FTC Approves Final Order Preserving Competition in Four Generic Drug Markets

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that Actavis plc’s acquisition of Forest Laboratories, Inc. would likely be anticompetitive.

Under the order, first announced in June 2014, the companies have agreed to relinquish their current rights to market generic diltiazem hydrochloride extended release capsules (AB4), which are used to treat hypertension and chronic stable angina; generic ursodiol tablets used to treat primary biliary cirrhosis of the liver; and generic propranolol hydrochloride extended release capsules used to treat hypertension. The companies also will relinquish future marketing rights for generic lamotrigine orally disintegrating tablets, which are used to treat seizures.

The Commission vote approving the final order was 5-0. (FTC File No. 1410098; the staff contact is Christine L. Tasso, Bureau of Competition, 202-326-2232)

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, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., Room 7117, Washington, DC 20001. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Google to Refund Consumers at Least $19 Million to Settle FTC Complaint It Unlawfully Billed Parents for Children’s Unauthorized In-App Charges

Note: A conference call for media with FTC Chairwoman Edith Ramirez will occur as follows:

Date: Sept. 4, 2014
Time: 1:30 p.m. ET
Call-in lines, which are for media only, will open 15 minutes prior to the start of the call. Chairwoman Ramirez and FTC staff will be available to take questions from the media about the case.

Google Inc. has agreed to settle a Federal Trade Commission complaint alleging that it unfairly billed consumers for millions of dollars in unauthorized charges incurred by children using mobile apps downloaded from the Google Play app store for use on Android mobile devices. Under the terms of the settlement, Google will provide full refunds – with a minimum payment of $19 million – to consumers who were charged for kids’ purchases without authorization of the account holder. Google has also agreed to modify its billing practices to ensure that it obtains express, informed consent from consumers before charging them for items sold in mobile apps.

The Commission’s complaint against Google alleges that since 2011, Google violated the FTC Act’s prohibition on “unfair” commercial practices by billing consumers for charges by children made within kids’ apps downloaded from the Google Play store. Many consumers reported hundreds of dollars of such unauthorized charges, according to the complaint.

The FTC infographic 'Keeping Up With Kids' Apps', which includes information on 4 things your kids' apps might do but might not tell you, and what you can do at the online app store, on your couch, and on your phone or tablet.
Keeping Up With Kids’ Apps infographic – click to view full-size.

“For millions of American families, smartphones and tablets have become a part of their daily lives,” said FTC Chairwoman Edith Ramirez. “As more Americans embrace mobile technology, it’s vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorize.”

This marks the Commission’s third case concerning unauthorized in-app charges by children. In January, the Commission announced a settlement with Apple Inc., requiring Apple to provide full refunds to consumers who were billed for unauthorized charges by children – paying a minimum amount of $32.5 million – and obtain express, informed consent for in-app charges. And in July, the Commission filed a complaint in federal court against Amazon.com, Inc., similarly seeking full refunds for consumers and an order requiring informed consent for in-app charges.

In-app charges are a component of many apps available from Google Play and can range from 99 cents to $200. In many apps used by children, users are invited to accumulate virtual items that help them advance in the game, though as the FTC’s complaint notes, the lines between virtual money purchases and real money purchases can be blurred. The FTC’s complaint alleges that Google billed consumers for many such charges by children without obtaining account holders’ authorization, leaving consumers holding the bill.

When Google first introduced in-app charges to the Google Play store in 2011, the complaint alleges, Google billed for such charges without any password requirement or other method to obtain account holder authorization. Children could incur in-app charges simply by clicking on popup boxes within the app as they used it.

According to the complaint, in mid- to late 2012, Google began presenting a pop-up box that asked for the account holder’s password before billing in-app charges. The new pop-up, however, did not contain any information about the charge. Google also did not inform consumers that entering the password opened up a 30-minute window in which a password was no longer required, allowing children to rack up unlimited charges during that time.

During this time, many thousands of consumers complained to Google about children making unauthorized in-app charges, according to the complaint. Some parents noted that their children had spent hundreds of dollars in in-app charges without their consent. Others noted that children buying virtual in-game items with real money were unaware they were causing their parents to be billed.

Google employees referred to the issue as “friendly fraud” and “family fraud” in describing kids’ unauthorized in-app charges as a leading source of refund requests, according to the complaint. The complaint further alleges that Google’s practice has been to refer consumers seeking refunds first to the app developer.

The settlement will require Google to provide full refunds of unauthorized in-app charges incurred by children and to modify its billing practices to obtain express, informed consent from consumers before billing them for in-app charges. If the company gets consumers’ consent for future charges, consumers must have the option to withdraw their consent at any time.

The settlement requires Google to contact all consumers who placed an in-app charge to inform them of the refund process for unauthorized in-app charges by children within 15 days of the order being finalized. Google must make these refunds promptly, upon request from an account holder. Should Google issue less than $19 million in refunds to consumers within the 12 months after the settlement becomes final, the company must remit the balance to the Commission for use in providing additional remedies to consumers or for return to the U.S. Treasury.

The Commission vote to accept the proposed consent order for public comment was 4-0-1, with Commissioner Joshua D. Wright recorded as recused.

The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through Oct. 6, 2014, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

NOTE: The Commission issues an administrative 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. 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 up to $16,000.

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 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Announces Agenda, Panelists for Upcoming Big Data Workshop

9:00 Opening Remarks
Edith Ramirez, Chairwoman, Federal Trade Commission 9:15 Presentation: Framing the Conversation
Solon Barocas, Postdoctoral Research Associate, Princeton University Center for Information Technology Policy 9:30 Panel 1: Assessing the Current Environment
This panel will examine the current uses of big data in a variety of contexts and how these uses impact consumers.

Kristin Amerling, Chief Investigative Counsel and Director of Oversight, U.S. Senate Committee on Commerce, Science and Transportation
danah boyd, Principal Researcher, Microsoft Research and Research Assistant Professor, New York University
Mallory Duncan, Senior Vice President and General Counsel, National Retail Federation
Gene Gsell, Senior Vice President, U.S. Retail & CPG, SAS
David Robinson, Principal, Robinson + Yu
Joseph Turow, Professor, Annenberg School for Communication, University of Pennsylvania

11:00 Panel 2: What’s on the Horizon with Big Data?
This panel will explore potential uses of big data as well as the potential benefits and harms for particular populations of consumers.

Alessandro Acquisti, Associate Professor of Information Systems and Public Policy, Heinz College, Carnegie Mellon University and Co-director of the CMU Center for Behavioral Decision Research
Pamela Dixon, Founder and Executive Director, World Privacy Forum
Cynthia Dwork, Distinguished Scientist, Microsoft Research
Mark MacCarthy, Vice President for Public Policy, Software Information Industry Association
Nicol Turner-Lee, Vice President and Chief Research & Policy Officer, Minority Media and Telecommunications Council

1:20 Remarks
Julie Brill, Commissioner, Federal Trade Commission 1:30 Presentation: Digging into the Data
Latanya Sweeney, Chief Technologist, Federal Trade Commission
Jinyan Zang, Research Fellow in Technology and Data Governance, Federal Trade Commission 1:45 Panel 3: Surveying the Legal Landscape
This panel will review antidiscrimination and consumer protection laws and discuss how they may apply to the use of big data, and whether there may be gaps in the law.

Leonard Chanin, Partner, Morrison Forrester
Carol Miaskoff, Assistant Legal Counsel, Office of Legal Counsel, Equal Employment Opportunity Commission
Montserrat Miller, Partner, Arnall Golden Gregory LLP
C. Lee Peeler, President and CEO of the Advertising Self-Regulatory Council and Executive Vice President, National Advertising Self-Regulation, Council of Better Business Bureau
Peter Swire, Professor of Law and Ethics, Scheller College of Business, Georgia Institute of Technology

3:15 Panel 4: Considerations on the Path Forward
This panel will explore best practices for the use of big data to protect consumers.

Christopher Calabrese, Legislative Counsel, American Civil Liberties Union
Daniel Castro, Senior Analyst, Information Technology and Innovation Foundation
Jeanette Fitzgerald, General Counsel and Chief Privacy Officer, Epsilon
Jeremy Gillula, Staff Technologist, Electronic Frontier Foundation
Michael Spadea, Director, Promontory Financial Group
Christopher Wolf, Senior Partner, Hogan Lovells; Founder and Chair, Future of Privacy Forum; Chair, National Civil Rights Committee, Anti-Defamation League

4:30 Jessica Rich, Director, Bureau of Consumer Protection, Federal Trade Commission

FTC Updates Telemarketer Fees for the Do Not Call Registry as of October 1, 2014

The Federal Trade Commission has announced updated fees starting on October 1, 2014, for telemarketers accessing phone numbers on the National Do Not Call Registry.

All telemarketers calling consumers in the United States are required to download the numbers on the Do Not Call Registry to ensure they do not call those who have registered their phone numbers. The first five area codes are free, and organizations that are exempt from the Do Not Call rules, such as some charitable organizations, may obtain the entire list for free. Telemarketers must subscribe each year for access to the Registry numbers.

The access fees for the Registry are being increased as required by the Do‑Not‑Call Registry Fee Extension Act of 2007. Under the Act’s provisions, in fiscal year 2015 (from October 1, 2014 to September 30, 2015), telemarketers will pay $60, an increase of $1, for access to Registry phone numbers in a single area code, up to a maximum charge of $16,482 for all area codes nationwide, an increase from the previous maximum of $16,228. Telemarketers will pay the same as last year for numbers they subscribe to receive during the second half of the 12‑month subscription period, $30 per area code.

For consumers who want to add their phone number to the Registry, registration is free and does not expire.

The Commission vote authorizing publication of the Federal Register notice announcing the new fees was 5-0. (FTC File No. P034305; the staff contact is Ami Dziekan, Bureau of Consumer Protection, 202‑326‑2648)

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 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Approves Final Order Barring Anticompetitive Conduct among Barcode Resellers

Following a public comment period, the Federal Trade Commission has approved final orders settling charges that two Internet resellers of UPC barcodes, which are used by retailers to scan prices and maintain inventories, invited competitors to join in a collusive scheme to raise the prices they charged for the barcodes.

According to the FTC’s complaints, the resellers, who sold barcodes on the secondary market, violated the Federal Trade Commission Act by repeatedly inviting competitors to collude to raise prices.

Under the orders, InstantUPCCodes.com and its principal, Jacob J. Alifraghis; and 680 Digital, Inc., d/b/a Nationwide Barcode, and its principal, Philip B. Peretz, are barred from communicating with competitors about barcode rates or prices; seeking or participating in an agreement with any competitor to divide markets, allocate consumers, or fix prices; and urging any competitor to raise, fix, or maintain prices or limit or reduce the terms or levels of service they provide.   

The Commission vote approving the final order was 5-0. (FTC File No. 141 0036; the staff contact is Matthew Accornero, Bureau of Competition, 202-326-3102.)

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, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Announces Winners of “Zapping Rachel” Robocall Contest

The Federal Trade Commission today announced the winners of its “Zapping Rachel” robocall contest held at the DEF CON 22 hacking conference in Las Vegas Aug. 7-10.

Zapping Rachel marks the latest step in the FTC’s ongoing campaign to combat illegal, pre-recorded telemarketing calls known as robocalls. The contest challenged participants to design a robocall honeypot which is an information system designed to attract robocallers, and help law enforcement authorities, researchers, and others gain enhanced insights into robocallers’ tactics.

A total of 60 teams and individuals registered for one or more of the contest’s three phases and the agency received 13 total submissions. A panel of expert judges selected the winning entries for each of the three phases, along with two honorable mentions for the final phase.

“Congratulations to all the winners and honorable mentions of our Zapping Rachel contest,” said Jessica Rich, director, FTC’s Bureau of Consumer Protection. “We were thrilled with the level of interest and participation, particularly from DEF CON attendees. We look forward to furthering our dialogue with this community on the development of robocall honeypots, and any other tools that can help win the fight against illegal robocalls.”

The winners are:

The Creator Phase: Jon Olawski will receive $3,133.70 for his winning honeypot. Phase 1 challenged contestants to build a honeypot that identifies inaccurate information in incoming calls, such as spoofed caller IDs, or determines which calls are likely robocalls. Jon’s honeypot uses a combination of an audio captcha filter, call detail analysis, and recording and transcription analysis to determine, on a sliding scale, the likelihood that an incoming call was a robocall.

The Attacker Phase: Jan Volzke will receive $3,133.70 for his winning solution, Droid Rachel. Phase 2 challenged contestants to circumvent an existing honeypot and prevent it from collecting information on incoming calls. Droid Rachel circumvents the existing honeypot by employing a four-step targeting process that screens out phone numbers potentially connected to a honeypot, and optimizes Droid Rachel’s ability to send robocalls using unsuspecting consumers’ Android phones.

The Detective Phase: The winning team is Yang Yang and Jens Fischer, and they will share $3,133.70. Phase 3 challenged participants to analyze call data from an existing honeypot and develop algorithms that predict which calls are likely robocalls. The judges also selected two honorable mentions – Sean Beck and DarkTyphoon – and each will receive $1,337. The winning solution focused on metrics such as the number of calls made, whether the number called was a toll-free number, and the time of the call to identify likely robocalls. Sean’s solution focused on time of call and number of calls made, while DarkTyphoon’s solution utilized additional metrics such as the area code and exchange numbers called.

Judges scored submissions based on functionality and accuracy, as well as innovation and creativity. To be eligible for prizes, contestants had to satisfy the eligibility requirements specified in the Official Rules. Complete rules and judging criteria are available on the contest webpage. The winning solutions include open-source code and are designed to assist in the battle against robocallers, and the FTC will post additional information about the submissions online in the coming weeks.

The FTC will continue its efforts to engage information security experts in its ongoing battle against robocalls. Please continue to check FTC.gov/ZapRachel for updates.

FTC Requests Public Comments on SCI’s Application to Approve Sale of Funeral Home in California

The Federal Trade Commission is currently accepting public comments on an application by Service Corporation International (SCI) to sell a funeral home located in Auburn, California, as required under the FTC’s May 2014 order settling charges that SCI’s acquisition of Stewart Enterprises, Inc. would likely be anticompetitive. In total, the order requires the combined SCI/Stewart to divest 53 funeral homes and 38 cemeteries, to ensure that competition is maintained in 59 communities throughout the United States.

SCI’s current application petitions the FTC to approve the divestiture of the Lassila Funeral Chapel in Auburn, California to Wagemann Holdings, Inc.

According to the application, Douglas Wagemann, owner of Wagemann Holdings, Inc., has extensive experience in operating funeral homes, which will assure that this property remains a strong and effective competitor in the local market. This petition replaces a prior petition submitted by SCI to divest Lassila Funeral Chapel to Heritage Oaks Memorial Group, Inc., which has been withdrawn.

The Commission will decide whether to approve the proposed divestiture after expiration of a 30-day public comment period. Public comments may be submitted until September 29, 2014. Written comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. Comments can also be filed electronically regarding the proposed divestiture to Wagemann Holdings, Inc. Copies of the application can be found on the FTC’s website and as a link to this press release. (FTC File No. 131-0163, Docket No. C-4423; the staff contact is Elizabeth A. Piotrowski, Bureau of Competition, 202-326-2623)

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 antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Puts Conditions on Proposed Acquisition of Insight Pharmaceuticals by Marketer of Dramamine

Pharmaceutical company Prestige Brands Holdings, Inc., the maker of Dramamine, has agreed to divest assets and marketing rights for the over-the-counter motion sickness drug Bonine to settle Federal Trade Commission charges that Prestige’s proposed acquisition of Insight Pharmaceuticals Corporation would likely be anticompetitive. The FTC’s proposed settlement with Prestige requires the company to divest Bonine to Wellspring Pharmaceuticals within 10 days after the acquisition takes place.

Based in Sarasota, Florida, Wellspring produces a range of over-the-counter medications and markets them in the United States and Canada. Prestige proposed to acquire Insight for $750 million, under an agreement dated April 25, 2014.

 According to the FTC’s complaint, Prestige’s Dramamine, which is the best-selling branded product in the market for over-the-counter motion-sickness drugs, and Insight’s Bonine, are the only two branded products with significant sales. Absent a remedy, the acquisition would eliminate the close competition between Dramamine and Bonine, likely leading to higher prices for consumers.

More information about the market for this drug and the consent agreement can be found in the analysis to aid public comment for this matter on the FTC’s website.

The Commission vote to accept the proposed consent order for public comment was 5-0.  The proposed settlement is part of the Commission’s ongoing effort to protect U.S. consumers from higher healthcare-related costs.

The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through September 29, 2014, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice. 

NOTE: The Commission issues an administrative 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.  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 up to $16,000 per day.

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 antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Warns Against Government Imposter Scams

Can you spot a government imposter?

Even if your phone’s caller ID says “FTC” or “IRS,” or shows Washington, DC’s “202” area code, it could still be a scam. Scammers know how to show fake information on caller ID.

The Federal Trade Commission is warning consumers about scammers who pretend they’re with the government to scare you into sending money. They say you owe taxes or some other debt, and tell you to put money on a prepaid debit card and tell them the number — something no government agency would ask you to do.

Others say you’ve won big money in a sweepstakes the FTC or some other agency is supervising, and that the money will be yours when you pay for shipping, taxes, or some other expense. But it’s just phony baloney. Federal government agencies will never ask you to send money for prizes.

To learn more about how these scams work and how to avoid them, read the FTC’s consumer blog post Can you spot a government imposter? and Government Imposter Scams.

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 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Seeks Public Comment on AgeCheq, Inc., Proposal for Parental Verification Method Under COPPA Rule

The Federal Trade Commission is seeking public comment on a proposed verifiable parental consent method that AgeCheq, Inc., has submitted for Commission approval under the agency’s Children’s Online Privacy Protection Rule.

Under the rule, online sites and services directed at children must obtain permission from a child’s parents before collecting personal information from that child. The rule lays out a number of acceptable methods for gaining parental consent, but also includes a provision allowing interested parties to submit new verifiable parental consent methods to the Commission for approval.

In a Federal Register notice to be published shortly, the FTC is seeking public comment about the proposed AgeCheq verifiable parental consent method; whether the proposed method is already covered by the existing methods included in the rule and whether it meets the rule’s requirement that it be reasonably calculated to ensure that the person providing the consent is actually the child’s parent. The Commission also seeks comment on whether the program poses a risk to consumers’ information and whether that risk is outweighed by the benefits of the program. The comment period will last until Sept. 30, 2014.

NOTE: Publication of this Federal Register notice does not indicate Commission approval of the program. The Commission has 120 days to review proposed verifiable parental consent methods and must set forth its conclusions in writing.

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 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.