Tag: ftc

A Top Antitrust Enforcer Is Open To Prosecuting People Who Disagree With Him

The Federal Trade Commission’s (FTC) Mark Meador recently insinuated that his agency may investigate nonprofits and academic institutions that object to antitrust enforcement actions without disclosing their donors for deceptive practices. While Meador may think it’s OK to probe parties for disagreeing with him, the FTC’s consumer protection remit does not sanction prosecuting those who reject the commissioner’s antitrust ideology.

Meador recently reposted a video of him discussing the “academic whitewashing” of antitrust during an event hosted by American Compass and the Conservative Partnership Institute on May 1. (While no full recording of the event exists at press time, an employee of American Compass tells Reason that the clip is from the aforementioned event.)

Meador complains about academics “renting out their Ph.D. [and] their reputation to advocate for the interests of giant corporations.” He rightly acknowledged that people are free to do whatever they want but then said that the FTC brings “enforcement actions against influencers and reviewers who advocate for products without disclosing that they’re being paid for it.”

Meador wondered aloud whether nonprofit employees and academics who advocate “for the interests of certain corporations or mergers in their white papers and their op-eds without ever disclosing that they’re being paid to do so” may also be guilty of deceptive practices. He did not state that the FTC would bring enforcement actions against academics but said it’s “worth investigating.”

While Meador may think “it’s an interesting question” whether he may prosecute his ideological opponents, the Supreme Court has already provided an answer. Eugene Volokh, professor emeritus at the University of California, Los Angeles School of Law, understands the ruling in NAACP v. Alabama (1958) as holding that, “when it comes to speech that is neither commercial advertising for a product…nor specifically election-related, broader First Amendment precedents would indeed preclude such disclosure requirements.”

Nadine Strossen, former president of the American Civil Liberties Union and senior fellow at the Foundation for Individual Rights and Expression, tells Reason that “the Supreme Court has expressly distinguished between commercial and other communications.” Citing Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio (1985), Strossen says “compulsory disclosure regarding non-commercial expression is presumptively unconstitutional.”

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Hands Off My Social Media!

Democrats have found a new superstar to help get out the progressive vote: Federal Trade Commission (FTC) Chair Lina Khan. Khan has done town halls with Representatives Raja Krishnamoorthi (D-IL) and Mark Pocan (D-WI), Senate candidate and current Representative Ruben Gallego (D-AZ), and Vermont Senator Bernie Sanders (I-VT).

Khan’s appearances are official government events—not campaign rallies. However, politicians would not appear at an event in an election year unless they where sure it would appeal to a key constituency. It may seem odd that politicians would consider it helpful to appear with an FTC chair. However, Lina Khan is no ordinary agency head. Khan has been a star in progressive circles since, while still a law student, she penned “Amazon’s Antitrust Paradox.” This article argued that the rise of Big Tech companies like Amazon and Google required government to take a more aggressive approach to antitrust. Khan has brought high-profile antitrust cases against Amazon and META (parent company of Facebook, Instagram, and What’s App), as well as attempts to block mergers and acquisitions in areas ranging from  handbags to grocery stores.

Khan advocates a “holistic” approach to antitrust that recognizes how “workers and independent businesses, in addition to consumers, can be harmed by antitrust and consumer protection violations.” She has also called for the FTC to consider how certain business practices can help facilitate antitrust violations. This holistic approach gives federal antitrust enforcers justification for second-guessing almost any decision made by almost any American business.

The FTC chair has a number of fans on the “populist-nationalist” right. These “Khanservatives” want Republicans to embrace a Lina Khan-like approach to antitrust. Khanservatives want to use antitrust to punish Big Tech for manipulating their algorithms to suppress conservative news and opinions. Some Khanservatives believe the Big Tech companies influenced the outcome of the 2016 and 2020 presidential elections.

The most prominent Khanservative is Republican vice presidential nominee JD Vance. Senator Vance (R-OH) has publicly praised Khan and, before being picked as Donald Trump’s running mate, suggested that if Trump returns to the Oval Office he should “use the administrative state” to advance a conservative agenda. Senator Vance has also called for the government to break up Google because “the monopolistic control of information in our society resides with a progressive company.”

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FTC finally investigates John Deere’s creepy repair restriction scheme

Deere caught in headlights — the US Federal Trade Commission is finally investigating farm equipment giant John Deere over its questionable repair policies. The company has made a habit of making it extremely difficult to outright impossible for its customers to repair the Deere products that they themselves own. This infringement on a customer’s right to repair is now being scrutinized by the guys in charge. Oh happy day!

Reuters reports that the probe “focuses on repair restrictions manufacturers place on hardware or software.” According to Reuters, Deere “signed a memorandum of understanding with the American Farm Bureau Federation last year that would allow farmers to fix their equipment, or go to a third-party repair shop.” The investigation will examine whether Deere violated the Federal Trade Act’s section 5, which “prohibits unfair or deceptive practices affecting commerce.”

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U.S. Government Will Take Action Against Fake Reviews And AI-Generated Reviews

Review bombing has become a way of life, as shows like Star Wars: The Acolyte have been inundated with fake reviews bashing the series. Now, the Federal Trade Commission is taking action against fake reviews and A.I.-generated reviews. But this doesn’t mean that the federal government is going to show up at your door if you leave a negative review.

As laid out on the FTC’s official site, the new rule isn’t targeting individuals who write bad reviews out of spite. Instead, it’s going after reviews–either written by people or artificial intelligence–that accept compensation in return for favorable coverage and false testimonials. These practices artificially suppress real reviews, and often misrepresent their products.

“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” said FTC Chair Lina Khan in a statement. “By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.”

Essentially, companies will no longer be allowed to buy reviews without also stating that they were written by A.I. or by someone who never actually used the product. Businesses are also prohibited from offering real consumers any kind of incentive to leave a review, either positive or negative.

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FTC Opens a Backdoor Route to Age Verification on Social Media

I hadn’t heard of the app NGL until recently. But that’s not surprising. The anonymous questions app seems to be largely popular among teens.

Bark, the maker of parental content-monitoring software, calls NGL “a recipe for drama” and cyberbullying. But it seems like a fairly standard social media offering, allowing users to post questions or prompts and receive anonymous responses.

Now, the Federal Trade Commission (FTC) has ordered NGL to ban users under age 18.

The FTC and the Los Angeles District Attorney’s Office say NGL “unfairly” marketed the app to minors. “NGL marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment,” FTC Chair Lina M. Khan said.

To settle the lawsuit, the agency is not only making NGL pay $5 million, it’s also requiring the app to ban those under age 18 from using it.

This seems to me like a worrying development.

An administrative agency ordering a social media app to ban minors is effectively a backdoor way to accomplish what Congress has been failing to mandate legislatively and what courts have been rejecting when state lawmakers do it.

Granted, the FTC does not seem to be requiring NGL to check IDs. It’s merely “required to implement a neutral age gate that prevents new and current users from accessing the app if they indicate that they are under 18,” per the FTC’s press release.

But this is still the FTC setting minimum age requirements for some social media use, circumventing both parental and legislative authority.

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Meta sues FTC, hoping to block ban on monetizing kids’ Facebook data

Meta sued the Federal Trade Commission yesterday in a lawsuit that challenges the FTC’s authority to impose new privacy obligations on the social media firm.

The complaint stems from the FTC’s May 2023 allegation that Meta-owned Facebook violated a 2020 privacy settlement and the Children’s Online Privacy Protection Act. The FTC proposed changes to the 2020 privacy order that would, among other things, prohibit Facebook from monetizing data it collects from users under 18.

Meta’s lawsuit against the FTC challenges what it calls “the structurally unconstitutional authority exercised by the FTC through its Commissioners in an administrative reopening proceeding against Meta.” It was filed against the FTC, Chair Lina Khan, and other commissioners in US District Court for the District of Columbia. Meta is seeking a preliminary injunction to stop the FTC proceeding pending resolution of the lawsuit.

Meta argues that in the FTC’s administrative proceedings, “the Commission has a dual role as prosecutor and judge in violation of the Due Process Clause.” Meta asked the court to “declare that certain fundamental aspects of the Commission’s structure violate the US Constitution, and that these violations render unlawful the FTC Proceeding against Meta.”

Meta says it should have a right to a trial by jury and that “Congress unconstitutionally has delegated to the FTC the power to assign disputes to administrative adjudication rather than litigating them before an Article III court.” The FTC should not be allowed to “unilaterally modify the terms” of the 2020 settlement, Meta said.

The FTC action “would dictate how and when Meta can design its products,” the lawsuit said.

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The Federal Trade Commission’s Latest Frivolous Antitrust Suit Takes Aim at Amazon

The Federal Trade Commission’s (FTC) new antitrust lawsuit against Amazon is an amazing exercise in hubris and absurdity.

In a complaint filed Wednesday, the agency alleges that Amazon’s incredibly popular Prime program is a scam. Prime—a monthly or yearly subscription program that confers many benefits, including free shipping and tons of streaming content, to Amazon customers—is too easy to sign up for and too hard to cancel, the FTC alleges.

“Amazon has knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime,” the agency said in a statement. “Amazon also knowingly complicated the cancellation process for Prime subscribers who sought to end their membership.”

But these claims of deception fall apart upon close examination (as noted by my colleague Eric Boehm yesterday). The FTC’s complaint revolves around mundane moves by Amazon, like conspicuously asking non-Prime customers if they want to sign up or requiring Prime subscribers to click through several screens to unsubscribe.

Patrick Hedger, executive director of the Taxpayers Protection Alliance, noted that it took him under a minute and required just six clicks to cancel his Prime account—fewer clicks than it takes to submit a public comment on the FTC website.

Like many major companies, Amazon has some flaws. But the argument that it’s broadly harmful to consumers—let alone so harmful that it requires the intervention of the federal government—is so far removed from reality that only government bureaucrats with an ax to grind could make it with straight faces. (In fact, Amazon routinely garners extremely high favorability ratings in consumer polls.)

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