Published on Nov 07, 2022
GOP senators warn law firms about clients’ possible ESG antitrust violations. Senate Republicans warned law firms about “possible antitrust violations” that their “clients may commit if they pursue Environmental, Social and Governance (ESG) initiatives.” The firms and their clients “should preserve documents relevant to the clients’ ESG practices in preparation for Congress’s oversight of antitrust violations due to ESG collusion,” said a release on the letter from Senate Judiciary Committee Ranking Member Chuck Grassley (R-IA) joined by Senators Tom Cotton (R-AK), Marsha Blackburn (R-TN), Mike Lee (R-UT) and Marco Rubio (R-FL).
“The ESG movement attempts to weaponize corporations to reshape society in ways that Americans would never endorse at the ballot box,” the senators wrote. “Of particular concern is the collusive effort to restrict the supply of coal, oil, and gas, which is driving up energy costs across the globe and empowering America’s adversaries abroad.”
The Senators’ novel theory that ESG initiatives could amount to collusion is perhaps less of an indication of risk that such initiatives would run afoul of the law and more a signal that legacy oil and gas industries, which have been under fire for collusion as energy prices have risen, will have allies in Congress should antitrust agencies pursue antitrust action against them. That said, any time Congress sends letters to law firms, it also hints at a potential big rise in legal costs from a potential government investigation.
Overall, should Republicans win control of both the House and Senate, beyond energy industries, we would expect much of their energy will be directed against big tech and towards scrutinizing the antitrust agencies’ efforts to make antitrust enforcement more muscular and the FTC’s ambitious rule making agenda. On the margins, Republican control of Congress might push the FTC more towards policy statements and litigation rather than rule making.
That said, as this month’s calendars continue to show, FTC Chair Lina Khan has frequently met with Republican senators, and she received a number of their votes for confirmation, suggesting the potential for a constructive working relationship on certain issues.
Reaction following new merger guidelines. The most interesting issue for agenda watchers may be Republicans’ appetite for fighting for Bork-era consumer welfare analysis, especially as the FTC and DOJ prepare to release new draft merger guidelines. Sources now expect to see an initial draft of the guidelines in early 2023 as opposed to later this month.
Lynn calls for attention to shift to Amazon as Court backs DOJ, blocks Penguin Random House buy of Simon & Schuster. A federal judge blocked Bertelsmann-owned Penguin Random House’s proposed acquisition of Paramount’s Simon & Schuster, a combo DOJ alleged would “exert outsized influence” over U.S. book publishing and payments to authors. The court found that DOJ showed “that ‘the effect of [the proposed merger] may be substantially to lessen competition’ in the market for the U.S. publishing rights to anticipated top-selling books,” said the October 31 order of U.S. District Court Judge Florence Pan of the District of Columbia. An opinion with Pan’s reasoning was sealed, pending redactions.
The “decision protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas” as well as workers, said DOJ antitrust division Assistant AG Jonathan Kanter. But Bertelsmann CEO Thomas Rabe said that the merger “would be good for competition” and that his company plans to appeal.
Open Markets Institute Executive Director Barry Lynn called the outcome a big win for the book publishing business, antitrust enforcement and Biden administration anti-monopoly efforts. “This victory is also a huge step towards an antitrust lawsuit against Amazon for its disruptive, antidemocratic, and politically dangerous monopolization of America’s market for books,” he said, calling on Bertelsmann to help the government prepare a winning case.
“This is the beginning of the end of the consumer welfare standard, which has warped and enfeebled antitrust enforcement for the last 40 years,” said Stacy Mitchell, Institute for Local Self-Reliance co-director. The ruling “makes clear that concentration’s harm to creators, producers, and workers is a crucial concern of antitrust law.” The Demand Progress Education Fund (here) and the American Economic Liberties Project (here) also hailed the ruling.
Author Stephen King, who testified in the trial on DOJ’s case, tweeted that he was delighted: “The proposed merger was never about readers and writers; it was about preserving (and growing) PRH’s market share. In other words: $$$.”
FTC calendars. The Capitol Forum received September calendars via FOIA request for:
Koslov had a series of meetings with the initial MG, which seems to indicate meetings on key topics or themes in the new merger guidelines.
(Bumpus calendar often suggests Khan meetings/calls with members of Congress)
In Their Own Words
Kanter: DOJ ‘bringing the right cases,’ even if no guarantees; ‘historic moment for antitrust.’ From AAG Jonathan Kanter’s prepared remarks at an October 26 DOJ antitrust division awards ceremony, circulated November 2.
“We are bringing the right cases for the right reasons. Cases that we believe in, on the facts and the law, even if there is no guarantee that we prevail in court. Know that I am always in your corner in this fight. In our line of work, we consistently face off against the most well-resourced organizations in the world. I couldn’t dream of a more talented, dedicated team of public servants to carry out this mission. We will continue bringing these cases not because they are easy, but because they are hard. And we are up to that task.
“This is a historic moment in antitrust and competition. We have seen the rise of concentrated power everywhere in the economy: from digital gatekeepers building competitive moats in high tech markets, to concentration in supply chains, labor, transportation and other markets across the economy. At the same time, we have seen public servants across the government rise to meet that moment. The President has made competition a core part of his agenda. Antitrust legislation has been advanced and passed in both houses of Congress. And of course, the Department of Justice, with our agency partners, has taken up the charge to address this once-in-a-generation challenge.”
FTC’s Khan cites VR and AR as raising emerging privacy challenges. From FTC Chair Lina Khan’s prepared remarks opening a PrivacyCon conference, November 1.
“We’ll be hearing from innovative researchers across a wide range of privacy-related areas. We have leading experts on topics like adtech and algorithmic recommendations. These are areas that are central to data privacy, but can be very hard to understand. I’m also excited to see that we have panels on emerging fields like virtual reality and augmented reality. VR and AR are both essentially still in beta, without a clear business model. But that hasn’t stopped some of the world’s biggest technology companies from investing billions. Regulators shouldn’t wait until a new sector matures before thinking about the issues it could raise. The FTC needs to be on top of this emerging industry now, before problematic business models have time to solidify. Listening to the academic community is a key part of how we do that.”
FTC Competition bureau chief has three new counsels. FTC Bureau of Competition Director Holly Vedova has three new counsels—Lisa De Marchi Sleigh, Aylin Skroejer and Michael Turner—according to the bureau’s updated organization chart.
Google taps aide to Sen. Lee. Google confirmed a Politico story that it has hired Christy Woodruff—previously legislative director to Senator Mike Lee (R-UT), ranking member of the antitrust subcommittee, as a lobbyist on its government affairs and public policy team.
Grassley counsel joins News Corp. Rachel Bissex—formerly senior counsel to Senate Judiciary Ranking Member Chuck Grassley (R-IA) (profile)—is now News Corp’s VP federal government affairs, the company confirmed. She also had been an aide to House antitrust subcommittee Ranking Member Ken Buck (R-CO) and to then-U.S. Attorney General William Barr.
Paul, Weiss hires DOJ antitrust official. Eyitayo “Tee” St. Matthew-Daniel, formerly assistant chief of the DOJ antitrust division New York Office, is joining Paul, Weiss as a partner in its litigation department, the firm announced.
Note: For all upcoming events, you can visit our Antitrust Calendar app at THIS LINK or via The Capitol Forum platform.
Monday, November 7 at 10 a.m. EDT. Supreme Court hears argument in Axon Enterprise v. FTC, on whether parties targeted in FTC administrative proceedings should be able to challenge the reviews’ constitutionality in U.S. district court before the proceedings yield final decisions that can be challenged in U.S. appellate courts (docket 21-86); followed by argument in another agency case, SEC v. Cochran (docket 21-1239). Court calendar, transcripts, audio recordings.
Monday, November 7 at noon EST. ABA webinar, “Implications for Merger Enforcement from Recent Federal Court Decisions Related to Healthcare and Technology.”
Monday, November 7 at 3 p.m. EST. Center for Strategic & International Studies webinar, “Addressing Government Partnerships with Data Brokers.” Panel discusses domestic and foreign government access to U.S. personal information in the evolving data broker ecosystem.
Tuesday, November 8 at 9 a.m. Central European Time. Informa “Competition Law in the Aviation Sector” conference in Brussels (recorded sessions available two weeks later). Speakers include EC and CMA enforcers, and industry representatives.
Wednesday, November 9 at 8:50 a.m. EST. GCR Live “Women in Antitrust 2022” conference in Washington, D.C. Co-host: Ex-FTC Chair Edith Ramirez. Speakers include Australian Competition and Consumer Commission Chair Gina Cass-Gottlieb and Mexican Federal Economic Competition Commission President Brenda Gisela Hernández Ramírez.
Wednesday, November 9 at 9:30 a.m. EST. American Antitrust Institute “16th Annual Private Antitrust Enforcement Conference” in Washington, D.C. Includes a panel on public-private enforcer collaboration with Ryan Danks, DOJ antitrust division director of civil enforcement, Elinor Hoffmann, New York State Attorney General Office Antitrust Bureau chief and Synda Mark, FTC Office of Policy & Coordination acting deputy assistant. Plus: Antitrust Awards Night at 5 p.m. (separate registration).
Thursday, November 10 at 7:30 a.m. PST. California Lawyers Association “Golden State Antitrust and Unfair Competition Law Institute” conference in San Francisco. Keynote: DOJ antitrust AAG Jonathan Kanter. Fireside Chat: Elizabeth Wilkins, director, FTC Office of Planning and Policy. Judges Panel: three judges from the U.S. District Court of the Northern District of California. November 9 at 5 p.m. PDT: Welcome reception.
Thursday, November 10 at noon EST. Steptoe “Fourth Annual Regulatory & Legislative Symposium” in Washington D.C. (hybrid event). Speakers include: Surface Transportation Board Chairman Martin Oberman, West Virginia Attorney General Patrick Morrisey, Federal Energy Regulatory Commission General Counsel Matt Christiansen and University of Maryland Professor Andrew Sweeting, ex-head of the FTC Bureau of Economics.
Thursday, November 10 at 3 p.m. PST. King County Judge Ken Schubert in Washington State to hear via Zoom Washington attorney general’s motion for preliminary injunction against Albertsons Companies’ planned $4 billion special pre-closing dividend payment to shareholders as part of Albertsons planned merger with Kroger.
November 14 at 2 p.m. PST (5 p.m. EST). U.S. Ninth Circuit Court of Appeals panel’s rescheduled oral argument in Epic Games, Inc. v. Apple, Inc. (Case No. 21-16506) appeals of district court ruling (calendar, video streaming).
November 15 at noon EST. American Bar Association webinar “Antitrust Questions in New Labor Markets.” Among Speakers: Ioana Marinescu, DOJ principal economist.
November 17 at 8 a.m. EST. ABA “Antitrust Fall Forum” in Washington, D.C. Speakers include Mark Meador, deputy chief counsel for antitrust and competition policy, Senator Mike Lee (R-UT); and Bonnie Sweeney, DOJ antitrust division. Keynotes TBA.
November 21-23 at 9, 8:30, 8:30 a.m. Central European Time. Informa “Digital Economy Focus Day” and “Advanced EU Competition Law” conference in Brussels (recordings available two weeks later for attendees). Among speakers: Olivier Guersent, director general, EC’s DG Competition; Aaron Hoag, chief, U.S. DOJ Technology and Digital Platforms Section; Marc Lanoue, chief antitrust counsel, U.S. Senator Amy Klobuchar (D-MN); Judge Anna Marcoulli, EU Court of Justice, General Court; Sebastian Wismer, German Bundeskartellamt, head of Digital Policy Unit; Stefan Hunt, chief data and technology insights officer, UK CMA.
TRO blocks Albertsons $4B dividend for now as state AGs file cases in Kroger merger. A Washington State judge granted Attorney General Bob Ferguson’s motion for a nationwide temporary restraining order blocking Albertsons Companies Inc.’s planned $4 billion special dividend payment to shareholders on November 7 as part of Albertsons’ proposed merger with The Kroger Co. “There is a substantial likelihood that Plaintiff will prevail on the merits of its … claim that the agreement to pay the Pre-Closing Dividend was an unreasonable restraint of trade, and its … claim that the agreement to the Pre-Closing Dividend is an unfair method of competition,” wrote King County Superior Court Commissioner Henry Judson in a November 3 order.
Judson noted that Ferguson’s complaint alleges the special dividend will use 75 percent of Albertsons’ liquid assets while requiring it to borrow $1.5 billion. “Albertsons payment of the dividend will impact its ability to compete and impair competition in grocery retail throughout Washington State,” Judson wrote. He also noted Superior Court Judge Ken Schubert is to hear Ferguson’s motion for a preliminary injunction on Thursday, November 10.
“Huge victory!” said Ferguson. “Putting the brakes on this $4 billion payment is the right thing for Americans shopping at their local grocery stores.” The special dividend “risks severely undercutting the grocery giant’s ability to compete during the lengthy time period government regulators — including Washington — will be scrutinizing the merger,” said Ferguson’s release on his complaint. Kroger (owner of Kroger and Harris Teeter supermarkets) and Albertsons (owner of Safeway supermarkets) don’t expect their deal to close until early 2024.
Albertsons will seek to overturn the court “restraint as quickly as possible because the temporary order was based on the incorrect assertion that payment of the Special Dividend would impair its ability to compete while its proposed merger” with Kroger is under antitrust review, Albertsons said. The company said the Washington AG lawsuit and a similar one by other state AGs are “meritless. Albertsons “is well-capitalized, with limited debt and significant free cash flow and is in a strong position financially,” it said. “The size of the dividend reflects the Company’s strength, rather than the illogical and damaging accusation that it is an attempt to weaken the Company.”
The AGs of the District of Columbia, California and Illinois also filed suit to block the dividend payment until an antitrust review of the merger can be completed. “Albertsons’ rush to secure a record-setting payday for its investors threatens District residents’ jobs and access to affordable food and groceries in neighborhoods where no alternatives exist,” said D.C. AG Karl Racine on the AGs’ complaint in the U.S. district court of the District of Columbia. “This would have a particularly devastating impact on struggling people and families with access to fewer grocery stores during a time of historically high inflation.”
Senators Maria Cantwell (D-WA) and Patty Murray (D-WA) expressed concern to the FTC about the merger. Senators Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) and Representatives Jan Schakowsky (D-IL), Katie Porter (D-CA) and Chuy García (D-IL) wrote Cerberus Capital Management, “urging the private equity firm to pause” the dividend payment and provide answers about its impact on the merger. The United Food & Commercial Workers Local 400 union and others called on the FTC to oppose the merger. The FTC declined comment.
The Capitol Forum reported that a combined Kroger-Albertsons would control over 1,400 closely competing stores absent divestitures.
Khan sees shift in focus from deception/disclosure to unfairness mandate to protect privacy. FTC Chair Lina Khan said the notice-and-comment disclosure framework against deceptive business practices is largely outdated in a digital world awash in data tracking. Consumers cannot read all the lengthy disclosures they’re asked to read and acknowledge, and even if they did, it’s doubtful it would do them much good because they often cannot realistically opt out, given the need to use digital tools, said Khan in opening remarks on November 4 at the Privacy + Security Forum’s Fall Academy (not webcasted).
So while disclosure can still be useful, Khan said, the FTC is looking to increasingly use its mandate to combat “unfair” practices in order to protect consumers’ privacy. Among the key questions are what’s “avoidable” and what counts as “substantial injury,” she said, noting the agency’s advance notice of proposed rulemaking on commercial surveillance and data security. The notice-and-comment regime has become entrenched and can’t be quickly ditched, she said, but the agency must figure out how to wield its “unfairness” power.
In Q&A, Khan said she doesn’t want to prejudge whether rules will be needed to restrict commercial surveillance and protect privacy while comments are still coming in at this early stage. To write rules, the FTC will have to show that certain practices are prevalent and harmful, she said, noting the possibility of separate rules for data security. Rules could be more efficient in providing clarity for parties and facilitating agency use of civil penalties, she said. Congressional passage of privacy legislation would be the best option, Khan said, but she disputed the notion that the FTC’s current “unfairness” mandate is some “wild, wild west.”
Khan nevertheless said that enforcement actions against particular parties and practices found to be unfair could still be used. In fact, putting more “fact patterns through the wringer” could be “helpful” in developing a broader framework. Questions about agency resources and efficiency would loom large, she suggested. Pursuing cases in court or settling involves tradeoffs, she said, but litigation can add to “institutional dialogue” by informing Congress of where statutory changes are needed. Whether possible rules would be broadly written and/or targeted narrowly would depend on the context, she said, noting the possibility of, say, a data rule to protect the civil rights of people seeking housing or employment.
Sen. Murphy urges CFIUS probe of Twitter takeover by Musk, others; advertisers pressured. The U.S. Committee on Foreign Investment in the United States (CFIUS) should immediately investigate “potential national security concerns arising from the recent takeover of Twitter, Inc. by Elon Musk and a number of foreign private investors, including members of the Saudi Arabian royal family and the kingdom of Qatar,” said a release of Senator Chris Murphy (D-CT).
Citing concerns and allegations about Saudi actions, Murphy urged the interagency committee, chaired by the Treasury Department, “to examine the degree to which Saudi influence over Twitter’s operations or access to user data could be used to silence critics and activists, or further state-sponsored disinformation campaigns.” The call came as The Washington Post reported that U.S. officials are exploring their authority to investigate the deal.
Almost 50 groups urged Twitter advertisers to publicly commit to cease all advertising on Twitter if Musk “follows through on his plans to undermine brand safety and community standards, including content moderation.” After Musk took over, Twitter “was inundated with hate and disinformation,” said the letter from Accountable Tech and other mostly progressive groups to what they called Twitter’s 20 largest U.S. advertisers, including tech heavyweights like Amazon, Apple, Google and Meta Platforms. “Without deliberate efforts by Twitter to address this type of abuse and hate, your brands will be actively supporting accelerating extremism.”
Twitter, the Treasury Department and CFIUS didn’t respond to Capitol Forum queries
Private suit seeks to block JetBlue-Spirit transaction. A collection of air passengers, including travel agents, filed suit against the planned JetBlue acquisition of Spirit Airlines, alleging it would violate Clayton Act’s Section 7. “The ‘threatened loss or damage’ to the Plaintiffs and to the public at-large by the potential elimination of JetBlue’s competitor, Spirit – the most innovative, passenger friendly, ultra-low cost and unique price-cutting airline in the industry – is substantial and foreboding,” said their complaint filed November 3 in the U.S. District Court for Northern California.
“The current trend toward concentration, the lessening of competition and the tendency to create a monopoly in the airline industry is unmatched and unparalleled,” said the complaint. “JetBlue would gain a majority market share on more than a dozen routes where neither it nor Spirit previously dominated and it would eliminate the price-cutting by Spirit. Therefore, JetBlue made an unsolicited tender offer to purchase Spirit in order to eliminate that competition.”
The companies didn’t respond to a Capitol Forum query.
Warren calls on FTC, DOJ to prevent Big Tech ‘overreach’ into auto industry. Senator Elizabeth Warren (D-MA) urged antitrust enforcers to increase their oversight of “Big Tech expansion into the automotive industry,” which “raises competition concerns” and merits “swift action” to “prevent further overreach,” said a release November 2 on a letter to the FTC and DOJ antitrust division. “To achieve this dominance, Google, Apple, and Amazon are leveraging their market power in the mobile operating system, digital app markets, and data infrastructure spheres to become the dominant players in the automotive sphere,” wrote Warren. “This expansion has potentially alarming implications for developers, workers, and consumers.”
A Google spokesperson emailed: “Carmakers choose to partner with tech companies to improve the experience for their customers. There is enormous competition in the connected car space – including Apple CarPlay, Amazon Alexa, Cerence, TomTom, ChargePoint and many others – and carmakers continue to invest in their in-house solutions simultaneously. At Google, our goal is to enable carmakers and developers across the auto industry to develop software solutions at scale.”
The FTC declined comment; DOJ, Apple and Amazon didn’t respond to Capitol Forum queries.
Sen. Brown urges FTC review of landlord software use to curb competition, inflate rents. Senate Banking Chairman Sherrod Brown (D-OH) called on the FTC to review property owner and landlord use of price optimization software like RealPage’s YieldStar and AI Revenue Management to set rents, said a November 1 release on a letter to the agency, following a major ProPublica investigation that found the software’s algorithm inflated rents and suppressed housing market competition. “Renters should have the power to negotiate fairly priced housing, free from illicit collusion and deceptive pricing techniques,” wrote Brown. The FTC “should review whether rent setting algorithms that analyze rent prices through the use of competitors’ private data, such as YieldStar, violate antitrust laws.”
“RealPage is always willing to engage with our policy stakeholders to ensure they have the facts and appropriate context about RealPage,” emailed a company spokesperson. The FTC declined comment.
AELP hits Big Tech trade ‘ploy’ against anti-monopoly policies; White House to push bills. Big Tech is attacking global anti-monopoly policies “by harnessing U.S. trade enforcement mechanisms to claim ‘discriminatory’ treatment and urging trade penalties against countries adopting competition policies that may have a larger impact on dominant digital firms due to their size,” said the American Economic Liberties Project, November 2, releasing a “Digital Trade” Doublespeak report. Among targeted initiatives are bills in the U.S. Congress “to end app store operators’ duopoly abuses and address the power imbalance between media outlets and the mega-platforms.” Big Tech hopes “to hide behind the trade world’s impenetrable terminology and closed-door processes but their latest ploy … won’t work,” said Lori Wallach, director AELP’s Rethink Trade program.
White House National Economic Council Director Brian Deese said the administration is planning to push for antitrust legislation, including to prevent platform discrimination, during the lame-duck period after the midterm elections, Bloomberg reported.
CFPB seeks further input on Big Tech and P2P payment platforms in wake of new concerns. The Consumer Financial Protection Bureau is reopening “the public comment period on Big Tech and P2P payment platforms,” tweeted CFPB Director Rohit Chopra on October 31, linking to the agency’s release. The FTC ordered Facebook/Meta, Google, Apple, Amazon, Square and PayPal “to provide information about their business practices, including how they use our data, and how they adhere to consumer protections,” Chopra added. “Recent concerns about changes to major players’ acceptable use policies underscored the need for @CFPB to gather additional input on how they make decisions and how these practices impact American consumers and businesses.”
Executive pleads guilty to criminal attempted monopolization; first such case in 50 years. A paving and asphalt contractor’s president has pleaded guilty to attempted monopolization of the market for highway crack-sealing services in Montana and Wyoming by trying to allocate regional markets, the DOJ said on October 31. According to a felony charge filed in the U.S. district court in Montana, Nathan Nephi Zito proposed that the rival stop competing in those two states, and in return Zito’s company would stop competing for South Dakota and Nebraska projects. Zito also offered to pay the competitor $100,000. The court accepted the guilty plea of Zito, who faces up to 10 years in prison and a fine of up to $1 million. The American Economic Liberties Project hailed DOJ’s win in its “first criminal monopolization case in 50 years.”
U.S. magistrate judge denies Meta-Within motion to depose FTC officials, for now. A federal judge denied a Meta-Within Unlimited motion to depose FTC officials on topics related to the agency’s complaint against the companies’ proposed merger. Defendants “are correct that the FTC is not entitled to a blanket protective order based upon attorney work product prohibiting depositions directed at the allegations in a complaint,” wrote Magistrate Judge Susan van Keulen of the U.S. District Court of Northern California in a November 1 order, calling the underlying facts discoverable. “There may be, however, a thin line between facts and the analysis or processing of those facts by counsel, with the latter giving rise to attorney work product. Accordingly, the Court proceeds with caution in analyzing the current dispute as provided in Exhibit A, with careful consideration to the allegations” and related discovery.
Federal judge denies DOJ motion for 14-day injunction against Booz Allen-EverWatch. U.S. District Court Judge Catherine Blake of the Maryland District denied a DOJ motion for a 14-day injunction to block Booz Allen from closing its acquisition of EverWatch, which has already closed, while the government considers an appeal of the judge’s previous denial of a preliminary injunction against the deal. “The Government’s requested relief would inject more uncertainty to address a fleeting problem,” wrote Blake in a memorandum explaining her denial order (in Recap docket), noting expected bids in the near future on an associated contract. DOJ’s antitrust division didn’t respond to a Capitol Forum query.
USDA targets $223 million to meat and poultry processing capacity, competition. The U.S. Department of Agriculture on November 2 announced $73 million in 21 initial grant projects of a Meat and Poultry Processing Expansion Program seeking to boost capacity, spur competition, strengthen the food supply chain, create rural jobs and opportunities, and lower consumer costs. In addition, the Administration is investing $75 million for eight projects through the Meat and Poultry Intermediary Lending Program, as well as more than $75 million for four meat and poultry-related projects through the Food Supply Chain Guaranteed Loan program.
FTC acts to address Chegg data breaches; Khan cites students’ lack of choices. The FTC proposed remedies to ed-tech provider Chegg’s “lax data security practices that exposed sensitive information about millions of its customers and employees.” Chegg allegedly failed to fix problems despite data breaches, said the FTC on October 31. A proposed order would require Chegg “to bolster its data security, limit the data the company can collect and retain, offer users multifactor authentication to secure their accounts, and allow users to access and delete their data.” Commissioners voted 4-0 to issue a proposed administrative complaint and consent agreement. “Students are often unable to opt out of ed tech, or lack meaningful choices,” tweeted FTC Chair Lina Khan. Chegg didn’t respond to a Capitol Forum query.
FTC moves to stop Vonage ‘junk fees,’ requires $100 million in refunds. Internet phone service provider Vonage will stop assessing unauthorized “junk fees,” be more transparent and simplify its cancellation procedures, and pay $100 million in refunds to consumers harmed by its practices, the FTC announced on November 3, citing a proposed court order and settlement. “The FTC alleges that the company used dark patterns to make it difficult for consumers to cancel and often continued to illegally charge them even after they spoke to an agent directly and requested cancellation.”