Testimony of the Federal Trade Commission (2024)

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Testimony of the Federal Trade Commission

Before the House Committee on Appropriations

Subcommittee on Financial Services and General Government

United States House of Representatives

Washington, D.C.

April 27, 2023

INTRODUCTION

Chairman Womack, Ranking Member Hoyer, and members of the Subcommittee, thank

you for inviting me to testify today. 1 Since I testified last year, the Commission has actively

been protecting consumers and promoting competition throughout the economy. This testimony

will address the Federal Trade Commission’s FY 2024 budget request; describe some of the

important work the FTC is doing to fulfill its broad mission of ensuring open, competitive, and

fair markets on behalf of consumers, workers, and honest businesses; and highlight some of the

challenges we face.

The Commission is grateful that in recent years, and particularly last year, Congress has

increased the FTC’s appropriation. The Commission is putting this funding to good use as it

continues to be at the forefront of many pressing issues, from corporate mergers affecting

critical sectors of the economy, the integrity of our supply chains, and the prices consumers pay

for drugs, to data practices that can expose Americans’ most sensitive and personal information.

The FTC is charged with tackling unfair or deceptive practices—be it companies who lie about

products being Made in America, prey on small businesses, make it hard for consumers to cancel

unwanted subscriptions, use dark patterns to get children to make unintentional purchases online, or

who peddle fake COVID cures or ineffective treatments for opioid addictions—and we’re

responsible for rooting out unfair methods of competition that can crush entrepreneurs and stifle

innovation. Our jurisdiction spans the entirety of the U.S. economy, and Congress has assigned

us the task of enforcing or administering the provisions of more than 80 statutes. 2

This written testimony reflects the views of the Commission. The oral statement and responses to questions reflect

the views of the individual Commissioners, and do not necessarily reflect the views of the Commission or any other

Commissioner.

FTC, Legal Library: Statutes, https://www.ftc.gov/legal-library/browse/statutes (last visited Apr. 23, 2023).

We continue to deploy the full set of tools and authorities that Congress has granted us.

This includes law enforcement, rulemaking, and research. As this testimony will describe, the

FTC staff has been tireless in addressing fraud targeting seniors, servicemembers, and nonEnglish speakers; understanding and responding to the effects of rapidly changing technology;

reviewing ever more complex merger transactions; litigating against defendants with

seemingly limitless resources; undertaking new studies on pressing issues; and confronting legal

challenges to our authority. But we are not keeping pace with the demands of our expansive

mission, which is why the FTC has requested $590 million in FY 2024.

We are committed to ensuring that the funding Congress appropriates for the agency is

used effectively and that we are addressing root causes and dealing with the most significant

harms across markets, particularly by dominant firms whose business practices affect large

numbers of Americans. And, as evidenced by our creation earlier this year of an Office of

Technology, we are focused on the need to be forward-looking in anticipating problems and

taking swift action, especially as it concerns next-generation technologies and nascent markets

across sectors. Orienting our work around these principles can help maximize our efficacy.

II.

BUDGET AND RESOURCES

Currently, the FTC has around 1,200 employees on-board. The FTC’s enacted budget for

FY 2023 of $430 million will enable us to grow by approximately 150 FTE, taking us from 1,230

FTE to 1,380 FTE, a level we aim to hire to within the next year. Despite this increase, an FTE

level of 1,380 is still approximately just 80% of what it was at the beginning of 1980, 3 while the

nation’s GDP has increased six-fold since then. Demands on the Commission continue to grow

FTC, FTC Appropriation and Full-Time Equivalent (FTE) History, https://www.ftc.gov/about-ftc/bureausoffices/office-executive-director/financial-management-office/ftc-appropriation (last visited Apr. 23, 2023)

(showing 1719 FTE in 1980).

as we review corporate mergers, 4 conduct more complex and expensive litigation, receive

consumer complaints, 5 try to stay abreast of transformative technological and market changes, 6

and respond to burgeoning requests for research and investigation of various economic sectors.

These factors have underscored both the importance of our work and the critical need for

additional resources. Last year, Congress increased the merger filing fees that offset the FTC’s

appropriation, and we hope this facilitates bolstering the agency’s funding.

For FY 2024, the FTC is requesting $590 million and 1,690 FTE. This request to increase

our budget by $160 million will fund an additional 310 FTE over our planned FY 2023 level of

1,380 and enable us to address in part the increased demand on agency staff and resources. For

FY 2024, we plan to deploy existing hiring strategies to build on the growth started in FY 2022

to recruit the additional FTE sought in the FY 2024 budget request.

This budget request leverages the agency’s existing Regional Office structure to expand

the agency’s candidate pool and community presence, effectively use telework, and implement a

As reflected in the annual report on the Hart-Scott-Rodino premerger program, the agencies reviewed an

overwhelming number of HSR-reportable transactions in FY 2021 and issued more “Second Requests” for

additional information from the merging parties than the year before, signaling a significant increase in the merger

workload. See Press Release, Fed. Trade Comm’n, FTC, DOJ Issue Fiscal Year 2021 Hart Scott Rodino Premerger

Notification Report (Feb. 10, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-doj-issuefiscal-year-2021-hart-scott-rodino-premerger-notification-report. While the number of HSR filings has fallen since

the FY2021 peak, they remain high, with filings for over 3200 transactions in FY2022. (Monthly HSR numbers are

posted on the FTC website at https://www.ftc.gov/enforcement/premerger-notification-program).

See, e.g., Press Release, Fed. Trade Comm’n, New FTC Data Show Consumers Reported Losing Nearly $8.8

Billion to Scams in 2022, https://www.ftc.gov/news-events/news/press-releases/2023/02/new-ftc-data-showconsumers-reported-losing-nearly-88-billion-scams-2022.

For example, as of March 2022, the UK’s Information Commissioner’s Office, the principal privacy enforcement

agency in the UK, had 944 permanent staff. See Information Commissioner’s Office, Information Commissioner’s

Annual Report and Financial Statements 2021-22 at 107 (July 2022), https://ico.org.uk/media/about-theico/documents/4021039/ico-annual-report-2021-22.pdf. Ireland’s Data Protection Commission, responsible for

enforcing the European privacy regulation, had 196 employees as of December 2022. See Data Protection

Commission, Annual Report 2022 at 53, https://www.dataprotection.ie/sites/default/files/uploads/202303/DPC%20AR%20English_web.pdf. By contrast, the Federal Trade Commission’s Division of Privacy and

Identity Protection currently has just 48 employees. Although it is true that FTC employees in other units, including

the regional offices, the Division of Enforcement, and the Division of Marketing Practices, contribute to the

Commission’s security and privacy efforts, the total number of FTC employees working on these issues is far

exceeded by our European counterparts.

nimbler workforce that will work on consumer protection and competition matters. Fully

executing on our mission requires that our analytical capabilities keep up with changing market

realities, and this budget request accordingly seeks to better position us to recruit a range of

experts, including financial analysts, technologists, and others. In addition to expanding on

existing expertise, we intend to expand into new areas, such as by retaining child psychologists

and youth-development experts to address certain harms and remedies. 7 These skills will allow

us to continue building in-house expertise, supporting our ability to conduct market-wide

inquiries and scrutinize emerging business practices.

The FY 2024 budget request also funds additional expert witness levels commensurate

with the additional FTE levels, given our need to support expert work in litigation, particularly in

cases against large, well-financed defendants.

Additionally, the FTC seeks resources for systems modernization and infrastructure

upgrades to support a larger decentralized workforce and enhance applications that directly

support our mission, such as the comprehensive complaint database known as the Consumer

Sentinel Network, which is accessible to law enforcement agencies across the country and

internationally.

The FTC’s budget request would be offset by fees collected from HSR filings and

pursuant to the Telemarketing and Consumer Fraud and Abuse Prevention Act. When possible,

the agency collects money to return to harmed consumers. During FY 2022, the FTC returned

$497 million to consumers and the U.S. Treasury General Fund. Of this amount, judgments

FTC, Annual Performance Report for Fiscal Year 2021 and Annual Performance Plan for Fiscal Years 2022 to

2023 at 79, https://www.ftc.gov/system/files/ftc_gov/pdf/21apr_22-23app.pdf; FTC, Strategic Plan for Fiscal Years

2022-2026 at 24, https://www.ftc.gov/system/files/ftc_gov/pdf/fy-2022-2026-ftc-strategic-plan.pdf.

resulting in redress disbursements to harmed consumers totaled $325 million, 8 and an additional

$14 million in disgorgements was returned to Treasury. Also, civil penalty collections returned

to Treasury totaled $158 million.

Throughout FY 2022, the FTC saved consumers an estimated $4.1 billion through its

merger and nonmerger competition law enforcement actions and its consumer protection law

enforcement actions. 9 For FY 2022, every $1 of the FTC’s costs returned an estimated $30 in

FTC-provided benefits to consumers. We expect that a larger budget would position us to further

improve on this return on investment.

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; ensure that domestic manufacturers,

independent repairers, and other small businesses have a chance to compete fairly; fight fraud,

junk fees, and related harms affecting consumers; combat opioid recovery and other health fraud;

and stand up for historically underserved communities such as Older Americans and

servicemembers.

Protecting Every Community from Fraud and Deceptive Business Practices

The FTC is undertaking comprehensive enforcement action to root out fraud and

deceptive business practices, including those that target historically underserved communities.

Most of the redress disbursements were from cases that were resolved prior to the Supreme Court’s April 2021

decision in AMG Capital Management, LLC v. FTC, 141 S. Ct. 1341 (2021), which invalidated the Commission’s

ability to obtain refunds for consumers under Section 13(b) of the FTC Act. Once the Commission completes

distribution of funds obtained in cases resolved prior to AMG, future Commission distributions will likely decrease

due to the loss of the ability to obtain monetary relief under Section 13(b).

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).

Reducing the Scourge of Unwanted Calls

In FY 2022, the FTC received more than 3 million complaints about unwanted calls,

including 1.8 million reports about robocalls. 10 The Commission uses every tool at its disposal to

combat these calls. The FTC has filed 161 enforcement actions against 545 companies and 438

individuals alleged to be responsible for placing billions of unwanted telemarketing calls to

consumers. We have also collected over $393 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 freezing their remaining assets so that

those funds could be returned to consumers. 11

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The FTC is also disrupting foreign-based scammers that bring illegal robocalls into the

United States. Earlier this month, the FTC announced Project Point of No Entry (“PoNE”), a new

initiative targeting “point of entry” or “gateway” Voice over Internet Protocol (“VoIP”) service

providers. 12 In collaboration with the Federal Communications Commission, the Industry

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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”), and monitors

FTC, Do Not Call Registry Data Book 2022: Complaint Figures for FY 2022 (2022),

www.ftc.gov/system/files/ftc_gov/pdf/DNC-Data-Book-2022.pdf.

Temporary Restraining Order, FTC v. Green Equitable Sols., No. 2:22-cv-06499-FLA (C.D. Cal. Sept. 14, 2022),

https://www.ftc.gov/system/files/ftc_gov/pdf/2022.09.14%20Order%20granting%20TRO.pdf (freezing the

defendants’ assets and shutting down their deceptive practices). This action is being taken in conjunction with the

state of California and involves allegations that the defendants illegally called consumers on the Do Not Call

Registry, pitching mortgage relief services and falsely claiming to be affiliated with government COVID-19 relief

programs. See Press Release, Fed. Trade Comm’n, Federal Trade Commission, California Take Action To Shut

Down Mortgage Relief Operation That Preyed on Struggling Homeowners (Sept. 19, 2022),

https://www.ftc.gov/news-events/news/press-releases/2022/09/federal-trade-commission-california-take-action-shutdown-mortgage-relief-operation-preyed.

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.

their pursuit of recalcitrant providers, including by conducting law enforcement investigations

and filing lawsuits when appropriate.

The FTC is determined to go after not only individual bad actors but also the platforms

that enable these practices on a massive scale. 13 The Commission has initiated two rulemakings

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that would modify the TSR to further assist law enforcement in the fight against unwanted

calls. 14

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Fighting Opioid Recovery Fraud and Other Health-Related

Misconduct

The FTC has used 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 our first OARFPA case, we obtained a $3.8 million civil penalty

judgment against R360 based on allegedly deceptive claims to consumers seeking substance

abuse treatment. 15 Just last month, we announced an OARFPA action against AWAREmed

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alleging false efficacy claims and obtained a $100,000 civil penalty. 16

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The FTC also has used its authorities to put an end to a variety of other deceptive

treatment claims. In January 2023, the FTC put an end to allegedly deceptive bait-and-switch

advertising for vision correction services, which cost consumers time and put honest businesses

Complaint, United States v. Stratics Networks, Inc., No. 3:23-cv-00313 (S.D. Cal. Feb. 17, 2023),

https://www.ftc.gov/system/files/ftc_gov/pdf/001-complaint.pdf.

Notice of Proposed Rulemaking, 87 Fed. Reg. 33,677 (June 3, 2022); Advance Notice of Proposed Rulemaking,

87 Fed. Reg. 33,662 (June 3, 2022).

See Press Release, Fed. Trade Comm’n, FTC Hits R360 and its Owner With $3.8 Million Civil Penalty Judgement

for Preying on People Seeking Treatment for Addiction (May 17, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/05/ftc-hits-r360-its-owner-38-million-civil-penalty-judgment-preying-peopleseeking-treatment-addiction.

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.

at a disadvantage. 17 We continued aggressively litigating a case against health products

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marketers for allegedly making deceptive claims that their products grow bone and cartilage and

relieve joint pain. 18 And, to ensure businesses avoid running afoul of the FTC Act, FTC staff

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recently issued the Health Products Compliance Guidance, the first update the FTC has made to

its health-product business guidance in nearly 25 years. 19

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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 targeting older adults with allegedly deceptive

practices, including around timeshares, 20 sham health plans, 21 and foot pain. 22 In addition, as

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with its work on unwanted calls, the FTC is going after platforms that allegedly facilitate scams

(like the grandparent and lottery or sweepstakes scams) at scale. 23 The FTC also has

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aggressively gone after companies making deceptive earnings claims, a business practice that

disproportionately affects retirees and older adults looking to supplement their incomes. The

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.

Press Release, Fed. Trade Comm’n, FTC Order to Bar ZyCal Bioceuticals from Deceptive Health Marketing (Feb.

6, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-order-bar-zycal-bioceuticals-deceptivehealth-marketing.

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.

Complaint, United States v. Consumer Law Prot., LLC, No. 4:22-cv-01243 (E.D. Mo. Nov. 21, 2022),

https://www.ftc.gov/system/files/ftc_gov/pdf/2123065SquareOneComplaint.pdf.

Press Release, Fed. Trade Comm’n, FTC Action Against Benefytt Results in $100 Million in Refunds for

Consumers Tricked into Sham Health Plans and Charged Exorbitant Junk Fees (Aug. 8, 2022),

https://www.ftc.gov/news-events/news/press-releases/2022/08/ftc-action-against-benefytt-results-100millionrefunds-consumers-tricked-sham-health-plans-charged.

Complaint, FTC v. Gravity Defyer Medical Technology Corp., No. 1:22-cv-01464 (D.D.C May 25, 2022),

https://www.ftc.gov/system/files/ftc_gov/pdf/1923114GravityDefyerComplaintrev.pdf.

Complaint, FTC v. Walmart, Inc., No: 1:22-cv-03372 (N.D. Ill. June 28, 2022), https://www.ftc.gov/legallibrary/browse/cases-proceedings/182-3012-walmart-ftc-v.

Commission’s deceptive earnings actions have included investment advisors, 24 crypto and other

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bogus business schemes, 25 and day trading. 26

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The agency’s education and outreach work complements this vigorous enforcement.

During 2022, the FTC updated its most popular 27 education campaign, Pass It On 28 (Pásalo 29 in

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Spanish), 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’s external outreach was also formalized this year through the establishment of the

Advisory Group, which facilitates collaborations with outside stakeholders. 30 The Commission’s

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annual report to Congress describes in detail our work for older adults. 31

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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, 32 the FTC and a group of 18 states took action

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Press Release, Fed. Trade Comm’n, 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/pressreleases/2023/01/ftc-suit-requires-investment-advice-company-wealthpress-pay-17-million-deceiving-consumers.

Press Release, Fed. Trade Comm’n, FTC Takes Action to Stop DK Automation and Kevin David Hulse from

Pitching Phony Amazon and Crypto Moneymaking Schemes (Nov. 16, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/11/ftc-takes-action-stop-dk-automation-kevin-david-hulse-pitching-phony-amazoncrypto-moneymaking.

Press Release, Fed. Trade Comm’n, Federal Trade Commission Cracks Down on Warrior Trading For Misleading

Consumers With False Investment Promises (Apr. 19, 2022), https://www.ftc.gov/news-events/news/pressreleases/2022/04/federal-trade-commission-cracks-down-warrior-trading-misleading-consumers-false-investmentpromises.

Since its original launch in 2014, nearly 18 million Pass It On materials have been distributed nationwide in

English and Spanish.

See http://www.ftc.gov/PassItOn.

See http://www.ftc.gov/Pasalo.

See FTC, Scams Against Older Adults Advisory Group Meeting (Sept. 29, 2022),

https://www.ftc.gov/newsevents/events/2022/09/scams-against-older-adults-advisory-group-meeting.

FTC, Protecting Older Consumers 2021-2022 (Oct. 2022),

https://www.ftc.gov/system/files/ftc_gov/pdf/P144400OlderConsumersReportFY22.pdf.

10 U.S.C. § 987.

against Harris Jewelry, a national jewelry retailer, to stop the company from targeting 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. 33 The Commission’s

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efforts to protect military and veteran communities include a vigorous, long-standing educational

campaign and close coordination with servicemember and veteran agencies. 34 This collaborative

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outreach is the cornerstone of the annual Military Consumer Month, 35 which the FTC created

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and manages with its partners, including AARP’s Veterans & Military Families Initiative. 36 The

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agency also participates in an ongoing working group led by the Department of Veterans Affairs

(VA) to inform veterans how to avoid scams.

Preventing Financial Exploitation

The FTC brought eight federal court actions in recent years against companies that

targeted financially insecure consumers and made false credit repair, mortgage, or other debt

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).

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)).

See Carol A. Kando-Pineda, Military Consumer Month 2022, FTC (June 27, 2022),

https://consumer.ftc.gov/consumer-alerts/2022/06/military-consumer-month-2022.

See AARP, Veterans and Military Families, https://www.aarp.org/volunteer/causes/veterans-military-families/.

relief promises, 37 as well as one action against a debt relief payment processor. 38 For example,

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last September, the FTC and the California Department of Financial Protection and Innovation

filed a law enforcement action against several corporate and individual defendants doing

business as Home Matters USA, among other names, for allegedly operating sham mortgage

relief services that misled consumers and cost them millions. 39 The federal district court granted

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a Temporary Restraining Order including an asset freeze against the defendants, and litigation is

ongoing. The Commission also is working closely with the Department of Education to prevent

fraud around recent changes to the student loan program 40 and to ensure relief for those affected

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by deceptive practices by for-profit colleges. 41

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Complaint, FTC v. ACRO Servs. LLC, No. 3:22-cv-00895 (M.D. Tenn. 2022),

https://www.ftc.gov/system/files/ftc_gov/pdf/Complaint-Unsealed.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 v. Green Equitable Sols., No. 2:22-cv-06499-FLA (C.D. Cal. 2022),

https://www.ftc.gov/system/files/ftc_gov/pdf/Home%20Matters%20-%20Complaint.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 v. Manhattan Beach Venture LLC, No. 2:19-cv7849 (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.

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.

Press Release, Fed. Trade Comm’n, Federal Trade Commission, California Take Action To Shut Down Mortgage

Relief Operation that Preyed on Struggling Homeowners (Sept. 19, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/09/federal-trade-commission-california-take-action-shut-down-mortgage-reliefoperation-preyed.

See K. Michelle Grajales, Student Loan Scammers Are Circling. Keep Them at Bay, FTC (Oct. 3, 2022),

https://consumer.ftc.gov/consumer-alerts/2022/10/student-loan-scammers-are-circling-keep-them-bay; Terri Miller,

Got Student Loans? Spot Scams Related to the Sweet Lawsuit, FTC (Sept. 16, 2022),

https://consumer.ftc.gov/consumer-alerts/2022/09/got-student-loans-spot-scams-related-sweet-lawsuit; Terri Miller,

Limited Waiver for Student Loan Forgiveness Ends October 31, FTC (July 21, 2022),

https://consumer.ftc.gov/consumer-alerts/2022/07/limited-waiver-student-loan-forgiveness-ends-october-31-0.

See 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; Press Release, Fed. Trade Comm’n, Federal Trade Commission Takes Action Against ForProfit Medical School for Using Deceptive Marketing to Lure Students (Apr. 15, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/04/federal-trade-commission-takes-action-against-profit-medical-school-usingdeceptive-marketing-lure.

Combatting Junk Fees and Unwanted Charges

Junk fees are unavoidable charges for products with little or no value that are imposed on

consumers with no notice. 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 undercut honest businesses by making it harder to compete on price and cause harm

to consumers who are often surprised and frustrated by unexpected charges. The FTC has

initiated two new rulemakings to address this problematic conduct. Last year the FTC published

a notice of proposed rulemaking to ban certain junk fees and bait-and-switch advertising tactics

that can plague consumers throughout the car-buying experience. The proposal also would

require dealers to make key disclosures to consumers, including providing a true “offering price”

for a vehicle that would be the full price a consumer would pay, excluding only taxes and

government fees. 42 Separately, we are exploring a rulemaking to crack down on deceptive or

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unfair junk fees across multiple industries. We are reviewing thousands of comments we

received from the public on the types of junk fees they’ve experienced, and the harm caused by

such fees. 43

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The Commission also has proposed to amend the Negative Option Rule to better address

deceptive or unfair practices around negative marketing, including perpetual subscriptions,

difficulty in cancellation, and failure to obtain consumers’ express, affirmative consent. 44 The

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Press Release, Fed. Trade Comm’n, FTC Proposes Rule to Ban Junk Fees, Bait-and-Switch Tactics Plaguing Car

Buyers (June 23, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-proposes-rule-ban-junkfees-bait-switch-tactics-plaguing-car-buyers.

Press Release, Fed. Trade Comm’n, Federal Trade Commission Explores Rule Cracking Down on Junk Fees (Oct.

20, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/10/federal-trade-commission-explores-rulecracking-down-junk-fees.

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.

proposed rule amendment covers a broad scope of recurring subscriptions and similar

arrangements in all media 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.

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 historically underserved communities. Through

this initiative, the agency has provided historically underserved communities with practical,

language-appropriate, and user-friendly educational resources and information to help them spot,

avoid, and report scams. 45 The FTC continues to translate all its consumer education materials

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into Spanish and recently expanded its reach to speakers of other languages. With the launch of

ftc.gov/languages, the agency now provides information on how to spot, avoid, and recover from

scams in 12 languages. 46 All of these Every Community education and outreach efforts are

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supported by ethnic-media telebriefings, in-person roundtables, and paid media campaigns that

have led to millions of impressions through print, radio, and digital media.

See, e.g., FTC, Consumer Issues Affecting American Indian and Alaska Native Communities (2023),

https://www.ftc.gov/reports/consumer-issues-affecting-american-indian-alaska-native-communities (describing

expanded targeted education and outreach efforts with American Indian/Alaska Native (AI/AN) communities

nationwide). Agency staff also employed listening sessions with sources trusted in AI/AN communities, built

ongoing partnerships with tribal governments and organizations serving AI/AN populations, and created a site—as

directed by Congress—to share information on the issues raised. See FTC, Native American Communities: Spot,

Avoid, and Report Scams, https://consumer.ftc.gov/features/native-american-communities-spot-avoid-and-reportscams.

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.

Safeguarding Consumer Privacy and Strengthening Data Security

The FTC is taking bold steps to safeguard consumer data and move away from the

“notice and choice” privacy model. We are particularly focused on health data, children and

teens, data security, and market-wide initiatives to strengthen privacy and data security.

Protecting Consumers’ Sensitive Health Data

The FTC is taking action to address the privacy of health data where HIPAA does not

apply, including data shared with direct-to-consumer health websites and apps that can reveal

consumers’ medications, visits to providers, and health conditions.

First, the FTC is taking action to ensure that geolocation data that reveals health

conditions and other sensitive information is not indiscriminately sold to the highest bidder. In

the summer of 2022, FTC staff warned the marketplace that we were prepared to bring

enforcement actions to halt the illegal use and sharing of consumers’ geolocation data. 47 Last

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August, we filed a complaint 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. 48 This matter remains in active

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litigation.

Kristin Cohen, Location, Health, and Other Sensitive Information: FTC Committed to Fully Enforcing the Law

Against Illegal Use and Sharing of Highly Sensitive Data, FTC Business Blog (July 11,

2022), https://www.ftc.gov/business-guidance/blog/2022/07/location-health-and-other-sensitive-information-ftccommitted-fully-enforcing-law-against-illegal.

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-clinics-placesworship-other.

The FTC has also brought two groundbreaking actions barring consumer-facing health

providers from sharing sensitive health data for advertising purposes. In GoodRx 49 and

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BetterHelp, 50 the Commission alleged that the companies disclosed their users’ personal health

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information to advertising platforms such as Facebook and Google, without consent and in

contravention of their privacy promises. The settlements in these actions included important

provisions prohibiting 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 settlement included

civil penalties resulting from the Commission’s first enforcement of the Health Breach

Notification Rule. 51 The BetterHelp order includes $7.8 million in monetary relief which will go

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back to consumers as partial refunds, another first in a health privacy case.

Protecting Children and Teens

Online services can pose unique risks to children and teens, and the FTC is taking an

expansive look at how to protect minors from digital harms, both through the Children’s Online

Privacy Protection Act Rule 52 (“COPPA”), which protects children under 13, as well as through

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Section 5 of the FTC Act. For example, we brought a law enforcement action against Epic

Games, Inc. (“Epic”)—creator of the popular video game “Fortnite”—alleging that Epic violated

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.

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.

The Health Breach Notification Rule also is subject to a rule review to consider, among other things, whether

modifications of the rule are appropriate to increase its benefits to consumers. See Health Breach Notification Rule,

85 Fed. Reg. 31,085 (Aug. 20, 2020).

16 C.F.R. § 312.

COPPA 53 and engaged in an unfair practice by employing default settings that connected

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children and teens via voice and text chat to strangers, exposing them to psychological harm. 54

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This action ultimately resulted in a federal court order securing strong and novel relief for

consumers—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.

The Commission also is committed to preventing data abuses around educational

technology services and last year issued a Policy Statement making clear that we would use our

full set of authorities to hold firms accountable. Last year, we brought an enforcement action

against online learning platform Chegg, Inc. 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. 55

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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.

The FTC is considering steps to deepen this work, including retaining psychologists and youth development

experts to allow the agency to analyze conduct, assess harms and remedies, and pursue studies with an

interdisciplinary approach, including conduct affecting children. FTC, Federal Trade Comm’n Annual Performance

Report for Fiscal Year 2021 and Annual Performance Plan for Fiscal Years 2022 to 2023 [hereinafter “FTC FY2223 Annual Performance Report”] at 79, https://www.ftc.gov/system/files/ftc_gov/pdf/21apr_22-23app.pdf; FTC,

Federal Trade Comm’n Strategic Plan for Fiscal Years 2022-2026 [hereinafter “FTC FY22-26 Strategic Plan”] at

24, https://www.ftc.gov/system/files/ftc_gov/pdf/fy-2022-2026-ftc-strategic-plan.pdf.

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.

Strengthening Data Security

The best way for firms to protect consumers’ data is not to collect it in the first place.

Accordingly, several recent Commission data security orders mandate restrictions on what data

firms can collect and retain. For example, our recent order against the online alcohol marketplace

Drizly, LLC requires the company to minimize the data it collects and keeps from consumers. 56

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Likewise, the settlement with online merchandise platform CafePress requires the company to

implement policies to minimize the data it collects, stores, and retains. The CafePress settlement

order also requires the company to use secure multi-factor authentication methods. 57

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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. 58 The Commission is reviewing the

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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. 59 And we

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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.

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.

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/ftc-exploresrules-cracking-down-commercial-surveillance-lax-data-security-practices.

Press Release, Fed. Trade Comm’n, FTC Strengthens Security Safeguards for Consumer Financial Information

Following Widespread Data Breaches (Oct. 27, 2021), www.ftc.gov/news-events/news/press-releases/2021/10/ftcstrengthens-security-safeguards-consumer-financial-information-following-widespread-data.

continue to review other rules, including COPPA 60 and the Health Breach Notification Rule, 61 to

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assess whether changes are necessary to better protect consumers’ data.

Ensuring Fairness for Workers, Entrepreneurs, and Small Businesses

As American workers and small businesses attempt to recover from the effects of the

pandemic, the Commission is taking a comprehensive approach—through enforcement,

rulemaking, and advocacy—to ensuring that they are not held back by unfair or deceptive

practices.

Ensuring Domestic Manufacturers Can Compete Fairly

As many firms look to onshore production and as many consumers look to buy “Made in

America” goods, the FTC is taking comprehensive action to protect the integrity of the label and

ensure a level playing field for domestic manufacturers. In 2021, the Commission finalized a rule

that prohibits the misuse of the “Made in America” label, and the Commission is already taking

action to enforce this rule. For example, in 2022, the Commission charged a manufacturer of

lithium-ion batteries with falsely labeling its products as “Made in America.” 62 And months

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later, the Commission charged a seller of falsely advertised personal protective equipment. 63 The

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FTC will use all available tools to ensure scammers face heavy consequences for lawbreaking.

Marketers making false “Made in USA” claims covered by other laws and rules that the

FTC enforces also can expect consequences. For example, in the past year we charged

Press Release, Fed. Trade Comm’n, FTC Seeks Comments on Children’s Online Privacy Protection Act Rule

(July 25, 2019), https://www.ftc.gov/news-events/news/press-releases/2019/07/ftc-seeks-comments-childrensonline-privacy-protection-act-rule.

Press Release, Fed. Trade Comm’n, FTC Seeks Comment as Part of Review of Health Breach Notification Rule

(May 8, 2020), https://www.ftc.gov/news-events/news/press-releases/2020/05/ftc-seeks-comment-part-reviewhealth-breach-notification-rule.

See United States v. Lithionics Battery, LLC, No. 8:22-cv-00868 (M.D. Fla. 2022) (imposing a civil penalty of

treble profits on sales of deceptively marketed battery products).

See United States v. Axis LED Group, LLC, No. 3:22-cv-01389 (N.D. Ohio 2022) (imposing a civil penalty and

suspended redress judgment based on sales of falsely labeled PPE and LED products).

companies with making false claims for imported textile products such as apparel and bedding. 64

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We also recently sued a manufacturer of glass baking products for continuing to advertise its

products as “Made in USA” during a shift to overseas production at the height of the

pandemic. 65 The FTC continues to carefully monitor the market for false “Made in America”

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claims and will use all available tools to ensure scammers who cheat consumers, honest

businesses, and American workers face heavy consequences for their lawbreaking.

Combatting Unfair or Deceptive Practices Affecting Gig Workers

The Commission is making clear that regardless of whether gig workers are treated as

employees or independent contractors under labor laws, they are fully protected by the FTC’s

prohibition on unfair or deceptive practices. Last year, the Commission issued a Policy

Statement highlighting how traditional principles of consumer protection and competition apply

in the gig economy, 66 and the Commission continues to investigate potential law violations and

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bring enforcement actions to ensure fairness for these workers. Earlier this year, for example, the

Commission issued a proposed order requiring HomeAdvisor to pay up to $7.2 million to

contractors who may have been harmed by deceptive claims about the quality and source of the

leads the company sells. 67 Since November 2021, the FTC has sent more than $60 million to

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See In re Lions Not Sheep Products, LLC, Docket 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, Docket No. C-4779 (Oct. 25, 2022) (imported

bedding products entering the USA pre-labeled as “Made in USA”),

https://www.ftc.gov/system/files/ftc_gov/pdf/222-3096-Electrowarmth-Decision-and-Order.pdf.

In re Instant Brands LLC, Docket No. C-4788 (Mar. 1, 2023) (imported glass measuring cups advertised as

“Made in USA”).

See FTC, Policy Statement on Enforcement Related to Gig Work (Sept. 15, 2022), https://www.ftc.gov/legallibrary/browse/policy-statement-enforcement-related-gig-work.

Proposed Order, In re HomeAdvisor, Inc., Docket No. D-9047 (Jan. 23, 2023), https://www.ftc.gov/newsevents/news/press-releases/2023/01/ftc-order-requires-homeadvisor-pay-72-million-stop-deceptively-marketing-itsleads-home-improvement.

141,000 Amazon Flex drivers who allegedly had their tips deceptively withheld. 68 And, in July

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2022, the FTC and NLRB entered a Memorandum of Understanding to facilitate collaboration

between the agencies on gig work and other labor markets. 69

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Allowing 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. 70 In the report, the Commission found “scant

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evidence” to support manufacturers’ justifications for repair restrictions. 71 The Commission

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followed this report with three major actions against companies for allegedly imposing unlawful

repair restrictions on consumers. 72 The Commission also is exploring other avenues to

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strengthen consumers’ right to repair, including by supporting state efforts 73 and seeking

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comment on whether manufacturers should be required to provide consumers with repair

instructions. 74

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Protecting Franchisees from Unfair or Deceptive Practices

The agency continues to take an integrated approach to franchise issues, undertaking both

enforcement and policy initiatives. Last year, for example, we partnered with the Department of

Press Release, Fed. Trade Comm’n, FTC Returns Nearly $60 Million to Drivers Whose Tips Were Illegally

Withheld by Amazon (Nov. 2, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/11/ftc-returnsnearly-60-million-drivers-whose-tips-were-illegally-withheld-amazon.

Press Release, Fed. Trade Comm’n, Federal Trade Commission, National Labor Relations Board Forge New

Partnership to Protect Workers from Anticompetitive, Unfair, and Deceptive Practices (July 19, 2022),

https://www.ftc.gov/news-events/news/press-releases/2022/07/federal-trade-commission-national-labor-relationsboard-forge-new-partnership-protect-workers.

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.

Id. at 6.

Press Release, Fed. Trade Comm’n, FTC Approves Final Orders in Right-to-Repair Cases Against HarleyDavidson, MWE Investments, and Weber (Oct. 27, 2022), https://www.ftc.gov/news-events/news/pressreleases/2022/10/ftc-approves-final-orders-right-repair-cases-against-harley-davidson-mwe-investments-weber.

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.

87 Fed. Reg. 64,399 (Oct. 25, 2022).

Justice (“DOJ”) to file a suit against fast-food chain BurgerIM, 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. 75 Earlier this year, the agency issued

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a Request for Information (“RFI”) related to franchise agreements and franchisor business

practices. 76 The RFI seeks information about the means by which franchisors may exert control

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over franchisees and their workers. Finally, we are coordinating closely with DOJ and the

National Labor Relations Board over labor concerns, and in December 2021 we filed an amicus

brief in a class action suit by 7-Eleven franchisees in which we successfully argued that the

FTC’s Franchise Rule does not address whether franchisees are employees under Massachusetts

law.

Shining a Light on Small Business Credit Reports

Credit reports can be make-or-break for small businesses. To better understand this

opaque market, the FTC recently voted to issue orders under Section 6(b) of the FTC Act to five

business credit reporting agencies, requiring that they provide information about: (1) how they

collect and report data on small businesses; (2) how they market their business credit reporting

products; and (3) whether and how they address factual errors in the reports. 77 The 6(b) study

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will shine a needed light on an industry that has not been reported on extensively but can be

critical to the survival of a smaller firm. It will also advance the agency’s broader effort to ensure

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.

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.

In March 2023, the FTC issued 6(b) orders to D&B, Experian Information Solutions, Equifax, Ansonia Credit

Data, and Creditsafe USA. See Press Release, Fed. Trade Comm’n, FTC Launches Inquiry into Small Business

Credit Reports (Mar. 16, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-launches-inquirysmall-business-credit-reports.

a fair shot in the marketplace for small businesses and entrepreneurs. The 6(b) study follows the

FTC’s April 2022 complaint and order with Dun & Bradstreet (“D&B”) in which the FTC

alleged, among other things, that D&B reported incorrect information about small businesses

then failed to provide a clear, consistent, and reliable way for those businesses to get

corrections. 78 D&B is now subject to an order that bars it from misrepresenting certain types of

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credit improvement products and mandates better processes for businesses to correct errors.

IV.

COMPETITION MISSION

In addition to the consumer protection and privacy work discussed above, the FTC

enforces the competition laws in many crucial sectors of our economy. Our competition mission

is driven by the tenet that vigorous antitrust enforcement is critical to the growth and dynamism

of our economy as well as to our shared prosperity and liberty. Recent decades, however, have

vividly illustrated how Americans lose out when markets become more consolidated and less

competitive. Prices rise, wages fall, and our markets become more fragile and less resilient.

These effects have been on full display over the last few years, as supply shocks stemming from

the pandemic and contaminated products have led to severe shortages and steep price hikes. In

light of these troubling realities, the FTC has been reassessing how we can enforce the antitrust

laws to maximize our efficacy. This effort includes utilizing the full range of our competition

authority, ensuring that our merger review fully captures a deal’s potential for harm, rethinking

our approach to remedies, and targeting the root causes of competitive harm. Although this

process is ongoing, as detailed below, we are proud of the significant accomplishments we have

already made on this front.

Decision and Order, In re Dun & Bradstreet, Docket No. C-4761,

https://www.ftc.gov/system/files/ftc_gov/pdf/172%203196%20Dunn%20and%20Bradstreet%20combined%20pack

age%20unsigned_0.pdf.

Using the FTC’s Congressionally Provided Authorities

When Congress created the FTC, it gave the agency a wide range of authorities to combat

unfair methods of competition. To ensure the Commission is faithfully discharging its statutory

obligations, the FTC has renewed its commitment to use its entire suite of authorities to

maximize the agency’s impact and faithfully execute the agency’s mission.

Notably, the Commission issued a policy statement outlining the scope of Section 5 of

the FTC Act, an authority Congress provided to the FTC to combat harmful and unfair conduct

that lies outside the boundaries of the Sherman Act. 79 The policy statement lays out key

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principles for determining whether a business practice constitutes an unfair method of

competition, including conduct that “may be coercive, exploitative, collusive, abusive, deceptive,

predatory, or involve the use of economic power of a similar nature.” 80 The FTC used this

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authority to bring cases that resulted in three companies and two individuals dropping

noncompete restrictions that they imposed on thousands of workers. According to the FTC

complaints, these noncompete restrictions barred workers from seeking or accepting work with

another employer or operating a competing business after they left the company. 81 These actions

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mark the first time the agency has challenged the use of noncompete restrictions for workers in

positions ranging from low-wage security guards to manufacturing workers to engineers.

Reactivating the Commission’s competition rulemaking authority under Section 6(g) of

the FTC Act is another example of this effort. In January, the Commission proposed a rule that

FTC, Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of The Federal

Trade Commission Act (2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyStatement.pdf.

Id.

Press Release, Fed. Trade Comm’n, FTC Cracks Down on Companies That Impose Harmful Noncompete

Restrictions on Thousands of Workers (Jan. 4, 2023), https://www.ftc.gov/news-events/news/pressreleases/2023/01/ftc-cracks-down-companies-impose-harmful-noncompete-restrictions-thousands-workers; Press

Release, Fed. Trade Comm’n, FTC Takes Action Against Another Company That Imposed Harmful Noncompete

Restrictions on its Workers (Mar. 15, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/03/ftctakes-action-against-another-company-imposed-harmful-noncompete-restrictions-its-workers.

would ban employers from imposing noncompete restrictions on workers in all but a limited set

of circumstances. 82 Substantial evidence shows that noncompete restrictions are reducing the

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competitiveness of labor markets and depriving businesses of a talent pool that they need to

enter, build, and/or expand. Moreover, the FTC estimates that the new proposed rule could

increase wages by nearly $300 billion per year and expand career opportunities for about 30

million Americans. The Commission is taking extensive steps to inform the public about the

proposed rule to ensure that all viewpoints are heard during the public comment period and will

consider the input collected on the record before determining how to proceed. 83

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Prioritizing Vigorous Merger Enforcement to Combat Consolidation

Together, the FTC and the DOJ represent the American people’s front-line defense

against unlawful consolidation, and the work we do to prevent that consolidation is critically

important. Our staff has worked tirelessly to meet the enormous demand of enforcing the laws

against unlawful mergers, even as Commission resources have been strained by the

unprecedented scale, volume, and complexity of mergers in recent years. Against this backdrop,

the FTC remains committed to challenging unlawful deals. Consistent with that, over the past 16

months, the FTC has moved to challenge major transactions in critical sectors of the economy,

including semiconductors, defense, energy, healthcare, mortgage technology, and digital

Press Release, Fed. Trade Comm’n, FTC Proposes Rule to Ban Noncompete Clauses, Which Hurt Workers and

Harm Competition (Jan. 5, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-proposesruleban-noncompete-clauses-which-hurt-workers-harm-competition.

On February 16, 2023, the FTC hosted a public forum to provide an opportunity for people to directly share their

experiences with noncompetes. See FTC, FTC Forum Examining Proposed Rule to Ban Noncompete Clauses (Feb.

16, 2023), https://www.ftc.gov/news-events/events/2023/02/ftc-forum-examining-proposed-rule-ban-noncompeteclauses.

markets. 84 This includes filing suit to block eight mergers outright, 85 as well as eleven other

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anticompetitive mergers that parties have abandoned after the agency indicated competition

concerns but before it filed a complaint. 86

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The Commission is particularly concerned about mergers that may cause significant

economywide harm. Just last month, the Commission challenged a $13.1 billion merger between

the two leading providers of mortgage technology, Intercontinental Exchange, Inc. (“ICE”) and

Black Knight. 87 The FTC’s complaint alleges that the merger would eliminate competition

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between the merging parties for certain key mortgage processing platforms and tools used by

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.

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/press-releases/2023/03/ftc-acts-blockdeal-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/newsevents/news/press-releases/2022/12/ftc-seeks-block-microsoft-corps-acquisition-activision-blizzard-inc; Press

Release, Fed. Trade Comm’n, FTC Seeks to Block Virtual Reality Giant Meta’s Acquisition of Popular App Creator

Within (July 27, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/07/ftc-seeks-block-virtualreality-giant-metas-acquisition-popular-app-creator-within; 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/press-releases/2022/06/ftc-sues-block-merger-between-utah-healthcarerivals-hca-healthcare-steward-health-care-system; Press Release, Fed. Trade Comm’n, FTC Sues to Block Merger

Between New Jersey Healthcare Rivals RWJBarnabas Health and Saint Peter’s Healthcare System (June 2, 2022),

https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-sues-block-merger-between-new-jerseyhealthcare-rivals-rwjbarnabas-health-saint-peters; Press Release, Fed. Trade Comm’n, FTC and Rhode Island

Attorney General Step in to Block Merger of Rhode Island’s Two Largest Healthcare Providers (Feb. 17, 2022),

https://www.ftc.gov/news-events/news/press-releases/2022/02/ftc-rhode-island-attorney-general-step-block-mergerrhode-islands-two-largest-healthcare-providers; Press Release, Fed. Trade Comm’n, FTC Sues to Block Lockheed

Martin Corporation’s Vertical Acquisition of Aerojet Rocketdyne Holdings Inc. (Feb. 15, 2022),

https://www.ftc.gov/news-events/news/press-releases/2022/01/ftc-sues-block-lockheed-martin-corporations-44billion-vertical-acquisition-aerojet-rocketdyne; Press Release, Fed. Trade Comm’n, FTC Sues to Block $40 Billion

Semiconductor Chip Merger (Dec. 2, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/12/ftc-suesblock-40-billion-semiconductor-chip-merger.

See, e.g., Press Release, Fed. Trade Comm’n, Expected Federal Trade Commission Opposition to Transaction

Leads Great Outdoors Group, LLC and Rival Sportsman’s Warehouse Holdings, Inc. to Abandon Plans for

Proposed Merger (Dec. 3, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/12/expected-federaltrade-commission-opposition-transaction-leads-great-outdoors-group-llc-rival.

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/press-releases/2023/03/ftc-acts-blockdeal-combining-two-top-mortgage-loan-technology-providers.

lenders to secure the best interest rates for customers, leading to higher prices for lenders and

homebuyers. 88

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The FTC is focused on fully scrutinizing all of the ways in which mergers can harm

competition. Central to this effort is prioritizing consideration of both non-horizontal and

forward-looking competitive harm. This approach is being incorporated into FTC merger review

generally and has been reflected in several recent merger challenges, including those in the hightech, semiconductor, and defense markets.

For example, in December 2022, the FTC sued to stop Microsoft Corp. from acquiring

leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises

such as Call of Duty and World of Warcraft, alleging that the $69 billion deal would enable

Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing

subscription content and cloud-gaming business. 89 The FTC’s complaint points to Microsoft’s

88F

record of acquiring and using gaming content to suppress competition from rival consoles.

Currently, Activision is one of only a small number of top video game developers that create

video games for multiple devices, including video game consoles, and it has pursued a strategy

of offering its games on many devices as well as to subscription and cloud-gaming services,

according to the complaint. After the merger, the complaint alleges, Microsoft would have both

the means and the motive to harm competition by manipulating Activision’s pricing, degrading

player experience on rival consoles or services, changing the terms of access to Activision

games, or withholding content from competitors entirely, resulting in harm to consumers. The

trial is scheduled to begin in August.

Id.

See FTC Seeks to Block Microsoft Corp.’s Acquisition of Activision Blizzard, Inc., supra note 85.

The FTC’s suit to stop U.S. chip supplier Nvidia’s proposed $40 billion acquisition of

U.K. chip design provider Arm is another example of an FTC merger challenged focus on nonhorizontal harm. 90 The complaint alleged that the proposed merger would have given one of the

89F

largest chip companies control over its rivals’ designs for competing chips. By doing so, the

FTC’s complaint alleged that the combined firm would have had the means and incentive to

stifle next-generation technologies, including those used to run datacenters and driver-assistance

systems in cars. More than two months into its litigation with the FTC, Nvidia abandoned its

acquisition of Arm—representing the first abandonment of a litigated vertical merger in many

years. Blocking the deal preserved competition for key technologies and safeguarded future

innovation while also preventing further disruption to an already distressed semiconductor

supply chain.

And the FTC’s increased focus on non-horizontal harm played a role in ensuring that our

military continues to benefit from competition for crucial equipment. Last year, the FTC voted on a

bipartisan basis to file a lawsuit to block Lockheed’s proposed acquisition of Aerojet, a $4.4 billion

defense merger that would have eliminated the country’s only remaining independent supplier of key

missile propulsion inputs and given Lockheed the ability to cut off its competitors’ access to these

critical components. 91 The FTC’s investigation, conducted in close collaboration with the

90F

Department of Defense, determined that the deal would have resulted in higher prices and diminished

quality and innovation for programs critical to our national security. This challenge dovetailed with a

See FTC Sues to Block $40 Billion Semiconductor Chip Merger, supra note 85.

Press Release, Fed. Trade Comm’n, Statement Regarding Termination of Lockheed Martin Corporation’s

Attempted Acquisition of Aerojet Rocketdyne Holdings Inc. (Feb. 15, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/02/statement-regarding-termination-lockheed-martin-corporations-attemptedacquisition-aerojet.

DoD report indicating that consolidation within the defense-industrial base poses a risk to national

defense and identifying strong merger enforcement as a key tool to address it. 92

91F

The FTC also prioritizes its Congressional mandate to arrest monopolies in their

incipiency, an important effort to stop mergers before markets are dominated by only a few

firms. This is demonstrated, in particular, by the FTC’s July 2022 challenge to Meta’s proposed

acquisition of Within Unlimited. 93 As alleged in the complaint, social-media firm Meta has

92F

become the largest provider of virtual reality devices and a leading provider of related apps in the

U.S., while Within is an independent virtual reality development studio that designed and built

Supernatural, a popular app in the dedicated fitness virtual reality app market. The complaint

alleged that, prior to the acquisition, Meta was a potential entrant in the virtual reality dedicated

fitness app market with the required resources and a reasonable probability of building its

own virtual reality app to compete in the space. While the court did not block the companies

from consummating their deal, it did endorse a key theory that provides a pathway for

challenging other mergers that eliminate a potential competitor. 94

93F

The Commission also remains committed to stopping harmful mergers between direct

competitors, especially in markets for healthcare services. 95 Those mergers threaten patients with

94F

Dep’t of Defense, Off. of the Under Secretary of Defense for Acquisition and Sustainment, State of Competition

Within the Defense Industrial Base (Feb. 15, 2022), https://media.defense.gov/2022/Feb/15/2002939087/-1/1/1/state-of-competition-within-the-defense-industrial-base.pdf.

See FTC Seeks to Block Virtual Reality Giant Meta’s Acquisition of Popular App Creator Within, supra note 85.

See FTC v. Meta Platforms Inc., No. 5:22-cv-04325 (N.D. Cal. Feb. 3, 2023).

See, e.g., FTC Sues to Block Merger Between Utah Healthcare Rivals HCA Healthcare and Steward Health Care

System, supra note 85; FTC Sues to Block Merger Between New Jersey Healthcare Rivals RWJBarnabas Health

and Saint Peter’s Healthcare System, supra note 85. 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 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-regarding-termination-attemptedmerger-rhode-islands-two-largest-healthcare-providers.

higher cost and lower quality care 96 and healthcare workers with lower wages and poorer

95F

working conditions. 97 For example, on the same day in June 2022, the Commission voted to

96F

block two proposed hospital mergers: HCA’s acquisition of Steward Health Care System 98 and

97F

RWJBarnabas’s acquisition of Saint Peter’s Healthcare System. 99 The FTC will continue to

98F

identify and challenge hospital mergers that threaten access to critical healthcare services.

The FTC also takes seriously its mandate to enforce federal premerger reporting

requirements under the Hart-Scott-Rodino Act. Just last week, the Commission sued to stop

Louisiana Children’s Medical Center from integrating three competing hospitals in the New

Orleans area that it recently acquired from HCA Healthcare, Inc., alleging the parties defied

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).

See, e.g., Elena Prager & Matt Schmitt, Employer Consolidation and Wages: Evidence from Hospitals, 111 AM.

ECON. REV. 397 (2021); Daniel Arnold & Christopher Whaley, Who Pays for Health Care Costs? The Effects of

Health Care Prices on Wages (RAND Health Care Working Paper, 2021),

https://www.ehealthecon.org/pdfs/Whaley.pdf. The Commission laid out much of this empirical evidence in a recent

policy paper highlighting the pitfalls of Certificates of Public Advantage (COPAs), which are efforts by states to

replace beneficial healthcare competition with state oversight, that have proven to be detrimental for patient costs,

quality, and reduced employee wages. Press Release, Fed. Trade Comm’n, FTC Policy Paper Warns About Pitfalls

of COPA Agreements for Patient Care and Healthcare Workers (Aug. 15, 2022), http://www.ftc.gov/newsevents/news/press-releases/2022/08/ftc-policy-paper-warns-about-pitfalls-copa-agreements-patient-care-healthcareworkers. Recently, two hospital systems abandoned their proposed merger after the FTC raised concerns with the

New York State Department of Health, voicing opposition to the granting of a COPA that would immunize the deal

from antitrust scrutiny. See Press Release, Fed. Trade Comm’n, Statement of Elizabeth Wilkins, Director of the

FTC’s Office of Policy Planning, on the Decision of SUNY Upstate Medical University and Crouse Health System,

Inc., to Drop Their Proposed Merger (Feb. 16, 2023), https://www.ftc.gov/news-events/news/pressreleases/2023/02/statement-elizabeth-wilkins-director-ftcs-office-policy-planning-decision-suny-upstate-medical.

See FTC Sues to Block Merger Between Utah Healthcare Rivals HCA Healthcare and Steward Health Care

System, supra note 85.

See FTC Sues to Block Merger Between New Jersey Healthcare Rivals RWJBarnabas Health and Saint Peter’s

Healthcare System, supra note 85.

federal law by consummating the $150 million acquisition without reporting it to U.S. antitrust

authorities and without observing the mandatory waiting period. 100

99F

As a complement to this strengthened merger enforcement, the FTC is also reassessing

the efficacy of its approach to merger remedies and identifying how to learn from lessons of the

past. Specifically, we strongly disfavor behavioral remedies and will not hesitate to reject

proposed divestitures that past experience has taught us cannot fully cure the underlying harm.

For example, the FTC rejected a remedy proposal from the parties in challenging the merger

between ICE and Black Knight, discussed above. 101 The FTC’s complaint alleges, among other

100F

things, that Black Knight’s proposed remedy would not transfer a freestanding business, creates

an ongoing risk of continuing entanglements between the divested assets and the merged entity,

and fails to fully address the anticompetitive effects likely to result from the merger. American

consumers should not be forced to bear the risk of remedies that fail to maintain competition.

Targeting Anticompetitive Conduct for Maximum Impact

Despite a heavy merger workload, the FTC continues to maintain and develop a robust

program to identify and stop anticompetitive conduct outside of the merger context. Specifically,

the FTC is orienting its limited enforcement resources around targeting and rectifying root

causes of anticompetitive conduct to avoid a whack-a-mole approach that imposes significant

enforcement burden with few long-term benefits. We are also ensuring that our work is tackling

the most significant harms across markets, particularly by dominant firms whose business

practices affect many Americans.

Press Release, Fed. Trade Comm’n, FTC Sues to Stop the Potentially Illegal Integration of New Orleans Area

Hospitals Over Failure to Follow Federal Reporting Law (Apr. 20, 2023), https://www.ftc.gov/newsevents/news/press-releases/2023/04/ftc-sues-stop-potentially-illegal-integration-new-orleans-area-hospitals-overfailure-follow-federal-reporting-law.

101

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/press-releases/2023/03/ftc-acts-blockdeal-combining-two-top-mortgage-loan-technology-providers.

100

As part of this strategy, 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,

network externalities, moat-building strategies, and other key factors to ensure that our

enforcement is reflecting commercial realities.

Notably, the FTC continues to prosecute its complaint against Facebook (now Meta) in a

lawsuit that, in addition to other forms of relief, seeks the divestment of Instagram and

WhatsApp. 102 The FTC’s amended complaint highlights the competitive importance of data and

101F

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. 103

102F

The Commission is also committed to preventing the abuse of monopoly power that

harms American farmers. In September 2022, the Commission and a bipartisan coalition of ten

state attorneys general charged 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. 104 The complaint alleges that Syngenta Crop

103F

Protection and Corteva, Inc. rely on pay-to-block schemes in which distributors get paid only if

they limit their dealings with competing manufacturers. The primary legal issue in this case is

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.

103

FTC v. Facebook, Inc., 581 F. Supp. 3d 34 (D.D.C. 2022).

104

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.

102

whether the antitrust laws bar firms from extending their patent monopolies through these payto-block schemes that restrict distributors from buying cheaper generic products. 105 But for

104F

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

products they have to buy. This case is pending in federal court in North Carolina. 106

105F

FTC 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 Commission has also issued Requests

for Information.

One focus of Commission research and policy has been healthcare markets. For example,

last June, the Commission authorized a 6(b) study of the contracting practices of pharmacy

benefits managers (“PBMs”). 107 This comprehensive study will shine a light on the opaque

106F

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).

106

See FTC v. Syngenta Crop Protection AG, et al., No. 1:22-cv-00828 (M.D.N.C.).

107

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

105

operations of these large pharmacy middlemen who can dictate the pricing and access to lifesaving drugs for so many Americans. The Commission also issued an RFI last year relating to

the infant formula crisis, 108 and we hope to report soon on what we learned.

107F

The Commission is also working to complete a report from its 6(b) study of ongoing

supply chain disruptions. 109 As the recent shortage of baby formula illustrates, in industries

108F

dominated by a few large suppliers, a single plant closure can have ripple effects throughout the

supply chain, leaving some Americans struggling to find essential products. In response, the

Commission used its 6(b) authority to order nine large retailers, wholesalers, and consumer

goods suppliers to provide detailed information needed to better understand both the factors that

have contributed to supply chain disruptions and how they may have contributed to bottlenecks,

shortages, anticompetitive practices, or rising consumer prices. We are endeavoring to complete

this timely study as quickly as possible.

Just last month, the Commission announced a new RFI on cloud computing. 110 The

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Commission is gathering information to inform our understanding of key features of cloud

computing; the potential for outages from large cloud providers to have widespread impact on

large parts of the economy that rely on them; security risks; and issues related to market power

and business practices affecting competition.

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.

108

Press Release, Fed. Trade Comm’n, Federal Trade Commission Launches Inquiry Into Infant Formula Crisis

(May 24, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/05/federal-trade-commission-launchesinquiry-infant-formula-crisis.

109

Press Release, Fed. Trade Comm’n, FTC Launches Inquiry Into Supply Chain Disruptions (Nov. 29, 2021),

https://www.ftc.gov/news-events/news/press-releases/2021/11/ftc-launches-inquiry-supply-chain-disruptions.

110

Press Release, Fed. Trade Comm’n, An Inquiry into Cloud Computing Business Practices: The Federal Trade

Commission is seeking public comments (Mar. 22, 2023), https://www.ftc.gov/news-events/news/pressreleases/2023/03/ftc-seeks-comment-business-practices-cloud-computing-providers-could-impact-competition-data.

Collaboration Across Government to Promote Competition

The FTC recognizes the value and importance of deepening our collaboration and

partnerships with other government entities. These relationships act as force multipliers to

promote fair competition throughout our economy.

Collaborating with other federal agencies ensures we are benefiting from expertise across

government, drawing on industry-specific knowledge, and in turn helping equip other agencies to

diagnose and address competition problems more directly. Consistent with this “whole-ofgovernment” approach to competition, the Commission provided input to several key reports,

adding our perspective on issues affecting competition in a wide range of markets. 111 In July

110F

2022, the FTC entered into an agreement with the National Labor Relations Board that lays out

how the two agencies will work together on key issues such as labor market concentration, onesided contract terms, and labor developments in the “gig economy.” 112 Overall, these

111F

collaborations have deepened our relationships with sector regulators, providing a basis for

future coordination and cooperation.

Other opportunities for deepening our partnerships lie with both the state attorneys

general and in the international arena. We regularly engage with our state and international

enforcement partners on both policy initiatives as well as enforcement matters. This includes

filing cases jointly with state attorneys general 113 as well as cooperation on many matters with

112F

See, e.g., Dep’t of Treasury, Competition in the Markets for Beer, Wine, and Spirits (Feb. 2022),

https://home.treasury.gov/system/files/136/Competition-Report.pdf.

112

Press Release, Fed. Trade Comm’n, Federal Trade Commission, National Labor Relations Board Forge New

Partnership to Protect Workers from Anticompetitive, Unfair, and Deceptive Practices (July 19, 2022),

http://www.ftc.gov/news-events/news/press-releases/2022/07/federal-trade-commission-national-labor-relationsboard-forge-new-partnership-protect-workers.

113

See, e.g., FTC and Rhode Island Attorney General Step in to Block Merger of Rhode Island’s Two Largest

Healthcare Providers, supra note 85; Press Release, Fed. Trade Comm’n, FTC and NY Attorney General Charge

Vyera Pharmaceuticals, Martin Shkreli, and Other Defendants with Anticompetitive Scheme to Protect a List-Price

Increase of More than 4,000 Percent for Life-Saving Drug Daraprim (Jan. 27, 2020), https://www.ftc.gov/newsevents/news/press-releases/2020/01/ftc-ny-attorney-general-charge-vyerapharmaceuticals-martin-shkreli-otherdefendants-anticompetitive.

111

foreign antitrust agencies. 114 Given the reality of limited resources, these partnerships are even

113F

more critical as we learn and benefit from the experience of our domestic and overseas

counterpart agencies.

ENHANCING THE COMMISSION’S TECHNICAL EXPERTISE

In February, the FTC announced the launch of a new Office of Technology (OT) to

support the agency’s law enforcement and policy work. Led by our Chief Technology Officer,

this office offers critical in-house technical expertise, enabling the Commission to keep pace

with technological challenges in the digital marketplace. This office houses staff with skills and

expertise across software engineering, human-computer interaction design, data science, and

product management. Subject matter expertise will range across topics such as security and

privacy, digital markets, augmented and virtual reality, automated decision making, the gig work

economy, and ad-tracking technologies.

OT will work across the FTC to ensure that the agency can move swiftly and with

sophistication on a wide range of issues implicating technology across the agency, with the

following three mandates: First, to strengthen and support law enforcement investigations and

actions. OT supports investigations into business practices and the technologies underlying them;

develops investigative techniques; aids in the crafting of effective Civil Investigative Demands;

aids in the review and analysis of data and documents received in investigations; supports the

development of case theories and analysis; and advises on the creation of effective remedies.

Where appropriate, OT will support litigation teams by serving as, or by helping to identify,

This includes our review of the now-abandoned merger between Nvidia and Arm, where we cooperated closely

with agencies in many jurisdictions, including the European Union, Japan, South Korea, and the United Kingdom.

FTC Sues to Block $40 Billion Semiconductor Chip Merger, supra note 85.

114

expert witnesses. This behind-the-scenes work is OT’s principal mission and is critical to the

Commission’s ability to address the rapidly changing digital marketplace.

Second, OT advises and engages with FTC staff and the Commission on policy and

research initiatives. OT’s technological expertise is routinely integrated into non-enforcement

agency actions, including 6(b) studies, reports, requests for information, research, policy

statements, and policy deliverables. OT offers a unique cross-bureau perspective on emerging

technologies and industries, exemplified by its involvement with the Cloud Computing RFI,

which identified significant competition and consumer protection issues for further study. 115

114F

Technologists provide strategic guidance on technology matters through report recommendations

and participate in engagement with regulatory counterparts in partnership with the Office of

International Affairs.

Third, OT engages the public and relevant experts to understand trends and to advance

the Commission’s work. OT will be uniquely suited to proactively engage with external

stakeholders to identify emerging technologies that implicate the Commission’s consumer

protection and competition mandates and to use these findings to advance the Commission’s

work. This can be done through mechanisms such as formal workshops, research conferences,

and briefings or consultations. 116 OT can also draw on the combined authority of its expertise

115F

See FTC Office of Technology, An Inquiry into Cloud Computing Business Practices: The Federal Trade

Commission is Seeking Public Comments (Mar. 22, 2023) (seeking information about competition and data security,

among other things), https://www.ftc.gov/policy/advocacy-research/tech-at-ftc/2023/03/inquiry-cloud-computingbusiness-practices-federal-trade-commission-seeking-public-comments. See also FTC Docket ID FTC-2023-0028,

Solicitation for Public Comments on the Business Practices of Cloud Computing Providers (Mar. 22, 2023),

https://www.regulations.gov/docket/FTC-2023-0028.

116

See, e.g., FTC Office of Technology, Lurking Beneath the Surface: Hidden Impacts of Pixel Tracking (Mar. 16,

2023) (identifying research questions arising out of the technology at issue in recent privacy settlements),

https://www.ftc.gov/policy/advocacy-research/tech-at-ftc/2023/03/lurking-beneath-surface-hidden-impacts-pixeltracking.

115

and the stature of the Commission to engage the public and relevant experts to highlight key

trends and encourage best practices.

VI.

CONCLUSION

The FTC continues to seek to fulfill its broad mission using the range of tools Congress

afforded us. The agency will continue to anticipate and respond to changes in the marketplace

and adapt as needed.

Additional resources from Congress would allow us to better ensure open, competitive,

and fair markets on behalf of consumers, workers, and honest businesses. We look forward to

continuing to work with the Subcommittee and Congress, and I am happy to answer your

questions.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.