Federal Trade Commission

The Federal Trade Commission and Amazon have agreed to end appeals related to 2016’s court findings that the company billed consumers for unauthorized in-app charges incurred by children, paving the way for affected consumers to seek refunds from the online retailer shortly. A federal district court found in April 2016 that Amazon billed consumers for unauthorized in-app charges incurred by children using mobile apps such as online games downloaded through the company’s app store. The court found that Amazon failed to get parents’ consent for in-app charges made by their children. In that same ruling, the court also denied the FTC’s request for an injunction that would have forbidden Amazon from similar conduct in the future.

The FTC appealed the denial of the injunction, and Amazon then cross-appealed the court’s ruling that the company had violated the law. The district court stayed its order requiring Amazon to begin offering refunds to injured consumers while the appeals were pending. The decision by the FTC and Amazon to end their litigation will allow the refund process to begin shortly. More than $70 million in in-app charges made between November 2011 and May 2016 may be eligible for refunds. Details on the refund program, which Amazon will operate, will be announced shortly.

In a study released March 3, the Federal Trade Commission’s Office of Technology Research and Investigation (OTech) reports that most major online businesses are using proper email authentication technology to prevent phishing e-mails, but few of these businesses are taking full advantage of the latest technologies to combat phishing.

Phishing is a type of online scam that targets consumers by sending them an e-mail that appears to be from a well-known source such as an internet service provider, a bank, or a mortgage company. It asks the consumer to provide personal identifying information, and then the scammer uses the information to open new accounts or invade the consumer’s existing accounts.

Federal Trade Commission Acting Chairman Maureen Ohlhausen announced that she has appointed Thomas Pahl, a partner at the Washington, DC law firm of Arnall Golden Gregory LLP, to be the Acting Director of the FTC’s Bureau of Consumer Protection. Pahl is rejoining the FTC, having served in a number of different roles starting in 1990, including management stints in the FTC’s Bureau of Consumer Protection as Assistant Director in the Division of Advertising Practices and the Division of Financial Practices. He also advised top agency officials on consumer protection matters.

For three years, he advised Reagan appointee and FTC Commissioner Mary Azcuenaga. And he later served for four years as an attorney advisor for Republican FTC Commissioner Orson Swindle. Pahl previously served a detail to the United States Senate Judiciary Committee under the leadership of Chairman Orrin Hatch, focusing on antitrust and consumer privacy issues. Pahl also has worked as an adjunct professor of law at George Mason University’s Antonin Scalia Law School, and is a member of the Federalist Society. More recently, Pahl has worked on consumer financial protection issues (especially credit reporting and debt collection issues) as a partner at Arnall Golden Gregory LLP, and on debt collection issues at the Consumer Financial Protection Bureau.

The Federal Trade Commission is mailing refund checks totaling nearly $20 million to more than 617,000 T-Mobile customers who had third-party charges added to their mobile bills. These refunds are the result of a 2014 settlement with T-Mobile, which also involved all 50 states and the District of Columbia, as well as the Federal Communications Commission.

As part of the settlement, T-Mobile agreed to fully refund unwanted third-party charges to its customers who applied for a refund. The company also agreed to remit to the FTC any remaining funds up to $90 million that were not distributed under the order. The FTC is using the remaining settlement money to send checks to customers who had third-party charges placed on their bills but did not participate in T-Mobile’s refund program. The average check amount is $32. Recipients should deposit or cash checks within 60 days.

President Donald Trump has designated Maureen K. Ohlhausen as Acting Chairman of the Federal Trade Commission by a White House order. Ohlhausen was sworn in as a Commissioner of the Federal Trade Commission on April 4, 2012, to a term that expires in September 2018.

Prior to joining the Commission, Ohlhausen was a partner at Wilkinson Barker Knauer, LLP, where she headed the firm’s FTC practice focusing on privacy, data protection, and cybersecurity matters. Ohlhausen previously served at the FTC for 11 years, most recently as Director of the Office of Policy Planning from 2004 to 2008, where she led the FTC's Internet Access Task Force. She was also Deputy Director of that office. From 1998 to 2001, Ohlhausen was an attorney advisor for former FTC Commissioner Orson Swindle, advising him on competition and consumer protection matters. She started at the FTC General Counsel’s Office in 1997.

As consumers have come to rely on multiple devices, companies are using technologies to connect a consumer’s activity across those devices – smartphones, tablets, desktops, laptops, and more. It’s called cross-device tracking and the Federal Trade Commission just released a staff report on the subject. Drawing on an earlier FTC workshop, the report discusses the benefits and the challenges associated with technologies that enable cross-device tracking. Here is a summary of some staff recommendations:

Transparency: FTC staff calls on anyone engaged in cross-device tracking – both cross-device tracking companies and consumer-facing entities – to truthfully disclose their tracking activities.
Choice: Companies should offer consumers choices about how their cross-device activity is tracked. It goes without saying that if consumers are told they can opt out of tracking, companies must honor that promise.
Special considerations for sensitive data: For certain categories of sensitive data – for example, health, financial, or children’s information – the staff recommends not tracking consumers without their express affirmative consent.
Security:Consistent with the message businesses have been hearing for years, the staff report recommends that companies practice good data hygiene to avoid unauthorized access, including by hackers in the case of a data breach.
Periodic reassessment of technologies and practices: FTC staff recommends that companies periodically reassess their practices as technology evolves and simplify consent choices whenever possible.

Protecting consumers’ privacy and personal data has long been a priority at the Federal Trade Commission. Over the years, we’ve helped millions of identity theft victims recover from that crime. We created the National Do Not Call Registry to limit unwanted telemarketing, and we continue to fight illegal robocalls. And we’ve brought more than sixty cases against companies that didn’t take reasonable steps to protect people’s data. But we’re not living in the past. Among our recent cases: a settlement with Ashley Madison over the company’s lax data security and misleading claims; our first case against an education lead generator for misleading people about how their information would be used; and a case against a company that marketed internet routers with serious security flaws. On Wednesday, January 25, at 3 p.m. EST, we’ll be participating in a Data Privacy Day Twitter chat for businesses sponsored by the National Cyber Security Alliance.

As I finish my year as Federal Trade Commission Chief Technologist, I wanted to take one more opportunity to encourage researchers to conduct research relevant to consumer protection and share it with the FTC. In this blog post, I share some thoughts on research in nine areas that I believe would be useful to the FTC. At the end I provide information about how to get in touch with FTC staff to discuss research.

Privacy and Security: Privacy and security are important to the FTC’s consumer protection mission. Research that investigates how consumers value privacy, the way consumers balance privacy interests with other interests, how companies assess and manage security risks, and the way consumers are impacted by privacy and security breaches would provide valuable information.

Ads and marketing: The FTC regulates advertising and marketing practices to protect consumers from those that are unfair or deceptive. Research related to new advertising and marketing practices and research that provides insights into how advertising and marketing practices are used in new media would aid FTC staff.

The Federal Trade Commission filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. Qualcomm is the world’s dominant supplier of baseband processors – devices that manage cellular communications in mobile products. The FTC alleges that Qualcomm has used its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors. Qualcomm also holds patents that it has declared essential to industry standards that enable cellular connectivity. These standards were adopted by standard-setting organizations for the telecommunications industry, which include Qualcomm and many of its competitors. In exchange for having their patented technologies included in the standards, participants typically commit to license their patents on what are known as fair, reasonable, and non-discriminatory, or “FRAND,” terms.

The Federal Trade Commission announced a crackdown on two massive robocall telemarketing operations, both of which have been blasting robocalls to consumers on the National Do Not Call (DNC) Registry since at least 2012. Many of the defendants in the two cases, FTC v. Justin Ramsey, et. al. and FTC v. Aaron Michael Jones, et. al., have agreed to court orders that permanently ban them from making robocalls, making any calls to numbers listed on the Do Not Call Registry, violating the TSR, and/or assisting others in doing so. The settling defendants also will pay the Commission a total of more than $500,000.

The two ringleaders of the operations—Justin Ramsey and Aaron Michael (“Mike”) Jones—have previously been sued by state attorneys general for telemarketing violations and the FTC’s litigation against them continues. According to the FTC’s complaint in the Ramsey action, the defendants illegally blasted millions of robocalls in 2012 and 2013 to consumers on the DNC Registry selling home security systems or generating leads for home security installation companies. In just one week in July 2012, the defendants allegedly made more than 1.3 million illegal calls to consumers nationwide, 80 percent of which were to numbers listed on the DNC Registry.