However, there are several “takeaways” from the recent ruling.Background Between 2008 and 2009, hackers accessed Wyndham’s systems on three separate occasions, stealing the personal and financial information for hundreds of thousands of consumers, leading to more than $10.6 million in fraudulent charges. In the wake of these breaches, the FTC filed suit against Wyndham and related subsidiaries under the caption FTC v. Wyndham Worldwide Corp., Case. No. 13-cv-01887, which was eventually venued in the U.S. District Court for the District of New Jersey. The complaint alleged that Wyndham’s lax cybersecurity policies constituted unfair business practices and that the company’s privacy policy was deceptive in violation of the FTC’s prohibition on “unfair or deceptive acts or practices in or affecting commerce” as codified in 15 U.S.C. § 45(a). The FTC alleged that the following, “taken together, unreasonably and unnecessarily exposed consumers’ personal data to unauthorized access and theft.”

Plaintiff, the Federal Trade Commission (“FTC”), for its Complaint alleges:1. The FTC brings this action under Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 53(b), to obtain permanent injunctive relief, rescission, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief for Defendant’s acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), in connection with Defendant’s false advertising that its “Clean Diesel” vehicles had low emissions, complied with state and federal emissions standards, were environmentally friendly, and retained a high resale value.JURISDICTION2. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), and 1345, and 15 U.S.C. § 45(a).VENUE AND INTRADISTRICT ASSIGNMENT3.

ed order against a rental screening subsidiary of a credit reporting agency for alleged violations of 15 U.S.C. §§ 1681-1681x (FCRA) and 15 U.S.C. § 45(a) (FTC Act), related to ensuring maximum possible accuracy of its tenant screening reports and for failing to honor security freeze and lock requests. In particular, the agencies alleged that the subsidiary failed to take steps to ensure the rental background checks that landlords use to decide who gets housing were accurate, and that the subsidiary also withheld from renters the names of third parties that were providing the inaccurate information. (Alleged UDAAP violations: deceptive, unfair).Federal Trade Commission & Commodity Futures Trading Commission. Digital Assets & Fraud. FTC announced a settlement with a bankrupt cryptocurrency company to resolve allegations that the company falsely claimed that customers' accounts were "safe" because they were insured by the FDIC, when those assets were not in fact insured, in violation of 15 U.S.C. § 45(a) (FTC Act) and U.S.C. § 6821 (GLB Act). The settlement permanently bans the company from handling consumers' assets. FTC also sued the company's former CEO for directing and participating in the false claims. Separately, CFTC filed a complaint against the former CEO regarding alleged fraud and registration failures in connection with the company's digital asset platform and its operation of an unregistered commodity pool. Additionally, Comm'r. Pham released a statement in support of the agency's action. (Alleged UDAAP violations: deceptive).Federal Trade Commission. Merchant Cash Advance (MCA). FTC announced that a federal court granted summary judgment against an MCA company, and an individual regarding allegations that they violated 15 U.S.C. § 45(a) (FTC Act Sec. 5), deceived small businesses and other organizations by misrepresenting the terms of MCAs the business provided, and then used unfair collection practices, including sometimes threatening physical violence, to compel consu

[author: Michael Buckalew]The following document provides a monthly roundupsummarizing enforcement actions, guidance, rulemakings, and other public statements from the Consumer Financial Protection Bureau and the Federal Trade Commission regarding the prohibition on unfair, deceptive, or abusive acts or practices (UDAAP) in the marketplace for consumer financial services.Enforcement and LitigationFederal Trade Commission & Utah. Fraud & Endorsements. The FTC and Utah Division of Consumer Protection publicized an agreement with the principals of a Utah-based real estate investment training company to resolve allegations that defendants used false promises to sell consumers a series of expensive real estate investment training programs. According to the complaint, defendants enlisted real estate television celebrities to endorse the programs. The agencies asserted the companies and individuals violated 15 U.S.C. § 45, 16 C.F.R. Part 310, and the Utah Consumer Sales Practices Act, Utah Code § 13-11-1 et seq., the Business Opportunity Disclosure Act, Utah Code § 13-15-1 et seq., and the Telephone Fraud Prevention Act, in the marketing and sale of real estate training services. Under the agreement, defendants will pay $15 million and be banned from selling moneymaking opportunities. (UDAAP Enforcement Focus: Deceptive).Federal Trade Commission. Student Loans. The FTC took action to stop a pair of alleged student loan debt relief schemes (#1 and #2) that it says bilked students out of approximately $12 million by using deceptive claims about repayment programs and loan forgiveness that did not exist. The company claimed to be or be affiliated with the Department of Education and that payments to the companies would be counted towards reducing their loan balances. In both cases, the defendants are accused of violating 15 U.S.C. § 45(a), 16 C.F.R. Part 310, 15 U.S.C. § 6821. In one of the cases, defenda

On August24, 2015 the Third Circuit affirmed the decision of the District Court and denied Wyndham’s motion to dismiss the complaint.Factual Background In 2012, after a two-year investigation into Wyndham’s data security practices, the FTC filed suit against the hospitality company alleging that Wyndham had engaged in “unfair … acts or practices” in violation of the Federal Trade Commission Act 15 U.S.C. § 45(a), by failing to take “reasonable and appropriate” measures to adequately secure hotel guests’ personal information. Specifically, the FTC alleged that between 2008 and January 2010, hackers gained access on three separate occasions to Wyndham’s computer network and that Wyndham engaged in a number of practices that “unreasonably and unnecessarily exposed consumers’ personal data to unauthorized access and theft” including the following: the storage of credit card information in clear, unencrypted text; failure to require employees to use complex user IDs and passwords to access company servers; failure to use readily available security measures, such as firewalls to limit access between the corporate network and the Internet; failure to implement reasonable information security procedures prior to connecting local computer networks to corporate-level networks; failure to “adequately restrict” the access of third-party vendors to its networks; failure to employ reasona

iscusses how the Federal Trade Commission (FTC) has recognized the need for regulation and oversight of this nascent technology as companies increasingly develop or apply AI solutions to their platforms.The relevant sources of information used in this publication include:FTC Reports to CongressFTC Business Blogs and Business GuidanceFTC Press Releases and Joint StatementsFTC Enforcement ActionsCase LawLaw Review and Journal ArticlesStatements by FTC Commissioners and Testimony to CongressInterview with FTC Attorney Michael AtlesonFTC Authority"The FTC's mission is protecting the public from deceptive or unfair business practices and from unfair methods of competition through law enforcement, advocacy, research, and education."1 The FTC derives much of its authority from the FTC Act. The majority of FTC enforcement actions stem from deceptive business practices or unfair business practices. The FTC also has a role regulating and enforcing antitrust concerns.Section 5(a) of the FTC Act, 15 U.S.C. § 45(a) ("Section 5(a)") prohibits "unfair or deceptive acts or practices in or affecting commerce." Deceptive omissions of material facts and misrepresentations are also "deceptive acts or practices" prohibited by Section 5(a). "Acts or practices are unfair under Section 5 of the FTC Act if they cause or are likely to cause substantial injury to consumers that consumers cannot reasonably avoid themselves and that is not outweighed by countervailing benefits to consumers or competition. 15 U.S.C. § 45(n)."2Section 5(a) also prohibits "unfair methods of competition." Unfair methods of competition include any conduct that would violate the Sherman Antitrust Act or the Clayton Act.3 While AI and its related technologies may be new, the tools the FTC possess to regulate them are not.Definition of AIDefining the term "AI" is an arduous task. The Encyclopedia Britannica defines AI as: "the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intellige

ts have previously rejected attempts to extend Section 5 liability to one company based on the reaction of other market participants or on the aggregation of a type of conduct.[32]Even though, as discussed above, Section 5’s scope is conceptually distinct from the Sherman and Clayton Act, courts have often rejected attempts to hold conduct liable under Section 5 that would fail under Sherman Act and Clayton Act caselaw.[33]Federal courts have been increasingly suspicious of attempts by agencies to expand regulatory authority through revised interpretations of federal law.[34]Still, the Policy Statement offers important insight into the FTC’s current view of Section 5 and signals that the FTC intends to pursue aggressive enforcement actions on novel legal theories. Even if those enforcement actions fall short of liability, they could involve lengthy and expensive investigations.Special thanks to associate Tina Asgharian (New York–Antitrust) who co-authored this publication.Footnotes[1] 15 U.S.C. § 45(a)(1). Section 5 also prohibits “unfair or deceptive acts or practices in or affecting commerce.” Id. But the Policy Statement is limited to “unfair methods.” [2] E.I. du Pont de Nemours & Co. v. FTC, 729 F.2d 128, 136 (2d Cir. 1984). [3] FTC v. Ind. Fed’n of Dentists, 476 U.S. 447, 454 (1986) (citation omitted). [4] Atl. Refining Co. v. FTC, 381 U.S. 357, 367 (1965). [5] Compare Atl. Refining, 381 U.S. at 368 (“[W]e give great weight to the Commission’s conclusion.”), with Ind. Fed’n of Dentists, 476 U.S. at 454 (“[C]ourts are to give some deference to the Commission’s informed judgment that a particular commercial practice is to be condemned as ‘unfair.’” (emphasis added)). [6] FTC, “Statement of Enforcement Principles Regarding ’Unfair Methods of Competition’ Under Section 5 of the FTC Act” (Aug. 13, 2015). [7] Policy Statement at 4 (claiming that Section 5 hinges on “the common sense of fairness and right dealing which indicates plainly the distinction between close bargaining and oppre

On May 11, 2021, the FTC filed a responsive letter, stating its intention to file an Amended Complaint replacing the prior requested 13(b) monetary relief with a new “claim and seek civil penalties for Defendants’ violations of Section 521 of the Gramm-Leach-Bliley Act, 15 U.S.C. § 6821.” On May 14, 2021, the FTC filed a Motion for Leave to file the Amended Complaint.On June 10, 2021, the FTC filed an Amended Complaint where it sought to bring monetary penalties and a permanent injunction under Sections 5(a), 5(m)(1)(A), 13(b), 16(a), and 19 of the FTC Act, 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a), and 57b, and Section 522(a) of the Gramm-Leach-Bliley Act, 15 U.S.C. §6822(a).FTC v. Simple Health Plans LLC, No. 18-cv-62593 (S.D. Fla.)On April 22, 2021, one of the individual defendants filed an Emergency Motion to Dissolve the Preliminary Injunction, due to the Supreme Court’s ruling in AMG. That defendant submitted two notices of supplemental authority referencing other lower court cases dissolving preliminary injunctions following AMG.The FTC filed a response to the Motion on April 30, 2021, arguing that the Motion was not ripe and that the FTC still had Section 19 authority.On June 10, 2021, defendants filed a response to an order of supplemental briefing regarding AMG and their April 22 Motion to Dissolve.

pdfli See https://www.ttb.gov/images/pdfs/rulings/2013-2.pdf and https://www.ttb.gov/images/pdfs/rulings/2004-1.pdflii https://www.ttb.gov/images/pdfs/rulings/2014-2.pdfliii 21 C.F.R. § 101.91.liv See generally 15 U.S.C. §§ 45, 46, 49.lv 15 U.S.C. § 45(a). lvi 15 U.S.C. § 45(n).lvii 15 U.S.C. §§ 52-55. lviii 15 U.S.C. § 55(a)(1).lixF.T.C. v. Nat’l Comm’n on Egg Nutrition, 517 F.2d 485, 488 (7th Cir. 1975).

Section 5 of the FTC Act authorizes administrative proceedings to prevent and remedy “unfair or deceptive acts or practices in or affecting commerce.” 15 U.S.C. §45(a). If the FTC has “reason to believe” that a violation has occurred, the FTC may issue an administrative complaint setting forth its charges against the alleged wrongdoer.