# HOUSE COMMITTEE ON ENERGY AND COMMERCE (2024)

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A2e10d7726560a2d1

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

TESTIMONY OF
CHAIR LINA M. KHAN
Before the
HOUSE COMMITTEE ON ENERGY AND COMMERCE
SUBCOMMITTEE ON INNOVATION, DATA, AND COMMERCE
UNITED STATES HOUSE OF REPRESENTATIVES
WASHINGTON, D.C
JULY 9, 2024

I.

INTRODUCTION

Chair Bilirakis, Ranking Member Schakowsky, and members of the Subcommittee,
thank you for inviting me to testify today. 1 This testimony will address the Federal Trade
Commission’s (“FTC”) Fiscal Year 2025 budget request and highlight the agency’s important
work to protect the American public from fraud and corporate abuse and to promote open,
competitive markets. For over a century, Congress has codified a policy in favor of competition
over consolidation. In the more than a century since the FTC Act was passed, Congress has
redoubled its commitment to open markets and free and fair competition as the economy and its
players have evolved.
The FTC’s statutory mandate places it on the front lines of some of the most significant
hardships confronting American consumers, workers, and small businesses. I am endlessly
impressed by the commitment and ingenuity of the agency’s staff, whose hard work and fidelity
to that mandate protect every American. For example, the FTC has brought numerous
enforcement actions to secure stronger protections for the privacy of Americans’ sensitive data.
The Commission also continues its efforts to fight fraud, challenging everything from junk fees
and deceptive advertising to scams of every stripe. To tackle the challenges posed by artificial
intelligence, the FTC is ramping up its efforts across the agency, securing settlements to limit
the use of illegally collected data for AI purposes and even launching a voice cloning challenge
to spur the private sector to help innovate technological solutions.
The FTC has notched numerous wins to promote free and fair competition. For
example, the Commission finalized a rule banning noncompete clauses, which would boost
wages, unlock opportunity, spur entrepreneurship, and promote liberty. The Commission also
challenged the largest supermarket merger in U.S. history, alleging that it would increase prices
and reduce wages for hundreds of thousands of workers. And the Commission is holding
pharmaceutical companies accountable for junk patent listings on critical prescription drugs,
paving the way for three of the four major asthma inhaler manufacturers to lower out-of-pocket
inhaler costs for Americans to just $35.
To advance these shared priorities, we are grateful to have bipartisan support from this
Subcommittee, the full Committee, and Congress. To name a few:
•

To protect the privacy rights and protections of all Americans, this Subcommittee has
advanced comprehensive, bipartisan legislation that would enhance the FTC’s tools to
combat pervasive online tracking that is often undisclosed or difficult, or virtually
impossible, for consumers to escape. I welcome broad federal legislation to establish
baseline consumer protections for all Americans and build on the FTC’s own numerous
enforcement actions. For example, the FTC has brought enforcement actions against
companies who improperly sold sensitive personal health data to large social media
advertising companies, secured a first-time ban on the misuse of facial recognition
software, and notched other victories that protect Americans’ sensitive data.

This written testimony reflects my own views. The oral statement and responses to questions are also my own and
do not necessarily reflect the views of the Commission or any other Commissioner.

1

1

•

The full Committee advanced the Protecting Americans’ Data from Foreign
Adversaries Act of 2024, which passed unanimously in the House, to prevent data
brokers from selling Americans’ most sensitive data to foreign adversaries, including
the People’s Republic of China. The FTC has taken groundbreaking actions against data
brokers who sell these types of data to the highest bidder. Earlier this year, the
Commission brought actions against two location data aggregators, X-Mode Social and
InMarket Media, banning them from selling Americans’ sensitive location data.
Additionally, the FTC’s ongoing suit against Kochava, Inc., alleges that the data broker
sold datasets that make it easier to track consumers’ visits to sensitive locations, such as
doctors’ offices, houses of worship, and temporary shelters for domestic violence
survivors.

•

This Subcommittee has advanced multiple bills that would prohibit junk fees and
deceptive advertising across multiple sectors of the economy. In October 2023, the FTC
announced a separate proposed rulemaking to crack down on deceptive or unfair junk
fees—which cost consumers an estimated $90 billion a year—by prohibiting companies
from advertising prices that do not include all mandatory fees and preventing companies
from misrepresenting the amount and purpose of fees and whether they are refundable.

•

The Commission continues to answer bipartisan calls to utilize authority provided by
Congress to hold companies accountable when they use the “Made in America” label to
deceive customers, at the expense of honest businesses who produce their products in
the United States.

•

Finally, reflecting broad concern around the rising cost of prescription drugs, the FTC
continues to heed bipartisan calls of Congress to vigilantly scrutinize the opaque
business practices of pharmacy benefit managers that limit access to life-saving drugs
and squeeze independent pharmacists.

These accomplishments, many of which carry bipartisan support, represent only a small
slice of the good work of this small-but-mighty agency, which has notched wins for everyday
Americans in spite of opponents who often have near-infinite resources to deploy against us.
While funding increases in recent years have contributed meaningfully to the FTC’s
accomplishments, unfortunately the FTC’s current budget, as well as proposals for future
funding, cannot sustain our current personnel levels and would mean far fewer resources to
support the Commission’s critical work.
The FTC provides remarkable value to the American public. In FY2023, every $1 of the
FTC’s costs returned an estimated $14 in benefits to the American public through its consumer
protection and competition law enforcement efforts. 2 In total, the hard work of the FTC staff
These estimates were calculated based on performance measures 1.1.1 (money returned to consumers and
treasury), 1.1.2 (consumer savings from consumer protection law enforcement), and 2.1.2 (consumer savings
from antitrust enforcement). For more details on measurement and data quality, see FTC, FTC Data Quality
Appendix, https://www.ftc.gov/system/files/ftc gov/pdf/DQA-FY22-26%2C-3-1-2023.pdf (last visited Apr. 23,
2023). These figures have been updated from previously reported consumer savings estimates, originally
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saved the public nearly $3 billion last fiscal year. The agency could do even more if Congress
were to restore the power of the Commission to obtain equitable monetary relief for consumers
under Section 13(b) of the FTC Act.
II.

BUDGET AND RESOURCES

More than most agencies, the FTC invests the resources Congress grants us in its people.
Today, the agency has roughly 1,349 employees on board, the cost of which comprises
approximately 70 percent of our total budget. 3 This is nonetheless nearly 400 fewer full-time
employees (“FTE”) than in 1980, when the agency had over 1,700 FTE, even though the nation’s
GDP has increased six-fold since that time.
The FTC’s enacted budget for FY2024 of $425.7 million represented a 1% reduction
from the previous year. The effect of this reduction, alongside a 5.2% pay raise and higher noncompensation costs resulting from inflation, means the FTC has significantly less resources this
year to support its mission. We are deeply committed to long-term fiscal responsibility, which
means we are making difficult choices now to ensure the agency maintains a strong position in
the years to come.
As a result of the FY2024 funding level, the FTC, through reduced hiring actions and
attrition, will decrease its current workforce as well as a variety of nonpayroll expenditures. We
are also exploring ways to reduce facility costs, although savings from these efforts will likely
not be realized before the end of FY2025.
The House of Representatives’ proposed FY2025 budget of $388.7 million would be
devastating to the FTC, and will necessitate both furloughs and likely a reduction in force. The
House funding level would continue to reduce FTC capabilities, including our Consumer
Complaint database (Sentinel), and impact our ability to retain personnel who are vital to both
our Consumer Protection and Competition missions.
III.

CONSUMER PROTECTION MISSION

As the nation’s primary consumer protection agency, the FTC has a broad mandate to
protect the public from unfair or deceptive practices throughout the economy. Among other
issues, the FTC works to protect privacy and data security; fight fraud, junk fees, and related
harms affecting consumers; combat opioid recovery fraud and other health fraud; stand up for all
consumers, including older adults, servicemembers, and historically underserved communities;
tackle dark patterns and subscription traps; and ensure that domestic manufacturers, independent
repairers, and other small businesses have a chance to compete fairly.

provided in the FY 2023 Agency Financial Report as $3.6 billion of consumer savings and $17 per $1 spent. Fed.
Trade Comm’n, Fiscal Year 2023 Agency Financial Report 44 (2023),
https://www.ftc.gov/system/files/ftc gov/pdf/508FY2023FTCAgencyFinancialReport11292023.pdf.
3
Of the 1,349 employees on board, 22 are summer interns.

3

A.

Safeguarding Consumer Privacy and Strengthening Data Security

The FTC is taking bold steps to establish substantive protections for consumers’
personal data, moving beyond the flawed “notice and choice” privacy framework that leads to
consumers being constantly barraged with requests to collect and use their personal
information. We are particularly focused on sensitive data, children and teens, data security,
and market-wide initiatives to strengthen privacy and data security.
1.

Protecting Consumers’ Sensitive Data

At the FTC, we are working to secure real limits on the handling of people’s data,
particularly when it comes to sensitive information, including health, biometric, Internet
browsing, and location information.
First, the FTC has now brought half a dozen groundbreaking actions to protect consumers
as they use new technology to access health care and to bar consumer-facing health providers
from sharing consumers’ sensitive health data for advertising purposes. In GoodRx (prescription
drug discount provider), 4 BetterHelp (online counseling service), 5 Premom (period-tracking
app), 6 Cerebral (online mental health provider), 7 and Monument (online alcohol treatment
service), 8 the Commission alleged that companies broke their privacy promises by disclosing
users’ personal health information to advertising platforms such as Facebook and Google without
consent. The settlements in these actions included important first-time provisions banning the
transfer of data to third parties for advertising purposes, as well as other strong injunctive
provisions, including requirements for consent for certain information sharing, data retention
limitations, and deletion requirements. The GoodRx and Premom settlements included civil
penalties resulting from the Commission’s first enforcements of the Health Breach Notification
Rule. The BetterHelp order includes $7.8 million in monetary relief that will go back to
consumers as partial refunds, another first in a health privacy case. 9 Finally, in May, the
Press Release, Fed. Trade Comm’n, FTC Enforcement Action to Bar GoodRx from Sharing Consumers’ Sensitive
Health Info for Advertising (Feb. 1, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/02/ftcenforcement-action-bar-goodrx-sharing-consumers-sensitive-health-info-advertising.
5
Press Release, Fed. Trade Comm’n, FTC to Ban BetterHelp from Revealing Consumers’ Data, Including Sensitive
Mental Health Information, to Facebook and Others for Targeted Advertising (Mar. 2, 2023),
https://www ftc.gov/news-events/news/press-releases/2023/03/ftc-ban-betterhelp-revealing-consumers-dataincluding-sensitive-mental-health-information-facebook.
6
Order, United States v. Easy Healthcare Corp., No. 23-cv-03107 (N.D. Ill. 2023), available at
https://www.ftc.gov/system/files/ftc gov/pdf/2023.06.22 easy healthcare signed order 2023.pdf.
7
Proposed Order, United States v. Cerebral, Inc., No. 1:24-cv-21376 (S.D. Fla. Apr. 15, 2024), available at
https://www ftc.gov/system/files/ftc gov/pdf/cerebral joint stipulation order permanent injunction.pdf.
8
Proposed Order, United States v. Monument, No. 12:24-cv-01034 (D.D.C. Apr. 11, 2024), available at
https://www.ftc.gov/system/files/ftc gov/pdf/MonumentOrderFiled.pdf; see also Press Release, Fed. Trade
Comm’n, Alcohol Addiction Treatment Firm Will Be Banned from Disclosing Health Data for Advertising to Settle
FTC Charges That It Shared Data without Consent, available at https://www.ftc.gov/news-events/news/pressreleases/2024/04/alcohol-addiction-treatment-firm-will-be-banned-disclosing-health-data-advertising-settle-ftc (Apr.
11, 2024).
9
Press Release, Fed. Trade Comm’n, BetterHelp Customers Will Begin Receiving Notices about Refunds Related to
a 2023 Privacy Settlement with FTC, available at https://www.ftc.gov/news-events/news/pressreleases/2024/05/betterhelp-customers-will-begin-receiving-notices-about-refunds-related-2023-privacy-settlementftc (May 6, 2024).
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Commission finalized amendments to its Health Breach Notification Rule. The amendments
underscore that health apps and similar technologies are covered by the rule and that companies
must notify consumers and the FTC when breaches occur, which include unauthorized
disclosures of health information. 10
Second, the FTC is taking action when biometric technologies, like facial recognition,
harm consumers. In its case against Rite Aid, the FTC alleged the company deployed its facial
recognition technology without reasonable safeguards, and falsely tagged consumers,
particularly women and people of color, as shoplifters . The Commission secured a five-year ban
on Rite Aid’s use of facial recognition technology and other automated biometric systems for
security or surveillance purposes. 11
Third, the FTC is protecting consumers’ sensitive browsing data. The Commission
brought a recent case against browsing software company Avast for collecting and selling
consumers’ browsing information, which can reveal where consumers live and work, the health
care they seek, their political and religious affiliations, and other online interests and activities.
The order in this matter requires Avast to delete and not sell the web browsing information it
collected without consumers’ affirmative express consent, as well as any products or
algorithms derived from that data. 12
Finally, the FTC has followed through on its promise to ensure that geolocation data
that reveals sensitive information is not indiscriminately sold to the highest bidder. The
Commission is engaged in ongoing litigation against Kochava, Inc., alleging that the data
broker compiled massive amounts of consumers’ geolocation data and then sold it to customers
in a format that makes it easy to track consumers’ visits to sensitive locations, such as doctors’
offices, houses of worship, and temporary shelters for domestic violence survivors. 13 And,
earlier this year, the Commission secured settlements with location data aggregators, X-Mode
Social and InMarket Media, to resolve allegations that these companies collected and sold
precise geolocation information about consumers. 14 Both settlement orders contained
Business Blog, Fed. Trade Comm’n, Updated FTC Health Breach Notification Rule puts new provisions in place
to protect users of health apps and devices (Apr. 26, 2024), Updated FTC Health Breach Notification Rule puts new
provisions in place to protect users of health apps and devices | Federal Trade Commission.
11
Press Release, Fed. Trade Comm’n, Rite Aid Banned from Using AI Facial Recognition After FTC Says Retailer
Deployed Technology without Reasonable Safeguards (Dec. 19, 2023), https://www.ftc.gov/newsevents/news/press-releases/2023/12/rite-aid-banned-using-ai-facial-recognition-after-ftc-says-retailer-deployedtechnology-without.
12
Press Release, Fed. Trade Comm’n, FTC Order Will Ban Avast from Selling Browsing Data for Advertising
Purposes, Require It to Pay $16.5 Million Over Charges the Firm Sold Browsing Data After Claiming Its Products
Would Block Online Tracking (Feb. 22, 2024), https://www ftc.gov/news-events/news/press-releases/2024/02/ftcorder-will-ban-avast-selling-browsing-data-advertising-purposes-require-it-pay-165-million-over.
13
Press Release, Fed. Trade Comm’n, FTC Sues Kochava for Selling Data that Tracks People at Reproductive
Health Clinics, Places of Worship, and Other Sensitive Locations (Aug. 29, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/08/ftc-sues-kochava-selling-data-tracks-people-reproductive-health-clinicsplaces- worship-other.
14
Press Release, Fed. Trade Comm’n, FTC Finalizes Order with X-Mode and Successor Outlogic Prohibiting it
from Sharing or Selling Sensitive Location Data (Apr. 12, 2024), https://www.ftc.gov/news-events/news/pressreleases/2024/04/ftc-finalizes-order-x-mode-successor-outlogic-prohibiting-it-sharing-or-selling-sensitive-location;
Press Release, Fed. Trade Comm’n, FTC Order Will Ban InMarket from Selling Precise Consumer Location Data
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groundbreaking provisions protecting consumers from unwanted surveillance, including bans
on the use and disclosure of precise geolocation data.
2.

Protecting Children and Teens

Children must be able to play and learn online without being endlessly tracked and
manipulated by companies looking to hoard and monetize their personal data. Because online
services can pose unique risks to children and teens, the FTC is taking an expansive and
rigorous look at how to protect minors from digital harms, both through the Children’s Online
Privacy Protection Act Rule (“COPPA”), 15 which protects children under 13, as well as
through Section 5 of the FTC Act. In December, the FTC proposed changes to COPPA for the
first time in over a decade. The changes would place new restrictions on the use and disclosure
of children’s personal information, including requiring opt-in parental consent for behavioral
advertising, and would further limit the ability of companies to condition access to services on
monetizing children’s data. The proposal aims to shift the burden from parents to providers to
ensure that digital services are safe and secure for children. 16 Staff is currently reviewing the
comments received from stakeholders on the proposed changes.
In the meantime, the Commission continues to use our existing authorities to protect
children and teens. For example, we recently referred to the Department of Justice a complaint
against TikTok and its parent company, ByteDance, after investigating violations of COPPA
and the FTC Act. 17
We brought a law enforcement action against Epic Games, Inc. (“Epic”)—creator of
the popular video game “Fortnite”—alleging that Epic violated COPPA 18 and engaged in an
unfair practice by employing default settings that connected children and teens via voice and
text chat to strangers, exposing them to harm. This action ultimately resulted in a federal court
order securing strong and novel relief, requiring Epic to adopt strong default privacy settings
for children and teens, implement a privacy program subject to outside assessments, and pay a
$275 million civil penalty, the largest ever under COPPA.
We are also being forward-looking to prevent companies from using children’s data to
train AI models without parental consent. In the Amazon Alexa matter, the FTC alleged that
Amazon violated COPPA and the FTC Act by indefinitely retaining children’s voice
recordings, which it used to train its speech recognition algorithm. The FTC also alleged that
(Jan. 18, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-order-will-ban-inmarket-sellingprecise-consumer-location-data.
15
16 C.F.R. § 312.
16
Press Release, Fed. Trade Comm’n, Press Release, FTC Proposes Strengthening Children’s Privacy Rule to
Further Limit Companies’ Ability to Monetize Children’s Data (Dec. 20, 2023), https://www.ftc.gov/newsevents/news/press-releases/2023/12/ftc-proposes-strengthening-childrens-privacy-rule-further-limit-companiesability-monetize-childrens.
17
Statement of the Federal Trade Commission In the Matter of Bytedance/Musical.ly (June 18, 2024),
https://www ftc.gov/system/files/ftc gov/pdf/bytedance-musical-commission-statement.pdf.
18
Press Release, Fed. Trade Comm’n, Fortnite Video Game Maker Epic Games to Pay More Than Half a Billion
Dollars Over FTC Allegations of Privacy Violations and Unwanted Charges (Dec. 19, 2022),
https://www ftc.gov/news-events/news/press-releases/2022/12/fortnite-video-game-maker-epic-games-pay-morehalf-billion-dollars-over-ftc-allegations.

6

Amazon failed to honor users’, including parents’, requests to delete voice and geolocation
data, which remained available to Amazon to use for machine learning. Under the FTC’s
settlement with Amazon, the company is required to delete inactive accounts and certain voice
recordings and geolocation information from children and will be prohibited from using such
data to train its algorithms. 19
The Commission is also committed to preventing data abuses around educational
technology services and issued a Policy Statement in 2022 making clear that we would use our
full set of authorities to hold firms accountable. 20 Following the Policy Statement, we have
obtained settlements under COPPA and Section 5 that lay down the rules of the road.
Educational technology company Edmodo entered a federal court order to resolve FTC
allegations that Edmodo violated COPPA by failing to obtain verifiable parental consent before
collecting children’s personal information, and that it unlawfully outsourced its COPPA
compliance responsibilities to schools. Our order against Edmodo banned the company from
requiring children to disclose more personal data than is reasonably necessary to participate in
online learning. 21
The FTC also brought a data security enforcement action against online learning
platform Chegg, Inc., whose customers are high school students. We alleged that Chegg
collected sensitive information about its users and employees but failed to properly protect this
data, leading to several data breaches that exposed the personal data of millions of customers.
Now under FTC order, Chegg is required to implement strong data security measures,
including documenting and following a data collection and retention schedule, providing
multifactor authentication or an equivalent authentication method to its customers and
employees, and providing customers with access and deletion rights for the information that
Chegg collects about them. 22
3.

Strengthening Data Security

The best way for firms to protect consumers’ data is to not collect it in the first place. In
the last three years, we have secured 17 data security and privacy orders with mandated

Press Release, Fed. Trade Comm’n, FTC and DOJ Charge Amazon with Violating Children’s Privacy Law by
Keeping Kids’ Alexa Voice Recordings Forever and Undermining Parents’ Deletion Requests (May 31, 2023),
https://www.ftc.gov/news-events/news/press-releases/2023/05/ftc-doj-charge-amazon-violating-childrens-privacylaw-keeping-kids-alexa-voice-recordings-forever.
20
Fed. Trade Comm’n, Policy Statement of the Federal Trade Commission on Education Technology and the
Children’s Online Privacy Protection Act (May 19, 2022),
https://www.ftc.gov/system/files/ftc gov/pdf/Policy%20Statement%20of%20the%20Federal%20Trade%20Commis
sion%20on%20Education%20Technology.pdf.
21
Press Release, Fed. Trade Comm’n, FTC Says Ed Tech Provider Edmodo Unlawfully Used Children’s Personal
Information for Advertising and Outsourced Compliance to School Districts (May 22, 2023),
https://www.ftc.gov/news-events/news/press-releases/2023/05/ftc-says-ed-tech-provider-edmodo-unlawfully-usedchildrens-personal-information-advertising.
22
Press Release, Fed. Trade Comm’n, FTC Brings Action Against Ed Tech Provider Chegg for Careless Security
that Exposed Personal Data of Millions of Customers (Oct. 31, 2022), https://www ftc.gov/news-events/news/pressreleases/2022/10/ftc-brings-action-against-ed-tech-provider-chegg-careless-security-exposed-personal-data-millions.
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restrictions on what data firms can collect and retain. 23 For example, our order against
Blackbaud, a provider of data services and financial, fundraising, and administrative software
services, requires the company to delete data that it no longer needs and put in place a data
retention schedule that would detail why it maintains personal data and when it will delete such
information. 24 The Commission’s orders against the online alcohol marketplace Drizly, LLC 25
and the online merchandise platform CafePress also require the companies to minimize the data
they collect, store, and retain. 26
The Commission has also obtained remedies that require companies to delete data they
unlawfully collected or used, and to delete the algorithms they developed with that data. For
example, in Rite Aid, we required the company to delete any images or photos it collected for
use in Rite Aid’s facial recognition system as well as any algorithms or other products that were
developed using those images and photos. 27 And, in our final order with Avast, the Commission

These include proposed or final orders in actions the FTC has taken against X-Mode Social (Apr. 11, 2024),
https://www ftc.gov/legal-library/browse/cases-proceedings/2123038-x-mode-social-inc; RiteAid (Mar. 8, 2024),
https://www.ftc.gov/legal-library/browse/cases-proceedings/2023190-rite-aid-corporation-ftc-v; Global Tel*Link
(Feb. 23, 2024), https://www.ftc.gov/legal-library/browse/cases-proceedings/2123012-global-tel-link-corporation;
Avast Limited (Feb. 22, 2024), https://www.ftc.gov/legal-library/browse/cases-proceedings/2023033-avast;
Blackbaud (Feb. 14, 2024), https://www.ftc.gov/legal-library/browse/cases-proceedings/2023181-blackbaud-inc.;
InMarket Media (Jan. 18, 2024), https://www.ftc.gov/legal-library/browse/cases-proceedings/2023088-inmarketmedia-llc; Epic Games (Jan. 10, 2024), https://www ftc.gov/legal-library/browse/cases-proceedings/1923203-epicgames-matter; Edmodo (Aug. 28, 2023), https://www.ftc.gov/legal-library/browse/cases-proceedings/202-3129edmodo-llc-us-v; Amazon Alexa (July 21, 2023), https://www.ftc.gov/legal-library/browse/cases-proceedings/1923128-amazoncom-alexa-us-v; BetterHelp (July 14, 2023), https://www ftc.gov/legal-library/browse/casesproceedings/2023169-betterhelp-inc-matter; Easy Healthcare (June 26, 2023), https://www ftc.gov/legallibrary/browse/cases-proceedings/202-3186-easy-healthcare-corporation-us-v; Vitagene (June 16, 2023),
https://www.ftc.gov/news-events/news/press-releases/2023/06/ftc-says-genetic-testing-company-1health-failedprotect-privacy-security-dna-data-unfairly-changed; GoodRx Holdings (Feb. 17. 2023), https://www.ftc.gov/legallibrary/browse/cases-proceedings/2023090-goodrx-holdings-inc; Chegg (Jan. 26, 2023), https://www ftc.gov/legallibrary/browse/cases-proceedings/chegg; Drizly (Jan. 10, 2023), https://www.ftc.gov/legal-library/browse/casesproceedings/2023185-drizly-llc-matter; CafePress (Jan. 10, 2023), https://www.ftc.gov/legal-library/browse/casesproceedings/1923209-cafepress-matter; and Kurbo (f/k/a Weight Watchers) (Mar. 4, 2022),
https://www.ftc.gov/legal-library/browse/cases-proceedings/1923228-weight-watchersww.
24
Press Release, Fed. Trade Comm’n, FTC Finalizes Order with Blackbaud Related to Allegations the Firm‘s
Security Failures Led to Data Breach (May 20, 2024), https://www.ftc.gov/news-events/news/pressreleases/2024/05/ftc-finalizes-order-blackbaud-related-allegations-firms-security-failures-led-data-breach.
25
Press Release, Fed. Trade Comm’n, FTC Takes Action Against Drizly and its CEO James Cory Rellas for
Security Failures that Exposed Data of 2.5 Million Consumers (Oct. 24, 2022), https://www ftc.gov/newsevents/news/press-releases/2022/10/ftc-takes-action-against-drizly-its-ceo-james-cory-rellas-security-failuresexposed-data-25-million. The Drizly settlement also names the CEO, and thus imposes separate obligations on him
which will follow him beyond Drizly, underscoring the need for C-Suite attention to data security obligations.
26
Press Release, Fed. Trade Comm’n, FTC Takes Action Against CafePress for Data Breach Cover Up (Mar. 15,
2022), www ftc.gov/news-events/news/press-releases/2022/03/ftc-takes-action-against-cafepress-data-breach-cover.
27
Press Release, Fed. Trade Comm’n, Rite Aid Banned from Using AI Facial Recognition After FTC Says Retailer
Deployed Technology without Reasonable Safeguards (Dec. 19, 2023), https://www ftc.gov/newsevents/news/press-releases/2023/12/rite-aid-banned-using-ai-facial-recognition-after-ftc-says-retailer-deployedtechnology-without.
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required the company to delete any models, algorithms, or software developed from data
unlawfully collected. 28
4.

Developing Market-Wide Initiatives to Protect Consumers’ Data

In August 2022, the Commission issued an advance notice of proposed rulemaking on
commercial surveillance and lax data security, which sought comment on the widespread
collection of consumers’ personal information (such as browsing data, precise geolocation data,
and health-related data), ongoing concerns around the security of consumer data, harm to kids
and teens, and concerns around automated decision-making. 29 The Commission is reviewing
the more than 11,000 comments we received and considering next steps. The Commission also
has significantly strengthened the Safeguards Rule, amending the rule in 2021 to include more
detailed requirements for financial institutions’ information security programs, and again in
2023 to require financial institutions to notify the FTC of breaches of unencrypted data of 500
or more consumers. 30 The breach notification requirement went into effect on May 13, 2024.
And we continue to review other rules, including COPPA, to assess whether changes are
necessary to better protect consumers’ data.
5.

Confronting the Challenges of Artificial Intelligence

The rapid emergence of new tools powered by artificial intelligence (“AI”) presents
opportunities for the public and our economy. But it also poses significant risks, and the
Commission is working to address these risks in a number of ways while also promoting
innovation that affirms America’s leadership around this emerging technology.
First, the Commission is using its existing legal authorities to take action against illegal
practices involving AI. 31 For instance, the FTC alleged that Amazon and Ring used highly
private data—voice recordings collected by Amazon’s Alexa voice assistant 32 and videos
Press Release, Fed. Trade Comm’n, FTC Order Will Ban Avast from Selling Browsing Data for Advertising
Purposes, Require It to Pay $16.5 Million Over Charges the Firm Sold Browsing Data After Claiming Its Products
Would Block Online Tracking
(Feb. 22, 2024), https://www ftc.gov/news-events/news/press-releases/2024/02/ftc-order-will-ban-avast-sellingbrowsing-data-advertising-purposes-require-it-pay-165-million-over.
29
Press Release, Fed. Trade Comm’n, FTC Explores Rules Cracking Down on Commercial Surveillance and Lax
Data Security Practices (Aug. 11, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/08/ftcexplores- rules-cracking-down-commercial-surveillance-lax-data-security-practices.
30
Press Release, Fed. Trade Comm’n, FTC Strengthens Security Safeguards for Consumer Financial Information
Following Widespread Data Breaches (Oct. 27, 2021), https://www ftc.gov/news-events/news/pressreleases/2021/10/ftc-strengthens-security-safeguards-consumer-financial-information-following-widespread-data;
Press Release, Fed. Trade Comm‘n, FTC Amends Safeguards Rule to Require Non-Banking Financial Institutions to
Report Data Security Breaches (Oct. 27, 2023), https://www ftc.gov/news-events/news/press-releases/2023/10/ftcamends-safeguards-rule-require-non-banking-financial-institutions-report-data-security-breaches. 27, 2023 Press 7,
303)Press Release, Fed. Trade Comm’n, Trade Comm’n, FTC Amends Safeguards Rule to Require Non-Banking
Financial Institutions to Report Data Security Breaches | Federal Trade Commission (Oct. 2023).
31
Press Release, Fed. Trade Comm’n, FTC Chair Khan and Officials from DOJ, CFPB and EEOC Release Joint
Statement on AI (April 15, 2023), https://www ftc.gov/news-events/news/press-releases/2023/04/ftc-chair-khanofficials-doj-cfpb-eeoc-release-joint-statement-ai.
32
Press Release, FTC and DOJ Charge Amazon with Violating Children’s Privacy Law by Keeping Kids’ Alexa
Voice Recordings Forever and Undermining Parents’ Deletion Requests (May 31, 2023), https://www ftc.gov/news28

9

collected by Ring’s internet-connected home security cameras 33—to train their algorithms while
violating customers’ privacy. 34 The Alexa matter, in particular, underscored that COPPA’s
prohibition on the indefinite retention of children’s data and similar legal rules are not
superseded by claims from businesses that data must be indefinitely retained to improve machine
learning algorithms. Claims about AI were the focus of allegations against two companies—
Automators AI 35 and Wealthpress 36—that the FTC alleged engaged in investment scams and
touted the use of AI to enhance investment success. And, in Rite Aid, the Commission charged
the company with failing to implement reasonable safeguards when the company deployed AI
facial recognition technology that falsely tagged consumers, especially women and people of
color, as shoplifters or other bad actors. 37
Second, the Commission is using every tool to fight AI-related fraud. The Commission
has issued a rule outlawing government and business impersonation scams—a type of fraud that
generative AI can turbocharge, and which hurts not only consumers, including older Americans,
but also small businesses. 38 The Commission has also embarked on a supplemental rulemaking
to extend this ban to the impersonation of individuals. 39
The Commission has also tapped American ingenuity to help fight back against fraud. On
April 8, it announced the four winners of its groundbreaking Voice Cloning Challenge. Each
winner’s submission proposed a novel approach to detect and prevent voice cloning scams,
which fraudsters often deploy to target older Americans. 40 The Commission has also made clear

events/news/press-releases/2023/05/ftc-doj-charge-amazon-violating-childrens-privacy-law-keeping-kids-alexavoice-recordings-forever.
33
Press Release, FTC Says Ring Employees Illegally Surveilled Customers, Failed to Stop Hackers from Taking
Control of Users' Cameras (May 31, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/05/ftc-saysring-employees-illegally-surveilled-customers-failed-stop-hackers-taking-control-users.
34
Press Release, FTC and DOJ Charge Amazon with Violating Children’s Privacy Law by
Keeping Kids’ Alexa Voice Recordings Forever and Undermining Parents’ Deletion Requests (May 31, 2023),
https://www.ftc.gov/news-events/news/press-releases/2023/05/ftc-doj-charge-amazon-violating-childrensprivacylaw-keeping-kids-alexa-voice-recordings-forever; Press Release, FTC Says Ring Employees Illegally
Surveilled Customers, Failed to Stop Hackers from Taking Control of Users’ Cameras (May 31, 2023),
https://www.ftc.gov/news-events/news/press-releases/2023/05/ftc-says-ring-employees-illegallysurveilledcustomers-failed-stop-hackers-taking-control-users.
35
Press Release, FTC Action Leads to Ban for Owners of Automators AI E-Commerce Money-Making Scheme
(Feb. 27, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-ownersautomators-ai-e-commerce-money-making-scheme.
36
Press Release, FTC Suit Requires Investment Advice Company WealthPress to Pay $1.7 Million for Deceiving
Consumers (Jan. 13, 2023), https://www ftc.gov/news-events/news/press-releases/2023/01/ftcsuit-requiresinvestment-advice-company-wealthpress-pay-17-million-deceiving-consumers.
37
Press Release, Rite Aid Banned from Using AI Facial Recognition After FTC Says Retailer Deployed Technology
without Reasonable Safeguards (Dec. 19, 2023), https://www ftc.gov/news-events/news/press-releases/2023/12/riteaid-banned-using-ai-facial-recognition-after-ftc-says-retailer-deployed-technology-without.
38
Press Release, Fed. Trade Comm’n, FTC Announces Impersonation Rule Goes into Effect Today (Apr. 1, 2024),
https://www ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-impersonation-rule-goes-effect-today.
39
Id.
40
Press Release, FTC Announces Winners of Voice Cloning Challenge (Apr. 8, 2024), https://www.ftc.gov/newsevents/news/press-releases/2024/04/ftc-announces-winners-voice-cloning-challenge.

10

that AI robocalls are not exempt from the Telemarketing Sales Rule. 41 And the Commission
proposed a rule cracking down on firms that generate fake reviews—an online scourge that AI
threatens to exacerbate. 42
Third, the Commission is helping guide consumers and businesses as they navigate the
potential perils of AI. The Commission has issued award-winning consumer and business
guidance around various AI-related issues. 43 The Commission also convened a Technology
Summit focused on AI 44 and a roundtable concerning the impact of generative AI on creative
fields. 45 Finally, the Commission wants to ensure that biometric information—a particularly
sensitive category of health data—is being protected, and in 2023, issued a policy statement
identifying factors the FTC will consider in determining whether business’ use of biometric
information or biometric information technologies, including those powered by AI and machine
learning, could be unfair in violation of the FTC Act. 46
Lastly, the FTC has focused on investing in technical skills to ensure we can keep pace
with the technologies that we oversee. Last year we launched a new Office of Technology,
which has hired technologists spanning a variety of fields—including data security, artificial
intelligence, ad tech, and user design. Within a short period these technologists have embedded
Press Release, FTC Implements New Protections for Businesses Against Telemarketing Fraud and Affirms
Protections Against AI-enabled Scam Calls, (Mar. 7, 2024), https://www ftc.gov/news-events/news/pressreleases/2024/03/ftc-implements-new-protections-businesses-against-telemarketing-fraud-affirms-protectionsagainst-ai.
42
Press Release, Federal Trade Commission Announces Proposed Rule Banning Fake Reviews and Testimonials
(Jun. 30, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/06/federal-trade-commissionannounces-proposed-rule-banning-fake-reviews-testimonials.
43
See esley Fair, For Business Opportunity Sellers, FTC says “AI” Stands for “Allegedly Inaccurate”, FTC
Business Blog (Aug. 22, 2023), https://www.ftc.gov/business-guidance/blog/2023/08/business-opportunity-sellersftc-says-ai-stands-allegedly-inaccurate; Michael Atleson, Succor Borne Every Minute, FTC Business Blog (June 11,
2024), https://www ftc.gov/business-guidance/blog/2024/06/succor-borne-every-minute; Michael Atleson, Can’t
Lose What You Never Had: Claims About Digital Ownership and Creation in the Age of Generative AI, FTC
Business Blog (Aug. 16, 2023), https://www.ftc.gov/business-guidance/blog/2023/08/cant-lose-what-you-never-hadclaims-about-digital-ownership-creation-age-generative-ai; Michael Atleson, Watching the Detectives: Suspicious
Marketing Claims for Tools That Spot AI-Generated Content, FTC Business Blog (July 6, 2023),
https://www.ftc.gov/business-guidance/blog/2023/07/watching-detectives-suspicious-marketing-claims-tools-spotai-generated-content; Elisa Jillson, Hey, Alexa! What Are You Doing With My Data?, FTC Business Blog (June 13,
2023), https://www ftc.gov/business-guidance/blog/2023/06/hey-alexa-what-are-you-doing-my-data; Michael
Atleson, The Luring Test: AI and the Engineering of Consumer Trust, FTC Business Blog (May 1, 2023),
https://www.ftc.gov/business-guidance/blog/2023/05/luring-test-ai-engineering-consumer-trust; Michael Atleson,
Keep Your AI Claims in Check, FTC Business Blog (Feb. 27, 2023), https://www.ftc.gov/businessguidance/blog/2023/02/keep-your-ai-claims-check; Elisa Jillson, Aiming for Truth, Fairness, and Equity in Your
Company’s Use of AI, FTC Business Blog (Apr. 19, 2021), https://www.ftc.gov/businessguidance/blog/2021/04/aiming-truth-fairness-equity-your-companys-use-ai.
44
Press Release, FTC Hosts Virtual Tech Summit on January 25 Focused on Artificial Intelligence (Jan. 24, 2024),
https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-hosts-virtual-tech-summit-january-25-focusedartificial-intelligence.
45
Press Release, FTC to Host Roundtable Discussion on October 4 on Artificial Intelligence and the Creative Fields
(Oct. 3, 2023), https://www ftc.gov/news-events/news/press-releases/2023/10/ftc-host-roundtable-discussionoctober-4-artificial-intelligence-creative-fields.
46
Policy Statement of the Federal Trade Commission on Biometric Information and Section 5 of the Federal Trade
Commission Act, https://www.ftc.gov/news-events/news/press-releases/2023/05/ftc-warns-about-misuses-biometricinformation-harm-consumers.
41

11

across investigative teams and contributed their expertise to deepen the Commission’s
understanding of new technologies.
B.

Protecting Every Community from Fraud and Deceptive Business Practices

The FTC continues to focus on rooting out fraud and deceptive business practices. A top
priority has been crafting enforcement strategies designed to promote deterrence, target root
causes, and achieve greater protections for the American public.
1.

Reducing the Scourge of Unwanted Calls

In FY2023, the FTC received more than 2 million complaints about unwanted calls,
including 1.1 million reports about robocalls. 47 The Commission uses every tool at its disposal
to combat these calls. Over the years, the FTC has filed 170 enforcement actions against 563
companies and 446 individuals alleged to be responsible for placing billions of unwanted
telemarketing calls to consumers. We have also collected nearly $400 million in civil
penalties and equitable monetary relief from these violators. In cases where perpetrators ran
telemarketing scams, the FTC has obtained court orders shutting down these businesses and
securing monetary relief so monies could be returned to consumers. 48
The FTC is also disrupting foreign-based scammers that bring illegal robocalls into
the United States. The Commission continues to send warning letters as part of Project Point of
No Entry (“PoNE”). PoNE targets “point of entry” or “gateway” Voice over Internet Protocol
(“VoIP”) service providers. 49 In collaboration with the Federal Communications
Commission, the Industry Traceback Group, and state attorneys general, the FTC identifies
point of entry VoIP service providers that are routing or transmitting illegal robocall traffic.
The FTC then demands that they stop, warns that their conduct may violate the Telemarketing
Sales Rule (“TSR”), monitors their pursuit of recalcitrant providers, and conducts law
enforcement investigations and files lawsuits when appropriate. Through PoNE, the FTC has
sent 31 warning letters to providers that were responsible for more than 450 robocall
campaigns. Twenty-two of the 24 providers targeted in earlier rounds significantly curbed or
altogether stopped the flow of illegal calls.
On July 18, 2023, the FTC announced Operation Stop Scam Calls, the largest crackdown
on illegal telemarking in our history. The Operation consisted of more than 180 actions targeting
those responsible for billions of illegal calls to U.S. consumers. 50 More than 100 state and federal
FTC, Do Not Call Registry Data Book 2023: Complaint Figures for FY 2023 (2022),
https://www.ftc.gov/system/files/ftc gov/pdf/Do-Not-Call-Data-Book-2023.pdf.
48
Temporary Restraining Order, FTC v. Smith, No. 2:23-cv-04848 (E.D. Pa. Dec. 8, 2023),
https://www.ftc.gov/system/files/ftc gov/pdf/Weblio-TRO.pdf (freezing the defendants’ assets and prohibiting their
deceptive practices); Order, FTC v. Green Equitable Solutions, No. 2:22-cv-6499 (C.D. Cal. Feb 2, 2024) (banning
defendants from telemarketing and ordering them to pay a $15,891,536 monetary judgment).
49
Press Release, Fed Trade Comm’n, FTC Ramps Up Fight to Close the Door on Illegal Robocalls Originating from
Overseas Scammers and Imposters (Apr. 11, 2023), https://www ftc.gov/news-events/news/pressreleases/2023/04/ftc-ramps-fight-close-door-illegal-robocalls-originating-overseas-scammers-imposters.
50
Press Release, Fed. Trade Comm’n, FTC, Law Enforcers Nationwide Announce Enforcement Sweep to Stem the
Tide of Illegal Telemarketing Calls to U.S. Consumers (July 18, 2023), https://www ftc.gov/news47

12

law enforcement partners participated in the sweep. The FTC’s cases targeted robocalls at every
level, including telemarketers that make robocalls, VoIP providers that provide telemarketers
access to telephone networks, and the lead generators that obtain and sell the leads robocallers
use to call consumers. In March 2024, a federal district court judge granted one of the VoIP
providers’ motion to dismiss, finding that the provider was immune from liability under Section
230 of the Communications Decency Act, 47 U.S.C. § 230. 51
The FTC is determined to go after not only individual bad actors but also the platforms
that enable these practices on a massive scale. In March, the Commission announced an
amendment to the TSR that will protect businesses against telemarketing fraud and updates the
rule’s recordkeeping requirements in light of developments in technology and the marketplace.
The Commission also has an ongoing rulemaking that would apply the TSR’s protections to
inbound technical support calls. 52
Although robocalls remain a scourge, our strategy of targeting upstream facilitators of
illegal telemarketing is paying dividends for the American people. In recent months, the number
of complaints coming into the FTC around unwanted calls is down more than 60% from the
monthly complaint average in the first quarter of 2021.
2.

Combatting Junk Fees and Unwanted Charges

The FTC is taking bold action to make sure companies honestly compete on price,
rather than by cheating consumers with hidden, deceptive junk fees. Consumers can get hit
with junk fees at any stage of the purchase process, and companies may use digital dark
patterns and other tricks to hide or mask them. These fees both undercut honest businesses by
making it harder to compete on price and frustrate consumers by hitting them with unexpected
charges.
Just a few weeks ago, the FTC, in conjunction with DOJ, charged Adobe and two of its
executives with deceiving consumers by hiding early termination fees. 53 The FTC initiated two
new rulemakings to address this problematic conduct. In December 2023, the FTC announced
a final CARS Rule, which bans certain junk fees and bait-and-switch advertising tactics that
can plague consumers throughout the car-buying experience. The rule requires dealers to make
key disclosures to consumers, including providing a true “offering price” for a vehicle that is
the full price a consumer would pay, excluding only required government charges. The

events/news/press-releases/2023/07/ftc-law-enforcers-nationwide-announce-enforcement-sweep-stem-tide-illegaltelemarketing-calls-us.
51
Tentative Order, United States v. Stratics Networks Inc., No. 23-cv-0313 (S.D. Cal. March 6, 2024),
https://caselaw.findlaw.com/court/us-dis-crt-s-d-cal/115913551.html.
52
Final Rule 89 Fed. Reg. 26760 (Apr.16, 2024); Notice of Proposed Rulemaking, 89 Fed. Reg. 26798 (Apr. 16,
2024).
53
Fed. Trade Commn’n, Press Release, FTC Takes Action against Adobe and Executives for Hiding Fees,
Preventing Consumers from Easily Cancelling Software Subscriptions (June 17, 2024), available at
https://www ftc.gov/news-events/news/press-releases/2024/06/ftc-takes-action-against-adobe-executives-hidingfees-preventing-consumers-easily-cancelling.

13

Commission estimates that the rule will save car-buying consumers an estimated $3.4 billion
dollars and 72 million hours each year. 54
In October 2023, we announced a separate rulemaking to crack down on deceptive or
unfair junk fees across multiple industries. The proposal would prohibit companies from
advertising prices that do not include all mandatory fees and prevent companies from
misrepresenting the amount and purpose of fees and whether they are refundable. We are
reviewing and analyzing thousands of comments from the public on the proposal, and in April
2024, we held an informal hearing on the proposed rule to provide interested organizations an
opportunity to provide oral statements. 55
I am also concerned about junk fees and other unlawful conduct in the housing rental
market, and on June 7, 2024, held a listening session in Atlanta with housing advocates, legal
services providers, and renters to discuss trends and abuses. Participants provided insights and
shared their experiences with various junk fees, such as charging renters to make a payment for
“insurance” that in fact paid the landlord’s insurance. They described “bait and switch” tactics
in which the landlord lures renters with an advertised low rent but then revealing the true cost
after renters have paid a non-refundable application fee. They also reported circumvention of
state law protections, such as calling security deposits “liquidated damages” to avoid caps.
The Commission has proposed to amend the Negative Option Rule to more effectively
address deceptive or unfair practices around negative marketing, including perpetual
subscriptions, difficulty in cancellation, and failure to obtain consumers’ express, affirmative
consent. 56 The proposed rule amendment covers a broad range of recurring subscriptions to
ensure that sellers provide important information about these contracts up front, obtain
consumers’ express informed consent, and provide simple cancellation mechanisms to allow
consumers to easily cancel unwanted subscriptions.
3.

Combatting Fraud Targeting Older Americans

Protecting older consumers continues to be one of the FTC’s top priorities, which the
agency pursues through aggressive law enforcement actions, innovative education and outreach
campaigns, extensive research, and collaboration with partners and stakeholders.
The FTC has brought a number of actions against companies for allegedly engaging in
Press Release, Fed. Trade Comm’n, FTC Announces CARS Rule to Fight Scams in Vehicle Shopping (Dec. 12,
2023),https://www.ftc.gov/news-events/news/press-releases/2023/12/ftc-announces-cars-rule-fight-scams-vehicleshopping. The rule has been challenged in federal court, and the Commission has stayed the effective date of the rule
pending judicial review. Press Release, Fed. Trade Comm’n, FTC Pauses CARS Rule Effective Date (Jan. 18,
2024), https://www ftc.gov/news-events/news/press-releases/2024/01/ftc-pauses-cars-rule-effective-date.
55
Press Release, Fed. Trade Comm’n, FTC Proposes Rule to Ban Junk Fees (Oct. 11, 2023),
https://www ftc.gov/news-events/news/press-releases/2023/10/ftc-proposes-rule-ban-junk-fees; Press Release, Fed.
Trade Comm’n, FTC to Hold Virtual Informal Hearing on April 24, 2024 As Part of its Review of the Proposed
Rule Prohibiting Junk Fees (Mar. 21, 2024) https://www.ftc.gov/news-events/news/press-releases/2024/03/ftc-holdvirtual-informal-hearing-april-24-2024-part-its-review-proposed-rule-prohibiting-junk-fees.
56
Press Release, Fed. Trade Comm’n, Federal Trade Commission Proposes Rule Provision Making It Easier for
Consumers to ‘Click to Cancel’ Recurring Subscriptions and Memberships (Mar. 23, 2023),
https://www.ftc.gov/news-events/news/press-releases/2023/03/federal-trade-commission-proposes-rule-provisionmaking-it-easier-consumers-click-cancel-recurring.
54

14

illegal practices that disproportionately impact older adults, such as tech support scams, 57 sham
health plans, 58 and deceptive sweepstakes. 59 In addition, as with its work on unwanted calls, the
FTC is going after entities that allegedly facilitate scams (like the grandparent and lottery or
sweepstakes scams) at scale. 60 Reports to the FTC suggest that older adults lose more money to
investment scams than any other category of fraud. 61 The FTC has aggressively gone after
companies for making allegedly deceptive earnings claims, including actions against investment
advisors, 62 crypto and other bogus business scams, 63 and moneymaking schemes that capitalized
on false claims about using AI to boost earnings. 64
The agency’s education and outreach work complement this vigorous enforcement with
its most popular education campaign, Pass It On (“Pásalo” in Spanish). 65 Since its original
launch in 2014, more than 20 million Pass It On materials have been distributed nationwide in
English and Spanish. During 2022, the FTC released updated Pass It On content and promoted
it through a series of webinars presented to thousands of representatives from congressional
offices, aging services providers, and military support groups, among others. The FTC also
created the Senior Fraud Advisory Office, pursuant to the Seniors Fraud Prevention Act of
2022, to advise the Commission on strategies to protect older Americans.
The Commission coordinates with various stakeholders in its efforts to protect older
adults from scams. Pursuant to the Stop Senior Scams Act of 2022, the Commission formalized
its collaborations by establishing the Scams Against Older Adults Advisory Group. In April
2024, the Advisory Group issued guidance on effective consumer education and outreach, best
Press Release, Fed. Trade Comm’n, Tech Support Firms Will Pay $26 Million to Settle FTC Charges That They
Deceived Consumers Into Buying Repair Services (Mar. 14, 2024), https://www.ftc.gov/news-events/news/pressreleases/2024/03/tech-support-firms-will-pay-26-million-settle-ftc-charges-they-deceived-consumers-buying-repair.
58
Press Release, Fed. Trade Comm’n, FTC Obtains $195 Million Judgment, Permanent Ban on Telemarketing and
Selling Healthcare Products Against Simple Health Over Charges It Sold Sham Health Insurance (Feb. 9, 2024),
https://www ftc.gov/news-events/news/press-releases/2024/02/ftc-obtains-195-million-judgment-permanent-bantelemarketing-selling-healthcare-products-against.
59
Press Release, Fed. Trade Comm’n, FTC Action Leads to Sweepstakes Ban For Three Individuals Who Ran
Massive Scheme That Cost Consumers Millions (June 24, 2024), https://www ftc.gov/news-events/news/pressreleases/2024/06/ftc-action-leads-sweepstakes-ban-three-individuals-who-ran-massive-scheme-cost-consumersmillions; Press Release, Fed. Trade Comm’n, FTC Takes Action Against Publishers Clearing House for Misleading
Consumers About Sweepstakes Entries (June 27, 2023), https://www ftc.gov/news-events/news/pressreleases/2023/06/ftc-takes-action-against-publishers-clearing-house-misleading-consumers-about-sweepstakes-entries.
60
Complaint, FTC v. Walmart, Inc., No: 1:22-cv-03372 (N.D. Ill. June 28, 2022),
https://www ftc.gov/legal- library/browse/cases-proceedings/182-3012-walmart-ftc-v.
61
FTC, Protecting Older Consumers 2022-2023: A Report of the Fed. Trade Comm’n, at 26 (Oct. 2023), available
at https://www ftc.gov/system/files/ftc gov/pdf/p144400olderadultsreportoct2023.pdf (last visited Apr. 29, 2024).
62
Press Release, Fed. Trade Comm’n, FTC Sends $1.2 Million in Refunds to Consumers Harmed by Deceptive
Investment Claims (Apr. 9, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-sends-12million-refunds-consumers-harmed-deceptive-investment-claims.
63
Press Release, Fed. Trade Comm’n, FTC Sends $2.8 Million in Refunds to Consumers Harmed by DK
Automation’s Phony Online Business and Crypto Moneymaking Schemes (Mar. 28, 2024),
https://www ftc.gov/news-events/news/press-releases/2024/03/ftc-sends-28-million-refunds-consumers-harmed-dkautomations-phony-online-business-crypto.
64
Press Release, Fed. Trade Comm’n, FTC Action Leads to Ban for Owners of Automators AI E-Commerce
Money-Making Scheme (Feb. 27, 2024), https://www ftc.gov/news-events/news/press-releases/2024/02/ftc-actionleads-ban-owners-automators-ai-e-commerce-money-making-scheme.
65
See http://www ftc.gov/PassItOn and http://www.ftc.gov/Pasalo.
57

15

practices on training industry employees to spot and stop scams, and a report that highlights
existing research on effective scam prevention messaging and outlines where additional
research is necessary. 66 The Advisory Group made these resources publicly available to assist
industry and others to stop scams from impacting older adults.67 The Commission’s annual report
to Congress describes in detail our work for older adults. 68
4.

Protecting Servicemembers and Veterans

Combatting fraud aimed at servicemembers remains a top priority. In July 2022, in its
first case enforcing the Military Lending Act, 69 the FTC and a group of 18 states took action
against Harris Jewelry, a national jewelry retailer, to resolve allegations that the company
targeted military families with illegal financing and sales practices, ultimately requiring the
company to pay $10.9 million in refunds and engage in other affirmative assistance to its
victims. 70 The Commission’s efforts to protect military and veteran communities include a
vigorous, long-standing educational campaign and close coordination with servicemember and
veteran agencies. 71 This collaborative outreach is the cornerstone of the annual Military
Consumer Month, 72 which the FTC created and manages with its partners, including AARP’s
Veterans & Military Families Initiative. 73 The agency also participates in an ongoing working
group led by the Department of Veterans Affairs (“VA”) to inform veterans how to avoid scams
and recently joined the VSAFE, an initiative organized by the Executive Office of the President
and the VA to collaborate on outreach resources and activities to alert veterans and their
families of evolving scams. Additionally, the FTC’s CARS Rule will protect servicemembers,
who are frequent targets of vehicle scams, from dishonest practices, including
misrepresentations that dealers are affiliated with the military. 74

See FTC, Second Scams Against Older Adults Advisory Group Meeting (Apr. 2, 2024),
https://www.ftc.gov/news-events/news/press-releases/2024/03/ftc-convenes-advisory-group-fight-scams-against-olderadults.
67
FTC, Addressing Scams Affecting Older Adults, available at https://consumer ftc.gov/features/addressing-scamsaffecting-older-adults.
68
FTC, Protecting Older Consumers 2022-2023: A Report of the Fed. Trade Comm’n (Oct. 2023),
https://www ftc.gov/reports/protecting-older-consumers-2022-2023-report-federal-trade-commission.
69
10 U.S.C. § 987.
70
Press Release, Fed. Trade Comm’n, FTC and 18 States Sue to Stop Harris Jewelry from Cheating Military
Families with Illegal Financing and Sales Tactics (July 20, 2022), https://www ftc.gov/news-events/news/pressreleases/2022/07/ftc-18-states-sue-stop-harris-jewelry-cheating-military-families-illegal-financing-sales-tactics; see
also infra note 75 (discussing action against BurgerIM for deceiving veterans).
71
See, e.g., militaryconsumer.gov (launched by FTC and operated in cooperation with Department of Defense Office
of Financial Readiness (DoD FinRed) and the Consumer Financial Protection Bureau’s Office of Servicemember
Affairs (CFPB OSA)).
72
See Consumer Alert, Fed. Trade Comm’n, Time to help your buddies (June 30, 2023),
https://www militaryconsumer.gov/blog/time-help-your-buddies (military consumer alert celebrating Military
Consumer Month and launching a blog series tackling topics including romance scams, veteran benefits, identity
theft, and investment scams).
73
See AARP, Veterans and Military Families, https://www.aarp.org/volunteer/causes/veterans-military-families/.
74
Press Release, Fed. Trade Comm’n, FTC Announces CARS Rule to Fight Scams in Vehicle Shopping (Dec. 12,
2023), https://www ftc.gov/news-events/news/press-releases/2023/12/ftc-announces-cars-rule-fight-scams-vehicleshopping. The rule has been challenged in federal court, and the Commission has stayed the effective date of the rule
pending judicial review. Press Release, Fed. Trade Comm’n, FTC Pauses CARS Rule Effective Date (Jan. 18,
2024), https://www ftc.gov/news-events/news/press-releases/2024/01/ftc-pauses-cars-rule-effective-date.
66

16

5.

Preventing Financial Exploitation

The FTC brought 18 federal court actions in recent years against companies that
allegedly targeted financially insecure consumers and made false credit repair, mortgage, or
other debt relief promises, 75 as well as one action against a debt relief payment processor. 76 For
example, in February of this year, the FTC and the California Department of Financial
Protection and Innovation were awarded $19 million for consumer refunds and civil penalties
in their law enforcement action against several corporate and individual defendants doing
business as Home Matters USA, for operating what the federal district court found to be sham
mortgage relief services that misled consumers and cost them millions. 77 The court barred the
defendants from engaging in telemarketing and debt relief services and from deploying further
misrepresentations. The FTC also took action against two companies—Biz2Credit and
Womply—that made false promises to small businesses seeking to take part in the Paycheck
Protection Program (PPP), delaying and sometimes preventing them from obtaining funds they
needed to keep their businesses afloat during the COVID-19 pandemic, securing settlements of
$33 million in Biz2Credit and $26 million in Womply, which are the largest damages amounts
ever secured by the agency under Section 19 of the FTC Act. 78 In addition, the Commission is
Complaint, FTC v. Intercont’l Sols. LLC, No. 8:23-cv-01495-SB-JDE (C.D. Cal. 2023),
https://www.ftc.gov/system/files/ftc gov/pdf/Complaint 0.pdf; Complaint, FTC v. BCO Consulting Servs.,
Inc., No. 8:23-cv-00699-JWH-ADS (C.D. Cal. 2023), https://www ftc.gov/system/files/ftc gov/pdf/FTC-vBCO-Consulting-Services-Inc-et-al-23-cv-0699-Complaint.pdf; Complaint, FTC v. SL Fin. LLC, No. 8:23-cv00698-JWH-ADS (C.D. Cal. 2023), https://www.ftc.gov/system/files/ftc gov/pdf/01-Complaint-FTC-v-SLFinance-LLC.pdf; Complaint, FTC v. Michael Rando, No. 3:22-cv-00487-TJC-MCR (M.D. Fla. 2022),
https://www.ftc.gov/system/files/ftc gov/pdf/01%20-%20Complaint.pdf; Complaint, FTC v. ACRO Servs.
LLC, No. 3:22-cv-00895 (M.D. Tenn. 2022), https://www ftc.gov/system/files/ftc gov/pdf/ComplaintUnsealed.pdf; Complaint, FTC v. Fin. Educ. Servs. Inc., 2:22-cv-11120-BAF-APP (E.D. Mich. 2022),
https://www.ftc.gov/system/files/ftc gov/pdf/DE%201%20%20Complaint.pdf; Complaint, FTC & Cal. Dep’t of Fin. Prot. & Innovation v. Green Equitable Sols., No. 2:22cv-06499-FLA (C.D. Cal. 2022), https://www ftc.gov/system/files/ftc gov/pdf/Home%20Matters%20%20Complaint.pdf; FTC & Fla. Att’y Gen. v. GDP Network LLC, No. 6:20-cv-01192-WWB-DCI (M.D. Fla.
2022), https://www ftc.gov/system/files/documents/
cases/1923137yfsolutioncomplaint 0.pdf; Complaint, FTC v. SLAC, Inc., No. 5:20-cv-00470 (C.D. Cal. 2020),
https://www.ftc.gov/system/files/documents/cases/doc 1 complaint.pdf; Complaint, FTC v. Am. Fin. Support
Servs., Inc., No. 8:19-cv-02109-JWH (C.D. Cal. 2019),
https://www.ftc.gov/system/files/documents/cases/192 3040 arete financial group complaint for permanent inju
ction and other equitable relief 11-12-19.pdf; Complaint, FTC & Minn. v. Manhattan Beach Venture LLC, No.
2:19-cv- 7849 (C.D. Cal. 2019),
https://www.ftc.gov/system/files/documents/cases/172 3041 mbv complaint 0.pdf; Complaint, FTC v. Student
Advocates Team, LLC, No. 8:19-cv-01728-JVS (C.D. Cal. 2019),
https://www ftc.gov/system/files/documents/cases/172 3036 pag complaint 1.pdf; Complaint, FTC v. Elegant
Sols., Inc., No. 8:19-cv-01333-JVS (C.D. Cal. 2019),
https://www.ftc.gov/system/files/documents/cases/192 3105 elegant solutions - first amended complaint.pdf.
76
Complaint, FTC v. Automatic Funds Transfer Servs., Inc., No. 1:21-cv-02932 (D.D.C. 2021),
https://www ftc.gov/system/files/documents/cases/complaint 7.pdf.
77
Press Release, Fed. Trade Comm’n, FTC, California DFPI Case Leads to Ban Against Operators of Mortgage
Relief Scam Home Matters USA (Feb. 16, 2024), https://www.ftc.gov/news-events/news/pressreleases/2024/02/ftc-california-dfpi-case-leads-ban-against-operators-mortgage-relief-scam-home-matters-usa.
78
Press Release, Fed. Trade Comm’n., FTC Actions Against Companies Making Deceptive Pandemic Loan
Promises Lead to Record $59 Million in Damages (Mar. 18, 2024), https://www.ftc.gov/news-events/news/pressreleases/2024/03/ftc-actions-against-companies-making-deceptive-pandemic-loan-promises-lead-record-59-milliondamages.
75

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working closely with the Department of Education to prevent fraud around recent changes to
the student loan program 79 and to ensure relief for those affected by deceptive practices of forprofit colleges. 80
6.

Fighting Opioid Recovery Fraud and Other Health-Related
Misconduct

The FTC has activated the authority Congress gave us in the Opioid Addiction
Recovery Fraud Prevention Act (“OARFPA”) to stop companies from exploiting Americans
struggling with substance use disorders. In April 2024, we announced two OARFPA actions
against Monument 81 and Cerebral, 82 whom the Commission alleged engaged in deceptive
practices in disclosing to third parties for advertising purposes the personal health data of users
seeking substance use disorder treatment. In Monument, we obtained a suspended $2.5 million
civil penalty, and in Cerebral, we partnered with the Department of Justice to obtain a partially
suspended civil penalty judgment of $10 million. In 2023, we brought three additional
OARFPA actions challenging deceptive claims for products and services purporting to treat or
cure substance use disorders. In Smoke Away, the FTC obtained a $7.6 million judgment for
consumer redress and civil penalties in a settlement against the company for allegedly
deceptive advertising that its products eliminate nicotine addiction. 83 In Rejuvica, we obtained
a partially suspended $3.2 million judgment against the company for allegedly deceptive claims
that its products reduced alcohol cravings. 84 Finally, in AWAREmed, we obtained a $100,000
See Terri Miller, Scammers follow the news about student loan forgiveness, FTC (Apr. 16, 2024),
https://consumer ftc.gov/consumer-alerts/2024/04/scammers-follow-news-about-student-loan-forgiveness; Ari
Lazarus, Pay your student loans – not scammers, FTC (Sept. 14, 2023), https://consumer ftc.gov/consumeralerts/2023/09/pay-your-student-loans-not-scammers; Ari Lazarus, Did you hear the SCOTUS decision on student
loan debt relief? So did scammers., FTC (July 1, 2023), https://consumer.ftc.gov/consumer-alerts/2023/07/did-youhear-scotus-decision-student-loan-debt-relief-so-did-scammers.
80
See Press Release, Fed. Trade Comm’n, FTC Action Leads U.S. Dept. of Education to Forgive Nearly $37 Million in
Loans for Students Deceived by University of Phoenix (Sept. 20, 2023), https://www ftc.gov/news-events/news/pressreleases/2023/09/ftc-action-leads-us-dept-education-forgive-nearly-37-million-loans-students-deceived-university;
Press Release, Fed. Trade Comm’n, FTC Enforcement Action Leads U.S. Dept. of Education to Forgive $71.7
Million in Loans for Students Deceived by DeVry University (Feb. 16, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/02/ftc-enforcement-action-leads-us-dept-education-forgive-717-million-loansstudents-deceived-devry; see also Press Release, Fed. Trade Comm’n, FTC Sues Grand Canyon University for
Deceptive Advertising and Illegal Telemarketing (Dec. 23, 2023), https://www ftc.gov/news-events/news/pressreleases/2023/12/ftc-sues-grand-canyon-university-deceptive-advertising-illegal-telemarketing.
81
Press Release, Fed. Trade Comm’n, Alcohol Addiction Treatment Firm will be Banned from Disclosing Health
Data for Advertising to Settle FTC Charges that It Shared Data Without Consent (April 11, 2024),
https://www.ftc.gov/news-events/news/press-releases/2024/04/alcohol-addiction-treatment-firm-will-be-banneddisclosing-health-data-advertising-settle-ftc.
82
Press Release, Fed. Trade Comm’n, Proposed FTC Order will Prohibit Telehealth Firm Cerebral from Using or
Disclosing Sensitive Data for Advertising Purposes, and Require it to Pay $7 Million (April 15, 2024),
https://www.ftc.gov/news-events/news/press-releases/2024/04/proposed-ftc-order-will-prohibit-telehealth-firmcerebral-using-or-disclosing-sensitive-data.
83
Press Release, Fed. Trade Comm’n, FTC Acts to Stop Owner, Marketers of ‘Smoke Away’ from Deceptively
Claiming Products Enable Users to Quit Smoking (June 30, 2023), https://www ftc.gov/news-events/news/pressreleases/2023/06/ftc-acts-stop-owner-marketers-smoke-away-deceptively-claiming-products-enable-users-quitsmoking.
84
Press Release, Fed. Trade Comm’n, FTC Takes Action Against Makers of Sobrenix Supplement That Deceptively
Claimed to Reduce Alcohol Cravings, Relied on Fake Endorsements July 19, 2023), https://www.ftc.gov/news79

18

civil penalty against a treatment clinic for allegedly deceptive claims about addiction and
cancer treatment. 85 All three of these cases additionally involved alleged deceptive
endorsements or testimonials.
The FTC also has used its authorities to put an end to a variety of other deceptive claims
about health products or services. In January 2023, the FTC stopped allegedly deceptive baitand-switch advertising for vision correction services, which waste consumers’ time and put
honest businesses at a disadvantage. 86 In November 2023, the FTC and the California Attorney
General jointly obtained an order against CRI Genetics resolving allegations that the company
deceived consumers about the accuracy of its test reports compared with those of other DNA
testing companies; falsely claimed to have patented an algorithm for its genetic matching
process; used fake reviews; and utilizedused “dark patterns” to trick consumers into paying for
products they did not agree to buy. To settle these allegations, the company paid a $700,000
civil penalty. 87 Finally, to ensure businesses avoid running afoul of the FTC Act, in 2022 FTC
staff issued the Health Products Compliance Guidance, the first update the FTC has made to its
health-product business guidance in nearly 25 years. 88
7.

Expanding Consumer and Business Education

The FTC’s Every Community Initiative represents the agency’s coordinated effort to
ensure that the FTC is responsive to the needs of all consumers, including veterans and
servicemembers, rural communities, older adults, historically underserved and lower-income
communities, among others. Through this approach, the agency has provided these
communities with practical, language-appropriate, and user-friendly educational resources and
information to help them spot, avoid, and report scams. The FTC continues to translate all its
consumer education materials into Spanish and has expanded its reach to speakers of other
languages. By translating key materials for consumers and small businesses into 12 languages,
the FTC is paralleling its effort to expand in-language reporting capabilities of the Consumer
Sentinel Network. 89 FTC resources in other languages include information on spotting and
avoiding common scams, online safety for parents and children, identity theft, information for
events/news/press-releases/2023/07/ftc-takes-action-against-makers-sobrenix-supplement-deceptively-claimedreduce-alcohol-cravings.
85
Press Release, Fed. Trade Comm’n, FTC Sues Medical Clinic and Its Owner for False or Unsubstantiated Claims
Its Treatment Center Could Cure Addiction and Other Diseases (Mar. 16, 2023), https://www.ftc.gov/newsevents/news/press-releases/2023/03/ftc-sues-medical-clinic-its-owner-false-or-unsubstantiated-claims-its-treatmentcould-cure-addiction.
86
Press Release, Fed. Trade Comm’n, FTC Approves Final Order Against LCA-Vision, Halting Alleged Bait-andSwitch Advertising for LASIK Laser Eye Surgery (Mar. 15, 2023), https://www ftc.gov/news-events/news/pressreleases/2023/03/ftc-approves-final-order-against-lca-vision-halting-alleged-bait-switch-advertising-lasik-laser-eye.
87
Press Release, Fed. Trade Comm’n, FTC, California Obtain Order Against DNA Testing Firm over Charges it
Made a Myriad of Misrepresentations to Consumers to Entice Them to Buy Ancestry Reports (Nov. 21, 2023),
https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-california-obtain-order-against-dna-testing-firmover-charges-it-made-myriad-misrepresentations.
88
Press Release, Fed. Trade Comm’n, FTC Announces New Business Guidance for Marketers and Sellers of Health
Products (Dec. 20, 2022), https://www ftc.gov/news-events/news/press-releases/2022/12/ftc-announces-newbusiness-guidance-marketers-sellers-health-products.
89
See www ftc.gov/languages for consumer and business education in multiple languages, and
www.ReportFraud ftc.gov and www.IdentityTheft.gov for how to submit in-language reports through the FTC’s
Call Center.

19

immigrants and refugees, as well as resources for small business owners. 90 To advance the
agency’s goal of reaching all consumers, the FTC engages in ethnic and community media
telebriefings, in-person roundtables, and paid media campaigns that have led to millions of
impressions through print, radio, and digital media.
C.

Ensuring Fairness for Workers, Entrepreneurs, and Small Businesses

American workers and small businesses are consumers too, and the Commission is taking a
comprehensive approach—through enforcement, rulemaking, and advocacy—to ensure that they
are not held back by unfair or deceptive practices.
1.

Ensuring Domestic Manufacturers Can Compete Fairly

Marketers making false “Made in USA” claims can expect consequences. Recently, the
Commission announced its largest-ever action targeting deceptive Made in USA claims. In an
action against Williams-Sonoma, the Commission secured a $3 million civil penalty and
strong injunctive relief to prevent further deception. This action builds on nearly a dozen
actions over the last three years to combat deceptive Made in USA marketing.
For example, in January we charged tractor maker Kubota North America Corporation
with deceptively labeling thousands of imported replacement parts as Made in USA. That action
resulted in a $2 million civil penalty. 91 Other recent Made in USA actions have involved
companies making false claims for imported textile products, 92 glass baking products, 93 and
motocross parts. 94
The FTC continues to carefully monitor the market for false “Made in America” claims
and will use all available tools to ensure scammers who cheat consumers, honest businesses, and
American workers face heavy consequences for their lawbreaking. The Commission will also
continue to return significant funds to consumers deceived by these claims whenever possible. 95

See FTC, Consumer Education in Multiple Languages, https://consumer ftc.gov/features/languages. The 12
languages include: Amharic, Arabic, Chinese (Simplified and Traditional), French, Hmong, Korean, Russian,
Somali, Spanish, Tagalog, Ukrainian, and Vietnamese.
91
U.S. v. Kubota North America Corp., No. 3:24-cv-00159-S (N.D. Tex. Jan 25, 2024).
92
See In re Lions Not Sheep Products, LLC, No. C-4772 (July 28, 2022),
https://www ftc.gov/system/files/ftc gov/pdf/C4772%20Decision%20and%20Order.pdf (imported apparel products
relabeled as “Made in USA”); In re Electrowarmth Products, LLC, No. C-4779 (Oct. 25, 2022) (imported bedding
products entering the USA pre-labeled as “Made in USA”).
93
In re Instant Brands LLC, Docket No. C-4788 (Mar. 1, 2023) (imported glass measuring cups advertised as
“Made in USA”).
94
In re Cycra, Inc., Docket No. C-4794 (May 2023).
95
See, e.g., redress programs in In re Resident Home LLC, No. C-4767; In re Lions Not Sheep Products, LLC, No.
C-4772, and others.
90

20

2.

Helping Consumers to Repair Their Products and Giving
Independent Repairers a Chance to Compete

In May 2021, the Commission submitted a report to Congress entitled Nixing the Fix: An
FTC Report to Congress on Repair Restrictions. 96 In the report, the Commission found “scant
evidence” to support manufacturers’ justifications for repair restrictions. 97 The Commission
followed this report with an enforcement policy statement and three major actions against
companies for allegedly imposing unlawful repair restrictions on consumers. 98 FTC staff also
recently sent letters to eight companies regarding potentially improper repair restrictions. 99 The
Commission also is exploring other avenues to strengthen consumers’ rights, including by
supporting legislative efforts to advance the right to repair. 100
3.

Protecting Franchisees from Unfair or Deceptive Practices

The agency continues to take an integrated approach to franchise issues, undertaking
both enforcement and policy initiatives. In 2022, for example, we partnered with the
Department of Justice (“DOJ”) to file a suit against a fast-food chain, alleging that the chain
made false promises and withheld information required by the Franchise Rule to persuade more
than 1,500 consumers, some of them veterans, to purchase franchises. 101 In November 2023,

FTC, Nixing the Fix: An FTC Report to Congress on Repair Restrictions (May 2021),
https://www.ftc.gov/system/files/documents/reports/nixing-fix-ftc-report-congress-repairrestrictions/nixing the fix report final 5521 630pm-508 002.pdf.
97
Id. at 6.
98
Policy Statement of the Federal Trade Commission on Repair Restrictions Imposed by Manufacturers and Sellers
(July 21, 2021),
https://www ftc.gov/system/files/documents/public statements/1592330/p194400repairrestrictionspolicystatement.p
df; Press Release, Fed. Trade Comm’n, FTC Takes Action Against Harley-Davidson and Westinghouse for Illegally
Restricting Customers’ Right to Repair (June 23, 2022), https://www.ftc.gov/news-events/news/pressreleases/2022/06/ftc-takes-action-against-harley-davidson-westinghouse-illegally-restricting-customers-right-repair0; Press Release, Fed. Trade Comm’n, FTC Takes Action Against Weber for Illegally Restricting Customers’ Right
to Repair (July 7, 2022), https://www ftc.gov/news-events/news/press-releases/2022/07/ftc-takes-action-againstweber-illegally-restricting-customers-right-repair.
99
Press Release, Fed. Trade Comm’n, FTC Warns Companies to Stop Warranty Practices That Harm Consumers’
Right to Repair (July 3, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-warns-companiesstop-warranty-practices-harm-consumers-right-repair.
100
Press Release, Fed. Trade Comm’n, FTC Testifies Before California State Senate on Right to Repair (Apr. 11,
2023), https://www ftc.gov/news-events/news/press-releases/2023/04/ftc-testifies-california-state-senate-rightrepair; Press Release, Fed. Trade Comm’n, FTC Testifies in Support of Colorado’s Right-to-Repair Law (Feb. 29,
2024), https://www ftc.gov/news-events/news/press-releases/2024/02/ftc-testifies-support-colorados-right-repairlaw; Press Release, Fed. Trade Comm’n, FTC and DOJ File Comment with the U.S. Copyright Office Supporting
Renewal and Expansion of Exemptions Facilitating Consumers’ and Businesses’ Right to Repair Their Own
Products (Mar. 14, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/03/ftc-doj-file-comment-uscopyright-office-supporting-renewal-expansion-exemptions-facilitating.
101
Press Release, Fed. Trade Comm’n, FTC Sues Burger Franchise Company That Targets Veterans and Others with
False Promises and Misleading Documents (Feb. 8, 2023), https://www.ftc.gov/news-events/news/pressreleases/2022/02/ftc-sues-burger-franchise-company-targets-veterans-others-false-promises-misleading-documents.
96

21

the court entered a stipulated permanent injunction against the individual defendant 102 and in
January 2024, the court entered a default judgment against the corporate defendants. 103
In March 2023, the agency issued a Request for Information (“RFI”) related to franchise
agreements and franchisor business practices. 104 The RFI sought information about the means
by which franchisors may exert control over franchisees and their workers. In addition, last year
the FTC launched the consumer education blog series entitled Franchise Fundamentals in which
the FTC highlights for prospective franchisees factors they should consider when deciding
whether to purchase a franchise. The five-part blog series covered: (1) debunking certain myths
about being a franchisee; 105 (2) researching franchise opportunities; 106 (3) a review of the items
listed in franchise disclosure documents; 107 (4) key steps prospective franchisees should take
before joining a franchise; 108 and (5) reducing risk and reporting to the FTC. 109
Finally, the agency is building on these efforts through policy and advocacy. In
December 2021, the FTC filed an amicus brief in a class action suit by 7-Eleven franchisees in
which the Commission successfully argued that the FTC’s Franchise Rule does not address
whether franchisees are employees under Massachusetts law. Most recently, the agency issued
the Noncompete Clause Rule, which, among other things, prohibits imposing noncompete
clauses on workers, including franchisees’ employees. 110
4.

Protecting Gig Workers from Deceptive Earnings Claims

The Commission is taking action to ensure companies cannot make deceptive earnings or
income claims to attract consumers seeking work in the “gig economy.” The Commission
recently took action against Arise Virtual Solutions Inc., alleging that the company inflated the
amount of income and hourly wages that consumers would earn, including after the Commission
sent a Notice of Penalty of Offenses Concerning Money-Making Opportunities to the company,
FTC v. BurgerIM Group USA, Inc., et al., No. CV 22-825 (Feb. 7, 2022). Among other things, the order bans
defendant Loni from selling franchises and includes a suspended monetary judgment of more than $38,000,000 in
consumer redress and $5,000,000 in civil penalties.
103
Id. The order, among other things, bans the defendants from selling franchises and includes a monetary judgment
of more than $48,000,000 for consumer redress and $7,750,000 in civil penalties.
104
Press Release, Fed. Trade Comm’n, Solicitation for Public Comments on Provisions of Franchise Agreements and
Franchisor Business Practices (Mar. 10, 2023), https://www ftc.gov/news-events/news/press-releases/2023/03/ftcseeks-public-comment-franchisors-exerting-control-over-franchisees-workers.
105
Lesley Fair, Franchise Fundamentals: Debunking five myths about buying a franchise (Apr. 24, 2023),
https://www ftc.gov/business-guidance/blog/2023/04/franchise-fundamentals-debunking-five-myths-about-buyingfranchise.
106
Lesley Fair, Franchise Fundamentals: Researching franchise opportunities (May 2, 2023),
https://www ftc.gov/business-guidance/blog/2023/05/franchise-fundamentals-researching-franchise-opportunities.
107
Lesley Fair, Franchise Fundamentals: Taking a deep dive into the Franchise Disclosure Document (May 24,
2023), https://www ftc.gov/business-guidance/blog/2023/05/franchise-fundamentals-taking-deep-dive-franchisedisclosure-document.
108
Lesley Fair, Franchise Fundamentals: Considering, calculating, and consulting (July 10, 2023),
https://www ftc.gov/business-guidance/blog/2023/07/franchise-fundamentals-considering-calculating-consulting
109
Lesley Fair, Franchise Fundamentals: Reducing the risks – and reporting if things go awry (Aug. 29, 2023),
https://www ftc.gov/business-guidance/blog/2023/08/franchise-fundamentals-reducing-risks-reporting-if-things-goawry.
110
Press Release, Fed. Trade Comm’n, FTC Announces Rule Banning Non-competes (April 23, 2024),
https://www ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes.
102

22

and violated the Business Opportunity Rule by, among others things, making earnings claims in
the general media without the required substantiation and disclosures. 111 In addition to earning
less than advertised, consumers who worked as “agents” for Arise were required to spend money
on a mandatory background check fee and training enrollment prior to July 2022, and some were
required to purchase equipment, all before they could work for Arise. The order prohibits
unsubstantiated earnings claims and requires the company to pay $7 million.
IV.

COMPETITION MISSION

To ensure the Commission is faithfully discharging its statutory obligations, the FTC is
using all its authorities to maximize the agency’s impact as we combat and prevent unfair
methods of competition.
A.

Prioritizing Vigorous Merger Enforcement to Combat Consolidation

The FTC is charged with preventing mergers that may substantially lessen competition or
tend to create a monopoly. All too often, consolidation fueled by mergers and acquisitions have
yielded markets with higher prices, less choice, lower quality, depressed wages, fewer
opportunities, and less resiliency.
The work that the FTC does to prevent unlawful consolidation is enormously
demanding, resource-intensive, and critically important. While merger filings have fallen from
their recent peak in 2021, Commission staff and resources are still strained by the short statutory
deadlines and the scale, volume, and complexity of mergers. Against this backdrop, the FTC
remains committed to identifying and challenging unlawful mergers and acquisitions.
Consistent with these principles, in FY2023 and to date in FY2024, the FTC has moved
to challenge major transactions in sectors across the economy, including retail grocery, energy,
healthcare, mortgage technology, and digital markets. 112 This includes filing suit to block ten
mergers outright, 113 as well as scrutinizing 21 other anticompetitive mergers that parties
Press Release, Fed. Trade Comm’n, FTC Takes Action Against Gig Work Company Arise Virtual Solutions for
Deceiving Consumers About Pay in Marketing Its Business Opportunity (July 2, 2024), https://www ftc.gov/newsevents/news/press-releases/2024/07/ftc-takes-action-against-gig-work-company-arise-virtual-solutions-deceivingconsumers-about-pay.
112
Fed. Trade Comm’n & Dep’t of Justice, Hart-Scott-Rodino Annual Rep. Fiscal Year 2022 (2023),
https://www ftc.gov/system/files/ftc gov/pdf/p110014fy2021hsrannualreport.pdf.
113
Press Release, Fed. Trade Comm’n, FTC Moves to Block Tempur Sealy’s Acquisition of Mattress Firm (July 2,
2024), https://www ftc.gov/news-events/news/press-releases/2024/07/ftc-moves-block-tempur-sealys-acquisitionmattress-firm; Press Release, Fed. Trade Comm’n, FTC Moves to Block Tapestry’s Acquisition of Capri (Apr. 22,
2024), https://www ftc.gov/news-events/news/press-releases/2024/04/ftc-moves-block-tapestrys-acquisition-capri;
Press Release, Fed. Trade Comm’n, FTC Challenges Kroger’s Acquisition of Albertsons (Feb. 26, 2024),
https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-challenges-krogers-acquisition-albertsons; Press
Release, Fed. Trade Comm’n, FTC Sues to Block Novant Health’s Acquisition of Two Hospitals from Community
Health Systems (Jan. 25, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-sues-blocknovant-healths-acquisition-two-hospitals-community-health-systems; Press Release, Fed. Trade Comm’n, FTC
Seeks to Block Sanofi’s Acquisition of Rare Disease Drug that Threatens Sanofi’s Monopoly (Dec. 11, 2023),
https://www.ftc.gov/news-events/news/press-releases/2023/12/ftc-seeks-block-sanofis-acquisition-rare-diseasedrug-threatens-sanofis-monopoly; Press Release, Fed. Trade Comm’n, FTC Sues to Block John Muir Health’s
111

23

ultimately abandoned or restructured after the agency indicated competition concerns but before
it filed a complaint. 114
The Commission is particularly concerned about mergers that may cause significant
economy-wide harm. Earlier this year, the Commission challenged Kroger Company’s $24.6
billion acquisition of Albertsons, the largest supermarket deal in U.S. history. The Commission
authorized staff to seek a preliminary injunction in federal court to block the merger, alleging
that it would lead to higher prices for groceries and other essential household items for millions
of Americans. 115 The Commission’s complaint also alleges that the merger would eliminate
competition for workers in certain areas of the country, threatening the ability of employees to
secure higher wages, better benefits, and improved working conditions. A federal district court
hearing is scheduled for August 2024.
The Commission remains committed to stopping illegal mergers, especially in markets
for healthcare services. 116 Those mergers threaten patients with higher cost and lower quality
Takeover of San Ramon Regional Medical Center (Nov. 17, 2023), https://www.ftc.gov/news-events/news/pressreleases/2023/11/ftc-sues-block-john-muir-healths-takeover-san-ramon-regional-medical-center; Press Release, Fed.
Trade Comm’n, FTC Sues to Block IQVIA’s Acquisition of Propel Media to Prevent Increased Concentration in
Health Care Programmatic Advertising (July 17, 2023), https://www ftc.gov/news-events/news/pressreleases/2023/07/ftc-sues-block-iqvias-acquisition-propel-media-prevent-increased-concentration-health-care; Press
Release, Fed. Trade Comm’n, FTC Sues to Block Biopharmaceutical Giant Amgen from Acquisition That Would
Entrench Monopoly Drugs Used to Treat Two Serious Illnesses (May 16, 2023), https://www ftc.gov/newsevents/news/press-releases/2023/05/ftc-sues-block-biopharmaceutical-giant-amgen-acquisition-would-entrenchmonopoly-drugs-used-treat; Press Release, Fed. Trade Comm’n, FTC Acts to Block Deal Combining the Two Top
Mortgage Loan Technology Providers (Mar. 9, 2023), https://www.ftc.gov/news-events/news/pressreleases/2023/03/ftc-acts-block-deal-combining-two-top-mortgage-loan-technology-providers; Press Release, Fed.
Trade Comm’n, FTC Seeks to Block Microsoft Corp.’s Acquisition of Activision Blizzard, Inc. (Dec. 8. 2022),
https://www.ftc.gov/news-events/news/press-releases/2022/12/ftc-seeks-block-microsoft-corps-acquisitionactivision-blizzard-inc.
114
See, e.g., Press Release, Fed. Trade Comm’n, FTC Statement on Amendment to Global Partners, Gulf Oil
Acquisition (Apr. 9, 2024), https://www ftc.gov/news-events/news/press-releases/2024/04/ftc-statementamendment-global-partners-gulf-oil-acquisition; Press Release, Fed. Trade Comm’n, Statement Regarding the
Termination of Qualcomm’s Proposed Acquisition of Autotalks (Mar. 25, 2024), https://www ftc.gov/newsevents/news/press-releases/2024/03/statement-regarding-termination-qualcomms-proposed-acquisition-autotalks;
Press Release, Fed. Trade Comm’n, Statement Regarding the Termination of Choice Hotel’s Proposed Takeover of
Wyndham Hotels & Resorts (Mar. 12, 2024), https://www.ftc.gov/news-events/news/pressreleases/2024/03/statement-regarding-termination-choice-hotels-proposed-takeover-wyndham-hotels-resorts; Press
Release, Fed. Trade Comm’n, Statement Regarding the Termination of Amazon’s Proposed Acquisition of iRobot
(Jan. 31, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/statement-regarding-terminationamazons-proposed-acquisition-irobot.
115
Press Release, Fed. Trade Comm’n, FTC Challenges Kroger’s Acquisition of Albertsons (Feb. 26, 2024),
https://www ftc.gov/news-events/news/press-releases/2024/02/ftc-challenges-krogers-acquisition-albertsons.
116
See, e.g., Press Release, Fed. Trade Comm’n, FTC Sues to Block Merger Between Utah Healthcare Rivals HCA
Healthcare and Steward Health Care System (June 2, 2022), https://www.ftc.gov/news-events/news/pressreleases/2022/06/ftc-sues-block-merger-between-utah-healthcare-rivals-hca-healthcare-steward-health-care-system;
Press Release, Fed. Trade Comm’n, Federal Trade Commission Opposition to Transaction Leads New Jersey
Healthcare Rivals RWJBarnabas Health and Saint Peter’s Healthcare System to Abandon Proposed Merger (June
14, 2022), https://www ftc.gov/news-events/news/press-releases/2022/06/federal-trade-commission-oppositiontransaction-leads-new-jersey-healthcare-rivals-rwjbarnabas. Additionally, the two largest healthcare systems in
Rhode Island, Lifespan Corp. and Care New England Health System, called off their merger after the FTC, in
conjunction with the Rhode Island Attorney General, sought to block the merger. See Press Release, Fed. Trade

24

care 117 and healthcare workers with lower wages and poorer working conditions. Last
November, the Commission took action to block John Muir Health’s proposed acquisition of sole
ownership rights in San Ramon Regional Medical Center, a rival hospital that also provides care
to patients in California’s I-680 corridor. In a joint complaint filed with the California Attorney
General, the Commission alleged the deal would allow John Muir to demand higher rates at its
two hospitals as well as San Ramon Medical for inpatient general acute care services, which
covers a broad range of essential medical, surgical, and diagnostic services that require an
overnight hospital stay. Soon after the Commission filed suit, the companies abandoned their
plans. 118 Similarly, in January, the Commission moved to block Novant Health Inc.’s $320
million acquisition of two rival hospitals serving North Carolina’s Eastern Lake Norman Area.
The Commission alleged that the acquisition would allow Novant to control nearly 65 percent of
inpatient general acute care services in the area, likely leading to higher costs that are passed on
to patients. 119 Following the Commission’s challenge, the companies called off the
transaction. 120
The Commission is also focused on acquisitions by pharmaceutical companies that
threaten to raise the cost of life-saving treatments. In May 2023, the Commission moved to block
Amgen’s $27.9 billion acquisition of Horizon Therapeutics. In a joint complaint filed with the
attorneys general from six states, the Commission alleged that the deal would allow Amgen to
leverage its portfolio of blockbuster drugs to entrench the monopoly positions of Horizon
medications used to treat two serious conditions, thyroid eye disease and chronic refractory gout.
In particular, the Commission alleged that as one of the world’s largest biopharmaceutical
companies—with global sales of $24.8 billion and a product portfolio that included blockbuster
drugs such as Enbrel (for rheumatoid arthritis), Otezla (psoriasis), and Prolia (osteoporosis)—
Amgen could further entrench its position to negotiate with insurers and PBMs to gain
advantages over potential rivals through strategies such as cross-market bundling. To settle these

Comm’n, Statement Regarding Termination of Attempted Merger of Rhode Island’s Two Largest Healthcare
Providers (Mar. 2, 2022), https://www ftc.gov/news-events/news/press-releases/2022/03/statement-regardingtermination-attempted-merger-rhode-islands-two-largest-healthcare-providers.
117
See, e.g., Zack Cooper et al., The Price Ain’t Right? Hospital Prices and Health Spending on the Privately
Insured, 134 Q.J. ECON. 51 (2019); Nancy Beaulieu et al., Changes in Quality of Care after Hospital Mergers and
Acquisitions, 382 NEW ENG. J. MED. 51 (2020). For surveys of the research literature, see, e.g., Martin Gaynor &
Robert Town, The Impact of Hospital Consolidation, THE SYNTHESIS PROJECT, ROBERT WOOD JOHNSON
FOUNDATION (June 2012), http://www.rwjf.org/content/dam/farm/reports/issue briefs/2012/rwjf73261; Martin
Gaynor, Kate Ho & Robert Town, The Industrial Organization of Health-Care Markets, 53 J. ECON. LITERATURE
235 (2015).
118
See Press Release, Statement Regarding the Termination of John Muir’s Takeover of San Ramon Regional
Medical Center from Tenet Healthcare (Dec. 18, 2023), https://www ftc.gov/news-events/news/pressreleases/2023/12/statement-regarding-termination-john-muirs-takeover-san-ramon-regional-medical-center-tenet.
119
Press Release, FTC Sues to Block Novant Health’s Acquisition of Two Hospitals from Community Health
Systems (Jan. 25, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-sues-block-novanthealths-acquisition-two-hospitals-community-health-systems.
120
See Press Release, Fed. Trade Comm’n, Statement Regarding the Termination of Novant Health’s Acquisition of
Hospitals from Community Health Systems (July 1, 2024), https://www ftc.gov/news-events/news/pressreleases/2024/07/statement-regarding-termination-novant-healths-acquisition-hospitals-community-health-systems.

25

charges, Amgen agreed not to bundle any Amgen product with the two Horizon products,
Tepezza or Krystexxa, or to condition any product rebate on the sale of these drugs. 121
The Commission works to prevent dominant incumbents from acquiring nascent
competitors that are poised to enter the market and challenge their existing monopoly power. In
December 2023, the Commission filed suit to block Sanofi’s proposed acquisition of an
exclusive license to Maze Therapeutics Inc.’s therapy-in-development to treat Pompe disease, a
debilitating and potentially fatal genetic disorder. According to the Commission’s complaint,
Sanofi is a monopoly supplier of Food and Drug Administration (“FDA”) approved drugs to treat
the disease, and Maze’s Phase 2-ready developmental drug—a glycogen synthase 1 inhibitor
called MZE001—threatened to undermine this monopoly as the first oral medication available
for Pompe disease patients. After the Commission filed suit, Sanofi abandoned its plans. 122
The Commission has also taken action to protect competition in energy markets. In May
2024, the FTC issued a consent order to resolve antitrust concerns surrounding Exxon Mobil
Corporation’s acquisition of oil producer Pioneer Natural Resources. 123 The FTC’s complaint
alleged that former Pioneer CEO Scott Sheffield had, through public statements and private
communications, attempted to coordinate with representatives of OPEC and a related cartel of
other oil-producing countries known as OPEC+ to reduce output of oil and gas. The proposed
consent order prevents Sheffield from gaining a seat on Exxon’s board of directors or serving in
an advisory capacity at Exxon.
In August 2023, the FTC issued a consent order to resolve antitrust concerns stemming
from a deal between private equity firm Quantum Energy Partners and natural gas producer EQT
Corporation, both direct competitors in the production and sale of natural gas in the Appalachian
Basin, the largest natural gas-producing region in the United States. 124 According to the FTC’s
complaint, the proposed deal would have made Quantum one of EQT’s largest shareholders and
given Quantum, an active investor in natural gas in the region, a seat on EQT’s board of
directors. The Commission had reason to believe this was deal was illegal because it would
provide Quantum with the ability to sway or influence EQT’s competitive decision-making and
to access EQT’s competitively sensitive information. The FTC’s order enacted ground-breaking
structural relief, prohibiting Quantum from occupying the EQT board seat, requiring Quantum to
divest its EQT shares, prohibiting information exchange, and unwinding a separate joint venture

See Press Release, FTC Approves Final Order Settling Horizon Therapeutics Acquisition Challenge (Dec. 14,
2023), https://www ftc.gov/news-events/news/press-releases/2023/12/ftc-approves-final-order-settling-horizontherapeutics-acquisition-challenge.
122
Press Release, Fed. Trade Comm’n, FTC Acts to Prevent Interlocking Directorate Arrangement, Anticompetitive
Information Exchange in EQT, Quantum Energy Deal (Aug. 16, 2022), https://www ftc.gov/newsevents/news/press-releases/2023/08/ftc-acts-prevent-interlocking-directorate-arrangement-anticompetitiveinformation-exchange-eqt.
123
Press Release, Statement Regarding the Termination of Sanofi’s Proposed Acquisition of Maze Therapeutics’
Pompe Disease Drug (Dec. 13, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/12/statementregarding-termination-sanofis-proposed-acquisition-maze-therapeutics-pompe-disease-drug.
124
Press Release, Fed. Trade Comm’n, FTC Order Bans Former Pioneer CEO from Exxon Board Seat in ExxonPioneer Deal (May 2, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-order-bans-formerpioneer-ceo-exxon-board-seat-exxon-pioneer-deal.
121

26

between the two entities, among other provisions. This action marks the Commission’s first case
in 40 years enforcing Section 8 of the Clayton Act, which prohibits interlocking directorates.
The Commission is also concerned about evolving business strategies, including those
involving a series of acquisitions that can result in unlawful consolidation, even if each
individual transaction seems benign. Roll-up strategies across sectors, including healthcare,
make it especially critical that enforcers look at aggregate trends, not just isolated deals. 125
Consistent with these principles, last fall the Commission charged the dominant provider of
anesthesia services in Texas with undertaking an illegal roll-up scheme to monopolize
anesthesiology markets in Texas, using its dominance to raise prices and rake in tens of millions
of dollars of extra profits, at the expense of Texas patients and businesses. 126 The court allowed
the FTC’s case to proceed after denying the anesthesiology provider’s motion to dismiss. We are
also studying closely the empirical work examining the effects of private equity expansion into
healthcare, 127 and I have been concerned by studies showing that some private equity buyouts
have resulted in not just higher prices but also a dramatic fall-off in quality—in some cases
resulting in higher mortality rates. 128
B.

Targeting Anticompetitive Conduct for Maximum Impact

Outside of the merger context, the FTC also continues to identify and stop
anticompetitive conduct. The Commission is continuing to target root causes of anticompetitive
conduct and tackle the most significant harms across markets, particularly by dominant firms
whose unlawful business practices harm many Americans.
To this end, the FTC continues to scrutinize digital markets, recognizing that distinct
features of digital technologies have ushered in new market dynamics and business strategies
that require us to update our enforcement approach. Dominant digital platforms have captured
control over key arteries of commerce and communications in ways that can undermine
competition. The FTC’s investigations in digital markets recognize the critical role of data,

See 2023 Merger Guidelines, supra note 116, Guideline 8.
Press Release, Fed. Trade Comm’n, FTC Challenges Private Equity Firm’s Scheme to Suppress Competition in
Anesthesiology Practices Across Texas (Sept. 21, 2023), https://www ftc.gov/newsevents/news/pressreleases/2023/09/ftc-challenges-private-equity-firms-scheme-suppress-competitionanesthesiology-practices-across.
127
See, e.g., Loren Adler, Conrad Milhaupt & Samuel Valdez, Measuring Private Equity Penetration and
Consolidation in Emergency Medicine and Anesthesiology, 1 HEALTH AFFS. SCHOLAR 1 (June 20, 2023); Joseph D.
Bruch, Sohas Gondi & Zirui Song, Changes in Hospital Income, Use, and Quality Associated With Private Equity
Acquisition, 180 JAMA 1,428 (Nov. 1, 2020); Yashaswini Singh, Zirui Song & Daniel Polsky, Association of
Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization, 3 JAMA
HEALTH FORUM 1 (Sept. 2, 2022).
128
See, e.g., Atul Gupta, et al., Owners Incentives and Performance in Healthcare: Private Equity Investment in
Nursing Homes, NBER Working Paper 28474 (Aug. 2023),
https://www nber.org/system/files/working papers/w28474/w28474.pdf (finding that “private equity ownership
increases short-term mortality by 10%, which implies about 21,000 lives lost due to private equity ownership over
our sample period. Private equity ownership also increases spending by 19%, the vast majority of which is billed to
taxpayers. We observe several channels that help explain the increase in mortality: declines in patient-level health
measures, such as worsening mobility and elevated use of anti-psychotic medications; declines in nurse availability
per patient; and declines in compliance with federal and state standards of care”).
125
126

27

network externalities, moat-building strategies, and other key factors to ensure that our
enforcement is reflecting commercial realities.
In September, following a thorough investigation, the Commission and 17 state attorneys
general filed a lawsuit against Amazon alleging that the company has engaged in a course of
exclusionary conduct to maintain its monopoly in the online superstore and the online
marketplace services markets. 129 The complaint alleges that Amazon’s conduct has stopped
sellers from lowering prices, degraded quality for shoppers, overcharged sellers, stifled
innovation, and prevented rivals from fairly competing. These alleged tactics include antidiscounting measures that deter online sellers from offering lower prices than Amazon,
maintaining higher prices for products across the internet, and conditioning online vendors’
ability to obtain Prime status on the use of Amazon’s costly fulfillment services. This alleged
exclusionary conduct has impacted hundreds of billions of dollars in retail sales every year,
harming hundreds of thousands of online businesses, large and small, and tens of millions of
American households.
The FTC also continues to prosecute its complaint against Meta in a lawsuit that, in
addition to other forms of relief, seeks the divestment of Instagram and WhatsApp. 130 The FTC’s
amended complaint highlights the competitive importance of data and notes that privacy
degradation can constitute an antitrust harm—a fact that the court also acknowledged when it
denied Facebook’s motion to dismiss the FTC’s case. 131
Preventing the abuse of monopoly power that harms American farmers also continues to
be a priority for the Commission. In that vein, the FTC is pursuing the case it filed in September
2022 with a bipartisan coalition of ten state attorneys general that charges the two largest
pesticides manufacturers, Syngenta and Corteva, with maintaining their monopoly positions by
paying distributors to block competitors from selling their cheaper generic products to
farmers. 132 The complaint alleges that Syngenta Crop Protection and Corteva, Inc. rely on payto-block schemes in which distributors get paid only if they limit their dealings with competing
manufacturers. The primary legal issue in this case is whether the antitrust laws bar firms from
extending their patent monopolies through these pay-to-block schemes that restrict distributors
from buying cheaper generic products. But for farmers, the question is more practical: whether
the antitrust laws protect them from abusive monopoly practices that threaten their livelihood by
denying them access to cheaper versions of critical inputs. The FTC and state AGs prevailed

Press Release, Fed. Trade Comm’n, FTC Sues Amazon for Illegally Maintaining Monopoly Power (Sept. 26,
2023), https://www ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintainingmonopoly-power.
130
Press Release, Fed. Trade Comm’n, FTC Alleges Facebook Resorted to Illegal Buy-or-Bury Scheme to Crush
Competition After String of Failed Attempts to Innovate (Aug. 19, 2021),
https://www.ftc.gov/newsevents/news/press-releases/2021/08/ftc-alleges-facebook-resorted-illegal-buy-or-buryscheme-crush-competitionafter-string-failed.
131
FTC v. Facebook, Inc., 581 F. Supp. 3d 34 (D.D.C. 2022).
132
Press Release, Fed. Trade Comm’n, FTC and State Partners Sue Pesticide Giants Syngenta and Corteva for Using
Illegal Pay-to-Block Scheme to Inflate Prices for Farmers (Sept. 29, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/09/ftc-state-partners-sue-pesticide-giants-syngenta-corteva-using-illegal-pay-blockscheme-inflate.
129

28

against the defendants’ motion to dismiss and the case is pending in federal court in North
Carolina. 133
Continuing a long tradition of challenging illegal conduct by pharmaceutical
manufacturers, 134 the FTC has partnered with the Food and Drug Administration (FDA) to
challenge certain companies’ patent listings in the FDA’s publication of “Approved Drug
Products with Therapeutic Equivalence Evaluations,” commonly known as the Orange Book. 135
Improper or inaccurate Orange Book patent listings can delay cheaper generic alternatives from
entering the market, keeping brand name drug prices artificially high. Last November, FTC staff
issued warning letters to ten pharmaceutical companies stating that over a hundred patent listings
on medical devices like inhalers and epi-pens may have been improperly listed in the Orange
Book. 136 Soon after, several companies delisted their patents, opening a path for lower-priced
generic versions to enter the market. And three of the four top asthma inhaler companies have
announced plans to lower costs so that, starting in June, the maximum amount that any American
will have to pay for an asthma inhaler is $35. 137 Just a few months ago, FTC staff issued warning
letters to another ten pharmaceutical companies related to over 300 Orange Book listings for an
additional 20 brand-name treatments for diabetes, weight loss, asthma, and COPD drugs,
including Novo Nordisk Inc.’s blockbuster drug, Ozempic. 138
Finally, the FTC is staying vigilant to the ways in which algorithms and artificial
intelligence can enable new forms of price collusion. Through briefs filed jointly with the
Department of Justice in private suits, the agencies have made clear that residential landlords 139
and hotels 140 cannot collude on pricing through the use of algorithms—and that firms cannot use
an algorithm to engage in practices that would be illegal if done by a real person.

See FTC v. Syngenta Crop Protection AG, et al., No. 1:22-cv-00828 (M.D.N.C.).
The FTC has a long history of suing pharmaceutical companies for illegal pay-for-delay agreements that extend
their patent monopolies and delay generic entry. See FTC v. Actavis, Inc., 570 U.S. 136 (2013).
135
Press Release, Fed. Trade Comm’n, FTC Issues Policy Statement on Brand Pharmaceutical (Sept. 14, 2023),
https://www ftc.gov/news-events/news/pressreleases/2023/09/ftc-issues-policy-statement-brand-pharmaceuticalmanufacturers-improper-listing-patents-fooddrug.
136
Press Release, Fed. Trade Comm’n, FTC Challenges More Than 100 Patents as Improperly Listed in the FDA’s
Orange Book (Nov. 7, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-challenges-more100-patents-improperly-listed-fdas-orange-book.
137
See Reuters, GSK to cap out-of-pocket inhaler costs in US, March 20, 2024,
https://www reuters.com/business/healthcare-pharmaceuticals/gsk-cap-out-of-pocket-inhaler-costs-us-2024-0320/#:~:text=March%2020%20(Reuters)%20%2D%20British,by%20two%20of%20its%20rivals.
138
Press Release, FTC Expands Patent Listing Challenges, Targeting More Than 300 Junk Listings for Diabetes,
Weight Loss, Asthma and COPD Drugs (Apr. 30, 2024), https://www.ftc.gov/news-events/news/pressreleases/2024/04/ftc-expands-patent-listing-challenges-targeting-more-300-junk-listings-diabetes-weight-lossasthma.
139
See Hannah Garden-Monheit & Ken Merber, Price Fixing by Algorithm Is Still Price Fixing, FTC (Mar. 1,
2024), https://www ftc.gov/business-guidance/blog/2024/03/price-fixing-algorithm-still-price-fixing.
140
Press Release, Fed. Trade Comm’n, FTC and DOJ File Statement of Interest in Hotel Room Algorithmic PriceFixing Case (Mar. 28, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/03/ftc-doj-file-statementinterest-hotel-room-algorithmic-price-fixing-case.
133
134

29

C.

Harnessing the Full Suite of FTC’s Statutory Authorities to Protect
Competition and Innovation

I am fully committed to faithfully exercising the full set of tools and authorities that
Congress has granted the FTC. Exercising the Commission’s competition rulemaking authority
under Section 6(g) of the FTC Act is an example of this effort. On April 23, 2024, the
Commission issued a final rule that prohibits new noncompete clauses (“noncompetes”) with
workers. The final rule provides that it is an unfair method of competition—and therefore a
violation of Section 5—for employers to enter into noncompetes with workers. For existing
noncompetes, the final rule adopts a different approach for senior executives than for other
workers. For senior executives, existing noncompetes can remain in force. Existing noncompetes
with workers other than senior executives are not enforceable after the final rule’s effective
date. 141 Based on the available evidence, the Commission estimates that approximately one in
five American workers—or approximately 30 million workers—is subject to a noncompete. 142
Noncompetes are restraints on these workers’ economic freedom, as they prevent workers from
switching jobs or starting their own competing businesses. Substantial evidence shows that
noncompetes are reducing the competitiveness of labor markets and depriving businesses of a
talent pool that they need to enter, build, and expand. Substantial evidence also shows that
noncompetes reduce competition in product and service markets, inhibiting new business
formation and innovation. The Commission estimates that the final rule will increase new firm
formation by 2.7%—over 8,500 new businesses each year—and will lead to an average of
17,000-29,000 patents each year. Moreover, the Commission estimates that the final rule will
increase workers’ total earnings by an estimated $400 billion to $488 billion over ten years. 143
D.

Research and Policy Development

Alongside enforcement, the Commission is making long-term investments to maximize
the impact of our policy and research work. To tackle the pressing issues of today and tomorrow,
we are broadening our institutional skillsets to ensure we are fully grasping market realities,
especially as the economy becomes increasingly digitized.
Despite a very heavy enforcement workload, we continue to prioritize making substantial
investments to remain faithful to our mandate to engage in policy and research development
pursuant to Section 6 of the FTC Act. Through Section 6(b) of the FTC Act, Congress gave the
agency broad investigative powers to conduct market-wide inquiries that allow us to keep pace
with new business practices and market trends. In seeking to examine and get diverse feedback
from stakeholders about pressing or emergent issues, the agency has also issued requests for
information.
The Commission recently issued a report on grocery supply chain disruptions resulting
from the COVID-19 pandemic. 144 The report revealed that large market participants accelerated
Id.
See Non-Compete Clause Rule, 89 Fed. Reg. 38342 (May 7, 2024),
https://www federalregister.gov/documents/2024/05/07/2024-09171/non-compete-clause-rule#h-55.
143
Id. Part X.F.6.
144
Press Release, Fed. Trade Comm’n, FTC Releases Report on Grocery Supply Chain Disruptions (Mar. 21, 2024),
https://www ftc.gov/news-events/news/press-releases/2024/03/ftc-releases-report-grocery-supply-chain-disruptions.
141
142

30

and distorted the negative effects associated with supply chain disruptions. The FTC’s report also
examined how supply chain disruptions affected competition among retailers, wholesalers, and
producers, as well as the impacts on consumers and businesses. The report found that consumers
felt the negative effects of supply chain disruptions in the form of sky-high prices for groceries
and product shortages for essentials, like toilet paper. Notably, consumers are still facing the
negative impact of the pandemic’s price hikes, as the Commission’s report finds that some in the
grocery retail industry seem to have used rising costs as an opportunity to further raise prices to
increase their profits, which remain elevated. As the report explains, supply chain disruptions did
not equally impact every retailer, wholesaler, or producer. Instead, smaller firms, especially
smaller grocery retailers, disproportionately faced difficulties obtaining products compared to
larger firms. Some larger firms were better able to protect their product supply compared to
smaller competitors. Taken together, the report’s findings reveal how supply chain bottlenecks
can leave markets exposed to major supply chain shocks—and that those shocks, in turn, can
allow major firms to exploit and further entrench their dominance.
One focus of research and policy for the Commission has been healthcare markets. For
example, in June 2022, the Commission authorized a 6(b) study of the contracting practices of
pharmacy benefits managers (“PBMs”). 145 In May and June 2023, the FTC expanded its PBM
study by issuing three additional orders to companies that perform rebate services for their
affiliated PBMs. 146 This important study will shine a light on the opaque operations of these
large pharmacy middlemen who can dictate the pricing and access to life-saving drugs for so
many Americans.
Based on an RFI relating to the infant formula crisis, in March the Commission issued a
report on market factors relevant to infant formula supply disruptions, which details aspects of
the U.S. infant formula market that rendered it vulnerable to supply disruptions in 2022. 147 The
report also outlines considerations for policymakers to help create a more resilient infant formula
market going forward.
In November 2023, the FTC staff published a summary of responses from the RFI on
cloud computing. 148 The Commission is gathering information to inform our understanding of
Press Release, Fed. Trade Comm’n, FTC Launches Inquiry Into Prescription Drug Middlemen Industry (June 7,
2022), https://www ftc.gov/news-events/news/press-releases/2022/06/ftc-launches-inquiry-prescription-drugmiddlemen-industry. Consistent with the competition concerns that prompted the PBM study, the Commission
issued a “Policy Statement on Rebates and Fees in Exchange for Excluding Lower Cost Products,” putting the drug
industry on notice that paying rebates and fees to exclude competition from formularies violates the antitrust laws.
Press Release, Fed. Trade Comm’n, FTC to Ramp Up Enforcement Against Any Illegal Rebate Schemes, Bribes to
Prescription Drug Middlemen that Block Cheaper Drugs (June 16, 2022), http://www.ftc.gov/newsevents/news/press-releases/2022/06/ftc-ramp-up-enforcement-against-illegal-rebate-schemes.
146
Press Release, Fed. Trade Comm’n, FTC Deepens Inquiry into Prescription Drug Middlemen (May 17, 2023),
https://www ftc.gov/news-events/news/press-releases/2023/05/ftc-deepens-inquiry-prescription-drug-middlemen;
Press Release, Fed. Trade Comm’n, FTC Further Expands Inquiry into Prescription Drug Middlemen Industry
Practices (June 8, 2023), Launches Inquiry into Prescription Drug Middlemen Industry (June 7, 2022),
https://www.ftc.gov/news-events/news/press-releases/2023/06/ftc-further-expands-inquiry-prescriptiondrugmiddlemen-industry-practices.
147
Press Release, Fed. Trade Comm’n, FTC Issues Infant Formula Supply Disruptions Report (Mar. 13, 202

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A2e10d7726560a2d1. Public record. Not legal advice.