000.

Copies of the documents related to this matter are available from the FTC’s web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Room 383, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.

(FTC File No. 081-0265)
(BASF.final.wpd)

Related posts:

  1. FTC Seeks Comment on ConocoPhillips’s Petition to Amend Its Propane Supply Agreement with NGL
  2. FTC Approves Appointment of Interim Monitor and Interim Monitor Agreement in Matter of Getinge AB/Datascope Corporation
  3. FTC Sues to Block Oldcastle Architecturals Proposed Acquisition of the Pavestone Companies
  4. Inverness Medical Innovations Settles FTC Charges That it Stifled Future Competition in U.S. Market for Consumer Pregnancy Tests

FTC Intervenes in BASFs Proposed $5.1 Billion Acquisition of Ciba Holding Inc.

BASF has settled Federal Trade Commission charges that its proposed $5.1 billion acquisition of rival chemical manufacturer Ciba Holding Inc. would be anticompetitive and violate federal law by reducing competition in the worldwide markets for two high performance pigments. Under the terms of a consent order allowing the transaction to proceed, the FTC requires BASF to sell all assets, including the intellectual property related to the two pigments, bismuth vanadate and indanthrone blue, to a Commission-approved buyer within six months.

“High performance pigments are used to provide color to a large number of products across the U.S. economy, including cars, building materials, construction equipment, inks, and plastics,” said Acting FTC Bureau of Competition Director David P. Wales. “The Commission’s action today preserves the competition that would have been lost with this transaction and ensures that consumers do not pay higher prices.”

BASF, headquartered in Ludwigshafen, Germany, is the world’s leading chemical company, manufacturing plastics, agricultural products, fine chemicals, and high performance pigments. Ciba, based in Basel, Switzerland, is a leading supplier of chemicals used to provide color performance and care for plastics, coatings, textiles, paper, and home and personal care products. On September 15, 2008, the companies announced an agreement and plan of merger under which BASF would acquire all of Ciba’s outstanding stock for approximately $5.1 billion.

Pigments are small particles used to impart color to a range of products, including inks, coatings, plastics, and fibers. Bismuth vanadate, which imparts a brilliant yellow coloration with a green tint, and indanthrone blue, which imparts a blue coloration with a red tint, are both high performance pigments. High performance pigments offer superior durability and light-fastness compared to other types of chemical pigments. This makes them particularly suited for products exposed to sunlight and weather, such as automotive coatings. There are no viable substitutes for these two pigments in the applications for which they are used.

The Commission’s complaint alleges that the worldwide markets for both pigments are highly concentrated. A combined BASF/Ciba would control 60 percent of bismuth vanadate sales, and the proposed transaction would reduce the number of significant manufacturers from four to three in that market. In the indanthrone blue market, BASF and Ciba are two of only three significant suppliers, with a combined market share of more than 50 percent. By eliminating competition between BASF and Ciba, the proposed transaction would allow the combined firm to exercise unilateral market power, the FTC contends, and also would increase the likelihood of coordinated interaction with the remaining firms in each market.

Entry into either relevant market is not likely to be timely or sufficient to counteract the anticompetitive effects of BASF’s acquisition of Ciba. The Commission estimates that it would take well over two years for a new entrant to become competitive in either relevant market.

The proposed consent order is designed to remedy the anticompetitive impact of the proposed transaction in the two markets. Under the terms of the order, BASF is required to divest the assets used to research, develop, manufacture, and sell the products to a Commission-approved buyer or buyers that will enable the acquirer to replace the competition lost as a result of the transaction.

Specifically, the consent order requires BASF to divest Ciba’s bismuth vanadate production assets in Europe, or provides a means by which – at the acquirer’s option – production can be relocated to the acquirer’s production facilities. Similarly, the order requires BASF to use Ciba’s indanthrone blue production assets to produce pigments for the acquirer at Ciba facilities until the acquirer is prepared to shift Ciba’s indanthrone blue production to its own facilities. The order also requires BASF to divest tangible assets and intellectual property used to make both products.

In addition, the consent order requires BASF to provide other relief to the acquirer, such as supply agreements and protections for confidential information, and to facilitate the hiring of key employees. The order also allows the FTC to appoint an interim monitor to ensure that BASF complies with all of its obligations. Finally, the FTC may appoint a divestiture trustee to sell the relevant assets if BASF fails to sell them within six months after the consent agreement is accepted by the Commission for public comment.

The Commission vote to accept the complaint and proposed consent order and place copies on the public record was 4-0. The FTC will publish an announcement regarding the agreement in the Federal Register shortly. The complaint, consent order, and an analysis to aid public comment can be found now on the Commission’s Web site at http://www.ftc.gov/os/caselist/0810265/index.shtm.

The proposed consent order will be subject to public comment for 30 days, beginning today and continuing through May 1, 2009, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. To file a public comment electronically, please click on the following hyperlink:
http://www.ftc.gov/os/2009/04/090402basfcomment.pdf and follow the instructions at that site.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $16,000.

Copies of the documents related to this matter are available from the FTC’s web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Room 383, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.

(FTC File No. 081-0265)
(BASF.final.wpd)

Related posts:

  1. Competition Acting Director David Wales to Leave FTC
  2. April 17 Public Hearing in Washington, DC to Focus on Intellectual Property
  3. Consumer Advice to Ring in the New Year
  4. Commission Approves Petition for Proposed Divestiture from Agrium Inc.

Telemarketers Settle Charges of Misleading Consumers with Free Product Pitches

A group of sellers and telemarketers charged in 2008’s “Operation Tele-PHONEY” interagency law enforcement sweep have agreed to post a $5 million performance bond before calling consumers and have been barred from violating federal law, including the Federal Trade Commission’s Telemarketing Sales Rule (TSR).

The complaint, brought jointly by the Federal Trade Commission and the Commonwealth of Kentucky by Jack Conway, Attorney General of Kentucky, charged that the defendants’ bogus pitches for “free” products and services misled consumers. All but one of the defendants named in the complaint have now settled the charges.

According to the joint complaint, the defendants misled consumers into thinking they were calling from a major retailer or from the consumers’ credit card company, confused consumers with fast-talking sales pitches, and didn’t deliver the free goods and services they promised – instead, they charged consumers’ credit cards or debited their bank accounts, even when the consumers said they did not want the products being sold. The case was brought as part of “Operation Tele-PHONEY,” the largest telemarketing fraud law enforcement sweep ever conducted by the FTC.

The complaint alleged that the defendants called consumers with promises of free gift cards, gas cards, or resort vacations. The defendants then used a variety of means to trick consumers into saying the word “yes,” which the defendants then used as their purported authorization to bill the consumers. For example, in some cases, the defendants told consumers they had to confirm their acceptance of the free goods or services being offered.

In other instances, the defendants asked consumers to help them by listening to a “pretend” telemarketing pitch, answering “yes” when prompted, and then rating the defendants’ sales skills: these consumers were told that they could cancel later in the call, after the recording was completed. The complaint charged that the defendants’ telemarketers often read their pitch so rapidly that many consumers did not understand or realize they were agreeing to pay for products or services.

Consumers who did understand the telemarketers’ pitch allegedly were told that they would not be charged for any products, as they had not provided their billing information. However, the defendants often charged consumers’ credit cards or debited their bank accounts anyway. In addition, consumers who were charged for products did not receive the “free” goods or the services promised. The defendants’ telemarketers also allegedly often harassed consumers who refused to participate in the call.

The agreed-upon order announced today, which has been entered by the court, permanently bars the settling defendants from telemarketing or assisting others in telemarketing, unless they first obtain a $5 million performance bond. The bond will remain in effect as long as they are involved in telemarketing and for three years after they stop. The bond will act as an insurance agreement whose funds can be used to provide redress to any consumers harmed by the defendants’ telemarketing activities. The order also requires that the settling defendants comply with the FTC Act, federal telemarketing laws, and the Kentucky Consumer Protection Act.

The order also prohibits the settling defendants from misrepresenting: 1) that they are contacting consumers from, or on behalf of, or are affiliated with a major retailer or credit card company; 2) that they will provide consumers with free goods or services or help with unwanted credit card charges; and 3) that consumers’ credit card accounts will not be charged nor their bank accounts debited. In addition, the settling defendants are barred from misrepresenting any goods or services offered, charging any consumers’ credit card or debiting their bank account without their express agreement to be charged, and helping others to violate these provisions or any provision of the TSR.

Finally, the settling defendants are subject to a monetary judgment of $15,707,917.86, which has been suspended in part due to their inability to pay. The settling defendants have been ordered to turn over assets worth approximately $1.3 million, including proceeds that will be received from the sale of two aircraft. The remainder of the judgment will become due if the defendants are later found to have misrepresented their financial condition. The settling defendants also are prohibited from distributing their customer information.

The agreed-upon final judgment and order announced today settles the complaint against: 1) Direct Connection Consulting, Inc., doing business as (dba) Sure Touch Long Distance; 2) Digicom, LLC, dba DigiTouch Long Distance; and 3) Elliott Borenstein, individually and as an owner, officer, or manager of Direct Connection Consulting, Inc., and Digicom, LLC. Litigation continues against JoAnn R. (Jody) Winter, individually and as an owner, officer, or manager of Direct Connection Consulting, Inc., and Digicom, LLC.

The Commission vote approving the consent order settling the court action against all defendants except Winter was 4-0. The action was filed in the U.S. District Court for the Northern District of Georgia and the court entered the final order on March 23, 2009.

NOTE: Stipulated final judgments and orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated orders have the force of law when signed by the judge.

Copies of the documents related to this matter are available from the FTC’s web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File No. X080039; Civ. No. 1:08-cv-1739-TCB)
(Suretouch.final.wpd)

Related posts:

  1. FTC, California Office of Privacy Protection to Co-Host Workshop for Businesses on Best Practices for Protecting Personal Information and Securing Data
  2. FTC Issues Staff Report on Roundtable Discussion About Phishing Education
  3. FTC Testifies on Behavioral Advertising
  4. Payday Loan Lead Generators Settle FTC Charges

Telemarketers Settle Charges of Misleading Consumers with Free Product Pitches

A group of sellers and telemarketers charged in 2008’s “Operation Tele-PHONEY” interagency law enforcement sweep have agreed to post a $5 million performance bond before calling consumers and have been barred from violating federal law, including the Federal Trade Commission’s Telemarketing Sales Rule (TSR).

The complaint, brought jointly by the Federal Trade Commission and the Commonwealth of Kentucky by Jack Conway, Attorney General of Kentucky, charged that the defendants’ bogus pitches for “free” products and services misled consumers. All but one of the defendants named in the complaint have now settled the charges.

According to the joint complaint, the defendants misled consumers into thinking they were calling from a major retailer or from the consumers’ credit card company, confused consumers with fast-talking sales pitches, and didn’t deliver the free goods and services they promised – instead, they charged consumers’ credit cards or debited their bank accounts, even when the consumers said they did not want the products being sold. The case was brought as part of “Operation Tele-PHONEY,” the largest telemarketing fraud law enforcement sweep ever conducted by the FTC.

The complaint alleged that the defendants called consumers with promises of free gift cards, gas cards, or resort vacations. The defendants then used a variety of means to trick consumers into saying the word “yes,” which the defendants then used as their purported authorization to bill the consumers. For example, in some cases, the defendants told consumers they had to confirm their acceptance of the free goods or services being offered.

In other instances, the defendants asked consumers to help them by listening to a “pretend” telemarketing pitch, answering “yes” when prompted, and then rating the defendants’ sales skills: these consumers were told that they could cancel later in the call, after the recording was completed. The complaint charged that the defendants’ telemarketers often read their pitch so rapidly that many consumers did not understand or realize they were agreeing to pay for products or services.

Consumers who did understand the telemarketers’ pitch allegedly were told that they would not be charged for any products, as they had not provided their billing information. However, the defendants often charged consumers’ credit cards or debited their bank accounts anyway. In addition, consumers who were charged for products did not receive the “free” goods or the services promised. The defendants’ telemarketers also allegedly often harassed consumers who refused to participate in the call.

The agreed-upon order announced today, which has been entered by the court, permanently bars the settling defendants from telemarketing or assisting others in telemarketing, unless they first obtain a $5 million performance bond. The bond will remain in effect as long as they are involved in telemarketing and for three years after they stop. The bond will act as an insurance agreement whose funds can be used to provide redress to any consumers harmed by the defendants’ telemarketing activities. The order also requires that the settling defendants comply with the FTC Act, federal telemarketing laws, and the Kentucky Consumer Protection Act.

The order also prohibits the settling defendants from misrepresenting: 1) that they are contacting consumers from, or on behalf of, or are affiliated with a major retailer or credit card company; 2) that they will provide consumers with free goods or services or help with unwanted credit card charges; and 3) that consumers’ credit card accounts will not be charged nor their bank accounts debited. In addition, the settling defendants are barred from misrepresenting any goods or services offered, charging any consumers’ credit card or debiting their bank account without their express agreement to be charged, and helping others to violate these provisions or any provision of the TSR.

Finally, the settling defendants are subject to a monetary judgment of $15,707,917.86, which has been suspended in part due to their inability to pay. The settling defendants have been ordered to turn over assets worth approximately $1.3 million, including proceeds that will be received from the sale of two aircraft. The remainder of the judgment will become due if the defendants are later found to have misrepresented their financial condition. The settling defendants also are prohibited from distributing their customer information.

The agreed-upon final judgment and order announced today settles the complaint against: 1) Direct Connection Consulting, Inc., doing business as (dba) Sure Touch Long Distance; 2) Digicom, LLC, dba DigiTouch Long Distance; and 3) Elliott Borenstein, individually and as an owner, officer, or manager of Direct Connection Consulting, Inc., and Digicom, LLC. Litigation continues against JoAnn R. (Jody) Winter, individually and as an owner, officer, or manager of Direct Connection Consulting, Inc., and Digicom, LLC.

The Commission vote approving the consent order settling the court action against all defendants except Winter was 4-0. The action was filed in the U.S. District Court for the Northern District of Georgia and the court entered the final order on March 23, 2009.

NOTE: Stipulated final judgments and orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated orders have the force of law when signed by the judge.

Copies of the documents related to this matter are available from the FTC’s web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File No. X080039; Civ. No. 1:08-cv-1739-TCB)
(Suretouch.final.wpd)

Related posts:

  1. FTC, California Office of Privacy Protection to Co-Host Workshop for Businesses on Best Practices for Protecting Personal Information and Securing Data
  2. FTC Issues Staff Report on Roundtable Discussion About Phishing Education
  3. FTC Testifies on Behavioral Advertising
  4. Payday Loan Lead Generators Settle FTC Charges

Competition Acting Director David Wales to Leave FTC

Federal Trade Commission Chairman Jon Leibowitz announced today that David P. Wales, Acting Director of the Bureau of Competition for the past nine months, will leave the FTC in May.

“Dave has done a terrific job in leading the Bureau of Competition during an active period of antitrust enforcement and a successful time for the agency in court,” Chairman Leibowitz said. “American consumers owe him a debt of gratitude, and all of us at the Commission are grateful that Dave agreed to stay on to help ensure a smooth transition.”

Wales joined the Commission in April 2006 as Deputy Director of the Bureau of Competition. As Acting Director since August 2008, he has supervised nearly 300 lawyers and staff in the merger and non-merger enforcement divisions and led the Bureau in bringing more than 20 enforcement actions. Wales played a key role in developing sound antitrust policy, implemented improvements to the Bureau’s infrastructure and processes, helped develop amendments to streamline Part 3 of the FTC’s Rules of Practice for administrative adjudication, and managed Bureau resources during one of its most active litigation dockets.

Wales directed several litigated enforcement efforts that blocked proposed mergers in CCS/Newpark Environmental Services, Oldcastle/Pavestone, and CCC/Mitchell. In CCC/Mitchell, the Bureau obtained the first preliminary injunction order from a district court in nearly seven years. Wales also led the Bureau in challenging several consummated mergers in court, including Polypore/Microporous and Ovation Pharmaceuticals, both of which are still pending, and he oversaw the continuing litigation and subsequent settlement involving Whole Foods/Wild Oats. He also helped lead the FTC in obtaining important relief for consumers in other merger matters, including Reed Elsevier/ChoicePoint, Fresenius/Daiichi Sanyo, Dow/Rohm & Haas, King Pharmaceuticals/Alpharma, Hexion/Huntsman, Teva/Barr Pharmaceuticals, Herff Jones/American Achievement, Getinge/Datascope, and Lubrizol/Lockhart.

In the anticompetitive conduct area, Wales oversaw the Bureau’s two lawsuits against pharmaceutical firms that entered into exclusion payment agreements – Cephalon and Solvay Pharmaceuticals. He also helped lead the FTC in obtaining critical relief for consumers in other conduct matters in the health care, retail, consumer product, and real estate industries, including Dick’s Sporting Goods, Boulder Valley Independent Practice Association, AllCare IPA, Inverness, ESL Partners/ZAM Holdings, West Penn MLS, National Association of Music Merchants, and Bristol-Myers Squibb. In the energy sector, Wales oversaw several regional gas price investigations, as well as the Commission’s rulemaking to prohibit market manipulation in the petroleum industry.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(WalesDeparture)

Related posts:

  1. FTC Staff Opinion: The Methodist Hospital System May Sell Discounted Shortage Drugs to Baytown EMS as an Emergency Humanitarian Gesture; FTC Approves Final Order Settling Charges that Universal Health Services, Inc.s Acquisition of Ascend Health
  2. FTC Order Restores Competition in U.S. Market for Equipment Used to Recharge Vehicle Air Conditioning Systems
  3. Competition Director Jeffrey Schmidt to Leave FTC
  4. FTC Challenges Pernod Ricard’s Proposed Acquisition of V&S Vin & Sprit

Competition Acting Director David Wales to Leave FTC

Federal Trade Commission Chairman Jon Leibowitz announced today that David P. Wales, Acting Director of the Bureau of Competition for the past nine months, will leave the FTC in May.

“Dave has done a terrific job in leading the Bureau of Competition during an active period of antitrust enforcement and a successful time for the agency in court,” Chairman Leibowitz said. “American consumers owe him a debt of gratitude, and all of us at the Commission are grateful that Dave agreed to stay on to help ensure a smooth transition.”

Wales joined the Commission in April 2006 as Deputy Director of the Bureau of Competition. As Acting Director since August 2008, he has supervised nearly 300 lawyers and staff in the merger and non-merger enforcement divisions and led the Bureau in bringing more than 20 enforcement actions. Wales played a key role in developing sound antitrust policy, implemented improvements to the Bureau’s infrastructure and processes, helped develop amendments to streamline Part 3 of the FTC’s Rules of Practice for administrative adjudication, and managed Bureau resources during one of its most active litigation dockets.

Wales directed several litigated enforcement efforts that blocked proposed mergers in CCS/Newpark Environmental Services, Oldcastle/Pavestone, and CCC/Mitchell. In CCC/Mitchell, the Bureau obtained the first preliminary injunction order from a district court in nearly seven years. Wales also led the Bureau in challenging several consummated mergers in court, including Polypore/Microporous and Ovation Pharmaceuticals, both of which are still pending, and he oversaw the continuing litigation and subsequent settlement involving Whole Foods/Wild Oats. He also helped lead the FTC in obtaining important relief for consumers in other merger matters, including Reed Elsevier/ChoicePoint, Fresenius/Daiichi Sanyo, Dow/Rohm & Haas, King Pharmaceuticals/Alpharma, Hexion/Huntsman, Teva/Barr Pharmaceuticals, Herff Jones/American Achievement, Getinge/Datascope, and Lubrizol/Lockhart.

In the anticompetitive conduct area, Wales oversaw the Bureau’s two lawsuits against pharmaceutical firms that entered into exclusion payment agreements – Cephalon and Solvay Pharmaceuticals. He also helped lead the FTC in obtaining critical relief for consumers in other conduct matters in the health care, retail, consumer product, and real estate industries, including Dick’s Sporting Goods, Boulder Valley Independent Practice Association, AllCare IPA, Inverness, ESL Partners/ZAM Holdings, West Penn MLS, National Association of Music Merchants, and Bristol-Myers Squibb. In the energy sector, Wales oversaw several regional gas price investigations, as well as the Commission’s rulemaking to prohibit market manipulation in the petroleum industry.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(WalesDeparture)

Related posts:

  1. FTC Staff Opinion: The Methodist Hospital System May Sell Discounted Shortage Drugs to Baytown EMS as an Emergency Humanitarian Gesture; FTC Approves Final Order Settling Charges that Universal Health Services, Inc.s Acquisition of Ascend Health
  2. FTC Order Restores Competition in U.S. Market for Equipment Used to Recharge Vehicle Air Conditioning Systems
  3. Competition Director Jeffrey Schmidt to Leave FTC
  4. FTC Challenges Pernod Ricard’s Proposed Acquisition of V&S Vin & Sprit

Bristol-Myers Squibb to Pay $2.1 Million Penalty for Failure to Disclose Agreement Involving Substantial Payments to Delay Entry of a Generic Version of the Drug Plavix

Drug maker Bristol-Myers Squibb Company (BMS) will pay $2.1 million – the largest fine allowed by law – for failing to inform the Federal Trade Commission of agreements reached with Apotex, Inc., regarding potential generic competition to its blockbuster drug Plavix. BMS’s conduct violated a 2003 FTC Order and the Medicare Modernization Act, which requires that certain drug company agreements be accurately reported to both the Commission and the U.S. Department of Justice (DOJ). The complaint alleges that BMS failed to disclose that, as part of a patent settlement in which Apotex agreed not to launch its generic version of Plavix for several years, BMS also orally stated, among other things, that it would not compete with Apotex during the first 180 days after Apotex did market its new generic drug.

The Commission’s complaint and order announced today stem from a 2003 FTC Order settling charges that BMS had entered into agreements with potential generic drug manufacturers to delay their entry into the market, in exchange for payments from BMS. The 2003 Order required BMS to submit certain future drug settlement agreements to the FTC for review. The Medicare Modernization Act also requires that certain drug agreements be filed with both the FTC and the DOJ.

In May 2007, BMS paid $1 million to settle a criminal complaint brought by the DOJ that it had lied to the agency about its Plavix agreement with Apotex, and the company also has settled several related state actions.

In filing its complaint, the first-ever brought for violations of the Medicare Modernization Act reporting requirements, the Commission stressed that the primary goal of the Act is to ensure that parties provide a complete description of the agreements they are reporting. The Medicare Modernization Act requires that unwritten understandings be described in writing and provided to the Commission along with written agreements.

“The FTC takes seriously the knowing failure of any company to comply with Commission Orders,” said Acting Bureau of Competition Director David P. Wales. “Firms submitting required filings with the FTC have an absolute obligation to be forthright and complete. The material omission in this case went to the very core of the FTC’s concerns. Filing firms must understand that they can’t reach oral understandings and simply omit them from their required MMA filings. Otherwise, the very goal of the MMA would be undermined. This case, and the significant civil penalty BMS is required to pay, should serve as an important reminder of that.”

Case Background. In 2006 BMS proposed to resolve a patent dispute with Apotex Inc., involving Apotex’s efforts to introduce a generic version of BMS’s blockbuster drug Plavix. As required by the FTC’s Order, BMS submitted the proposed agreement to the FTC and filed it in accordance with the Medicare Modernization Act as well, as did Apotex. While reviewing the proposal, FTC identified a provision in which BMS agreed not to launch an “authorized generic” version of Plavix for six months, while Apotex would be the exclusive seller of the generic version of the drug. BMS’s agreement not to launch an authorized generic could be worth a significant amount to Apotex because it would make Apotex’s product the only generic available during those first 180 days.

When questioned by the Commission, BMS withdrew its filing, renegotiated its deal with Apotex, and refiled the revised agreement with the agency. In its revised filing, BMS did not disclose that it had indicated to Apotex that it would, in fact, not launch an authorized generic.

When Apotex refiled the revised agreement with the Commission, it stated in a cover letter that BMS had made certain oral representations in addition to the written agreement, including, among other things, the discussion about not launching an authorized generic. At that point, the FTC’s staff requested BMS to certify under oath that the filed agreement represented the totality of the understandings between the parties. BMS did, and Apotex separately submitted additional exhibits and declarations consistent with its earlier position.

Faced with these conflicting certified statements, the FTC alerted the DOJ’s Antitrust Division, which convened a grand jury to investigate. Ultimately, on June 11, 2007, BMS entered a plea of guilty to two counts of perjury for, among other things, failing to disclose that it had indicated to Apotex that it would not launch an authorized generic. BMS subsequently paid $1 million in criminal fines, the maximum amount for the two counts.

While BMS’s guilty plea to DOJ’s criminal charges was not a required piece of the FTC’s case against the company, it removed any question about whether the firm could be held accountable for violating both the original FTC Order and the requirements of the law. Accordingly, the FTC demanded that BMS address its civil violations as well.

The $2.1 million civil penalty announced today represents the total statutory penalty available for BMS’s civil violations during the period of its most culpable conduct – when it allowed its proposed settlement agreement to remain “open” for review at the FTC and pending under the Medicare Modernization Act, despite failing to include the critical fact that it had made oral representations to Apotex that were contrary to the written agreement.

The Commission vote approving the complaint and consent order in settlement of the court action was 4-0. It was filed in the U.S. District Court for the District of Columbia on March 26, 2009.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants actually have violated the law.

NOTE: Stipulated final judgments and orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the documents related to this matter are available from the FTC’s web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.

(FTC File No. 061-0235; Docket No. C-4076)
(BMS-Plavix.final.wpd)

Related posts:

  1. Bristol-Myers Squibb to Pay $2.1 Million Penalty for Failure to Disclose Agreement Involving Substantial Payments to Delay Entry of a Generic Version of the Drug Plavix
  2. FTC to Hold Twitter Chat on 20th Anniversary of COPPA
  3. Statement by FTC Chairman Jon Leibowitz on Gasoline Price Spikes in California
  4. FTC Halts Massive Tech Support Scams

Bristol-Myers Squibb to Pay $2.1 Million Penalty for Failure to Disclose Agreement Involving Substantial Payments to Delay Entry of a Generic Version of the Drug Plavix

Drug maker Bristol-Myers Squibb Company (BMS) will pay $2.1 million – the largest fine allowed by law – for failing to inform the Federal Trade Commission of agreements reached with Apotex, Inc., regarding potential generic competition to its blockbuster drug Plavix. BMS’s conduct violated a 2003 FTC Order and the Medicare Modernization Act, which requires that certain drug company agreements be accurately reported to both the Commission and the U.S. Department of Justice (DOJ). The complaint alleges that BMS failed to disclose that, as part of a patent settlement in which Apotex agreed not to launch its generic version of Plavix for several years, BMS also orally stated, among other things, that it would not compete with Apotex during the first 180 days after Apotex did market its new generic drug.

The Commission’s complaint and order announced today stem from a 2003 FTC Order settling charges that BMS had entered into agreements with potential generic drug manufacturers to delay their entry into the market, in exchange for payments from BMS. The 2003 Order required BMS to submit certain future drug settlement agreements to the FTC for review. The Medicare Modernization Act also requires that certain drug agreements be filed with both the FTC and the DOJ.

In May 2007, BMS paid $1 million to settle a criminal complaint brought by the DOJ that it had lied to the agency about its Plavix agreement with Apotex, and the company also has settled several related state actions.

In filing its complaint, the first-ever brought for violations of the Medicare Modernization Act reporting requirements, the Commission stressed that the primary goal of the Act is to ensure that parties provide a complete description of the agreements they are reporting. The Medicare Modernization Act requires that unwritten understandings be described in writing and provided to the Commission along with written agreements.

“The FTC takes seriously the knowing failure of any company to comply with Commission Orders,” said Acting Bureau of Competition Director David P. Wales. “Firms submitting required filings with the FTC have an absolute obligation to be forthright and complete. The material omission in this case went to the very core of the FTC’s concerns. Filing firms must understand that they can’t reach oral understandings and simply omit them from their required MMA filings. Otherwise, the very goal of the MMA would be undermined. This case, and the significant civil penalty BMS is required to pay, should serve as an important reminder of that.”

Case Background. In 2006 BMS proposed to resolve a patent dispute with Apotex Inc., involving Apotex’s efforts to introduce a generic version of BMS’s blockbuster drug Plavix. As required by the FTC’s Order, BMS submitted the proposed agreement to the FTC and filed it in accordance with the Medicare Modernization Act as well, as did Apotex. While reviewing the proposal, FTC identified a provision in which BMS agreed not to launch an “authorized generic” version of Plavix for six months, while Apotex would be the exclusive seller of the generic version of the drug. BMS’s agreement not to launch an authorized generic could be worth a significant amount to Apotex because it would make Apotex’s product the only generic available during those first 180 days.

When questioned by the Commission, BMS withdrew its filing, renegotiated its deal with Apotex, and refiled the revised agreement with the agency. In its revised filing, BMS did not disclose that it had indicated to Apotex that it would, in fact, not launch an authorized generic.

When Apotex refiled the revised agreement with the Commission, it stated in a cover letter that BMS had made certain oral representations in addition to the written agreement, including, among other things, the discussion about not launching an authorized generic. At that point, the FTC’s staff requested BMS to certify under oath that the filed agreement represented the totality of the understandings between the parties. BMS did, and Apotex separately submitted additional exhibits and declarations consistent with its earlier position.

Faced with these conflicting certified statements, the FTC alerted the DOJ’s Antitrust Division, which convened a grand jury to investigate. Ultimately, on June 11, 2007, BMS entered a plea of guilty to two counts of perjury for, among other things, failing to disclose that it had indicated to Apotex that it would not launch an authorized generic. BMS subsequently paid $1 million in criminal fines, the maximum amount for the two counts.

While BMS’s guilty plea to DOJ’s criminal charges was not a required piece of the FTC’s case against the company, it removed any question about whether the firm could be held accountable for violating both the original FTC Order and the requirements of the law. Accordingly, the FTC demanded that BMS address its civil violations as well.

The $2.1 million civil penalty announced today represents the total statutory penalty available for BMS’s civil violations during the period of its most culpable conduct – when it allowed its proposed settlement agreement to remain “open” for review at the FTC and pending under the Medicare Modernization Act, despite failing to include the critical fact that it had made oral representations to Apotex that were contrary to the written agreement.

The Commission vote approving the complaint and consent order in settlement of the court action was 4-0. It was filed in the U.S. District Court for the District of Columbia on March 26, 2009.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants actually have violated the law.

NOTE: Stipulated final judgments and orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the documents related to this matter are available from the FTC’s web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.

(FTC File No. 061-0235; Docket No. C-4076)
(BMS-Plavix.final.wpd)

Related posts:

  1. Bristol-Myers Squibb to Pay $2.1 Million Penalty for Failure to Disclose Agreement Involving Substantial Payments to Delay Entry of a Generic Version of the Drug Plavix
  2. FTC to Hold Twitter Chat on 20th Anniversary of COPPA
  3. Statement by FTC Chairman Jon Leibowitz on Gasoline Price Spikes in California
  4. FTC Halts Massive Tech Support Scams

New FTC Web Site Helps Consumers Cope With Tough Economic Times

The Federal Trade Commission, the nation’s consumer protection agency, has a new Web site at ftc.gov/MoneyMatters for people dealing with debt; struggling to find a job; or trying to create a budget, save, and spend wisely during these difficult times.

Money Matters offers short, practical tips, videos, and links to reliable resources for more information on topics like credit repair, debt collection, job-hunting and jobs scams, vehicle repossession, managing mortgage payments, and foreclosure rescue scams.

To learn more, go to www.ftc.gov/MoneyMatters.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FYI money matters)

Related posts:

  1. FTC, California Office of Privacy Protection to Co-Host Workshop for Businesses on Best Practices for Protecting Personal Information and Securing Data
  2. FTC Issues Staff Report on Roundtable Discussion About Phishing Education
  3. FTC Testifies on Behavioral Advertising
  4. Payday Loan Lead Generators Settle FTC Charges