On December 20, 2019, the Federal Trade Commission (FTC) sued FleetCor Technologies, Inc., a fuel card marketer, and Ronald Clark, its CEO, in the Northern District of Georgia. The FTC lawsuit alleges that FleetCor charged customers hundreds of millions of dollars in hidden fees, making its promises about helping customers save on fuel costs false. The Defendants market various payment cards, including fuel cards, to companies in the trucking and commercial fleet industry. While the FTC interprets its authority to cover businesses, as it chose to do here, it does not often do so. The FTC’s vote to authorize the filing of the complaint was 4-1, with Commissioner Wilson voting no, and Commissioner Philips voting yes, but dissenting on the inclusion of Clarke as an individual defendant. In its complaint, the FTC cited numerous actions of the CEO that allegedly showed his awareness of FleetCor’s deceptive practices. FleetCor issued its own press release in response to the FTC’s suit denying the allegations.

According to the FTC, FleetCor made three main claims to customers: (1) its customers will save money; (2) the fuel cards utilize fraud controls to protect against unauthorized transactions; and (3) the cards have no set-up, transaction, or membership fees. Despite these promises, FleetCor allegedly charged customers hundreds of millions of dollars for unexpected fees and recurring fees for programs its customers never ordered.


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In recent days, the ghost of cases past returns to haunt the FTC’s ability to obtain equitable monetary relief under Section 13(b) of the FTC Act. Three cases now pending Supreme Court review have the potential to significantly threaten the FTC’s enforcement authority: Liu v. SEC; FTC v. AMG Capital Management, LLC; and FTC v. Credit Bureau Center, LLC. Given the unique posture of each case, in perspective with one another, the Court has the opportunity to, at the least, provide guidance, and at most, directly decide, whether Section 13(b) allows for such relief.

The Supreme Court is set to hear oral argument on March 3, 2020 in Liu v. SEC, which will resolve whether the Securities and Exchange Commission (“SEC”) can obtain disgorgement under federal securities statutes or whether that remedy is a penalty and not an equitable remedy. Though Liu does not directly implicate Section 13(b) of the FTC Act, the securities statutes at issue are similar to Section 13(b) of the FTC Act, according to, at least, the Solicitor General of the United States.


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Influencers, if you ever wished you had a handy brochure on how to make proper disclosures in your sponsored posts, you are in luck. On Tuesday, the FTC issued a new guide titled “Disclosures 101 for Social Media Influencers,” along with three videos, that lays out the agency’s guidelines for when and

Law enforcement, workshops, and reports from the Federal Trade Commission (FTC) have yielded five “lessons” for lead generation advertisers, according to an article that was published last month in Law360 by Andrew Smith, director of the FTC Bureau of Consumer Protection. In it, he suggests that companies that purchase lead generation advertising must manage lead generators responsibly, just like manufacturers that make supply chain management a top priority.

The article drew attention from members of the lead generation advertising sector and their lawyers and compliance departments. Some commentators called it a tutorial on how to reduce risk in using lead generation advertising. For others the article was a cautionary tale of recent enforcement actions taken against a buyer of lead generation advertising and the lead generators spotlighted in the article. In any event, the article was certainly reflective of the FTC’s work in the lead generation area and reminder of the importance of legal compliance in the lead generation ecosystem.

According to Smith: “The complexity of the lead generation ecosystem isn’t a shield against liability, nor does it exempt you from honoring fundamental consumer protection principles. Advertisers should take the lead in ensuring the leads they use weren’t the product of deception.”


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On September 18, 2019, the FTC prevailed in its long-waged battle against Hi-Tech Pharmaceuticals. In a per curiam opinion, the Eleventh Circuit affirmed the district court’s decision, holding the defendants in contempt for violating the court’s prior order, which enjoined the defendants from making certain claims about health products without “competent and reliable scientific evidence.” Fed. Trade Comm’n v. Nat’l Urological Grp., Inc., No. 17-15695, 2019 WL 4463503, at *1 (11th Cir. Sept. 18, 2019). The Eleventh Circuit also upheld a $40 million sanction for the defendants’ violation of the order. The case provides a good example of how the FTC views substantiation for dietary supplement claims and the consequences of lacking that substantiation.

In its ruling, the Eleventh Circuit affirmed the district court’s stringent interpretation of “competent and reliable scientific evidence” to mean randomized controlled trials (“RCTs”) because the defendants had fair (and repeated) notice for nearly a decade that the FTC and the district court interpreted “competent and reliable scientific evidence” to mean RCTs.


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The Federal Trade Commission’s “Negative Option Rule” is up for review, and the FTC is steering toward stricter regulations for automatic renewal plans and subscription programs. The FTC completed its last regulatory review of the Negative Option Rule in 2014 and decided then to retain the rule in its current form. But, will this time be different?

The Rule Under Review

The rule under review is the “Rule Concerning the Use of Prenotification Negative Option Plans,” also referred to as the “Negative Option Rule.” However, the scope of the Negative Option Rule only covers prenotification plans, like book-of-the-month clubs, where the seller sends notice of a book to be shipped and charges for the book only if the consumer takes no action to decline the offer, such as sending back a postcard or rejecting the selection through an online account.


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The Federal Trade Commission held a workshop yesterday in Washington, D.C., to discuss possible updates to the COPPA Rule, which implements the Children’s Online Privacy Protection Act (“COPPA”). COPPA was originally enacted in 1998 and regulates the way entities collect data and personal information online from children under the age of 13. The Rule hasn’t been updated since 2013, and the intervening years have produced seismic technological advances and changes in business practices, including changes to platforms and apps hosting third-party content and marketing targeting kids, the growth of smart technology and the “Internet of Things,” educational technology, and more.

For the most part, FTC staff moderators didn’t tip their hand as to what we can expect to see in a proposed Rule revision. (One staff member was the exception, whose rapid-fire questions offered numerous counterpoints to industry positions, so much so that the audience would be forgiven for thinking they were momentarily watching oral argument at the Supreme Court.) Brief remarks from Commissioners Wilson and Phillips staked out their positions more clearly, but their individual views were so different that they too offered little assistance in predicting what a revised Rule may look like. Commissioner Wilson opened the workshop by sharing her own experience as a parent trying to navigate and supervise the games, apps and toys played by her children, and emphasized the need for regulation to keep up with the pace of technology to continue protecting children online. Commissioner Phillips also referred to his children at one point, but his remarks warned against regulation for regulation’s sake, flagged the chilling effect on content creation and diversity when businesses are saddled with greater compliance costs, and advocated a risk-based approach.


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Many in the industry are familiar with the following scenario. A young gamer, grinding tirelessly for untold hours perfecting her skill, honing her strategy, finally qualifies for an esports tournament. For that gamer, the true hard work begins after qualification. She now has to try to convince her parents to agree to let her participate, which may include travel (though compensated) to a far off location. In many cases, the first time the parents become aware that their child even entered a tournament (much less won an all-expense paid trip to an esports tournament) is this conversation—after the child has already been offered compensation to travel to and compete in the tournament.

If you are a game publisher, tournament organizer, or otherwise involved in the logistical chain of events described herein, there may be a big problem. The collection and use of data provided by children is regulated in the United States by the Children’s Online Privacy Protection Act (“COPPA”). COPPA is designed to protect the privacy of children by establishing certain requirements for websites that market to children. Most notably, COPPA requires website operators to obtain “verifiable parental consent” before collecting personal information from children. The FTC operates under the assumption that if children are the target demographic for a website, the website must assume that the person accessing the website is a child, and proper consent must be obtained. This assumption exists even if the website did not start with children as the target audience.


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Being able to advertise your product as “Made in the USA” can be a key advantage to marketers and is an attribute that is important to many consumers. Aware of this, the FTC has been on the watch for deceptive Made in the USA claims. Last week, the FTC held a workshop on “Made in the USA” claims to consider consumer perception of these claims and the need for any changes to the existing guidance provided by the FTC.

Current FTC guidance on these claims stems from a 1997 FTC Enforcement Policy Statement in which the FTC concluded consumers are likely to understand an unqualified U.S. origin claim to mean that the advertised product is made in the USA with “all or virtually all” of the components made in the United States.


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Last week, the Federal Trade Commission (FTC) announced a $1.76 million settlement with Truly Organic, Inc. and its founder and CEO Maxx Harley Appelman regarding false “organic” claims. This is the first time the FTC has obtained monetary relief for deceptive “organic” claims, and the buzz around this settlement signals it may not be the last. The Commissioners’ vote was unanimous, and Commissioner Rohit Chopra released a statement in support of the settlement calling for the FTC to issue a Policy Statement setting forth the Commission’s approach to enforcement in cases involving dishonesty or fraud.

Truly Organic is a bath and beauty retailer that makes and sells a variety of personal care products, including hair care products, body washes, lotions, baby products, and cleaning products. As the brand name suggests, Truly Organic markets its products as wholly organic or certified organic in compliance with the United States Department of Agriculture’s (USDA’s) National Organic Program (NOP), the program that enforces national standards for organically produced agricultural products. Truly Organic conveyed the organic theme through a variety of claims, including “100% organic,” “truly organic,” “certified organic,” and “USDA certified organic.” The company also claimed its products were “vegan.”


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