On August 22, the manufacturer of a magnetic “fuel saving” and emissions-reduction device that did not save fuel or reduce emissions will pay $4.2 million to settle Federal Trade Commission (“FTC”) charges that his advertising claims were false. The FTC will seek to provide redress to consumers who bought the device based on the false advertising claims. In addition, the defendants will be banned from selling or manufacturing magnetic fuel savings and emissions reduction devices.
The Federal Trade Commission (“FTC”) announced a law enforcement action on August 18 challenging a 2005 acquisition that combined the natural gas liquids (“NGL”) storage businesses of Enterprise Product Partners, L.P. and TEPPCO Partners, L.P. under common ownership. The FTC’s complaint alleged that the transaction likely would result in higher prices and service degradations by reducing the number of commercial salt dome NGL storage providers in Mont Belvieu, Texas, from four to three.
The Federal Trade Commission filed a complaint on August 15 in U.S. district court, seeking to halt an operation that downloads software barraging consumers with pop-ups demanding payment to make the pop-ups go away. The Office of the Attorney General of the State of Washington also sued the operators.
Internet Video Distributor VDC Complains to FCC about Inability to Secure Carriage Deals with Established Cable Networks
In an August 14 letter to the FCC, internet video distributor VDC Corp. (“VDC”), owner of VDC.com, complained that it is having difficulty securing carriage deals with established cable networks. While VDC.com distributes content from Discovery Communications, most of the company’s carriage deals are with smaller cable networks such as The Pentagon Channel and Mav TV. The broadband video site also carries home-shopping channels QVC and ShopNBC. VDC chairman Scott Wolf said that VDC plans to seek relief from the FCC “in the next few weeks” under the FCC’s program access rules. In his letter to FCC chairman Kevin Martin, Wolf alleges that some cable networks are balking at licensing their networks to VDC.com because of “external influence, mainly from the large [cable] MSOs.”
The Federal Trade Commission (“FTC”) announced on August 10 that it entered into a court settlement with Nomrah Records, Inc. and its president, Mark Harmon – named defendants in the recent DIRECTV telemarketing case. Under the settlement, filed by the U.S. Department of Justice on the FTC’s behalf, Harmon will pay a $75,000 civil penalty and both he and the company will be barred from violating the Do Not Call (“DNC”) Rule and Telemarketing Sales Rule (“TSR”) in the future.
On August 10, the Chinese government issued rules outlining the conditions for foreign investment in local companies through share swaps, paving the way for such transactions in merger and acquisition deals. The regulations also cover the entry of foreign investors in local companies through mergers and acquisitions.
An operation selling Chinese herbal supplements was banned on August 9 from claiming its products treated or cured diseases, to settle Federal Trade Commission (“FTC”) charges it violated a previous court order. The FTC alleged the sellers of Dia-Cope, a pill claimed to prevent, treat, and cure diabetes, violated the order by misrepresenting the health benefits of their product and misrepresenting that clinical trials proved their claims. The defendants will also give up their ill-gotten gains – all of the assets they received from the sale of Dia-Cope.
Justice Department Will Not Oppose Proposal to Form Textile Rental and Laundry Services Joint Venture
On August 8, the DOJ announced it would not oppose a proposal which would allow 10 textile maintenance companies to bid jointly to provide textile rental and laundry services to national healthcare outpatient centers. Based on representations made in the proposal by Linen Systems for Healthcare LLC, the DOJ concluded that the proposed joint venture is not likely to produce anticompetitive effects and could create a new competitor for national accounts.
Newly appointed FCC member Robert McDowell supports agency involvement to ensure that phone companies can enter local cable-TV markets without having to overcome a lot of red tape. On August 8, during his first meeting with reporters at FCC headquarters, McDowell said “I do think we can do a lot to help speed the deployment of video penetration and marry it up with that broadband penetration by clearing some of that regulatory underbrush.”
The European Commission said on August 8 it would look into the Italian government's move to block a proposed merger between the Italian highway operator Autostrade and the Spanish infrastructure company Abertis. The Italian government and highways regulator rejected the proposed merger, worth nearly 12 billion euros ($15 billion). The deal created the world's largest highway company, operating in 16 countries with a road network of 6,713 kilometers (4,171 miles).
On August 7, the FCC reaffirmed its ruling that Time Warner Cable (“Time Warner”) had to carry the NFL Network for 30 days on systems just acquired from Comcast and Adelphia Communications. On August 4, Time Warner threatened to take the FCC to court if the agency did not back down and allow it to drop NFL Network. Following the release of the FCC’s second decision, Time Warner did not commit to a court fight over the need to provide consumers a 30-day notice before deleting a channel. “Time Warner Cable continues to believe that the FCC has misconstrued the notice rules and has ordered a remedy that is in clear violation of the First Amendment. The FCC's action has resulted in exacerbating, not avoiding, consumer confusion,” Time Warner spokesman Mark Harrad said.
The FTC and the Federal Reserve Board on August 7 issued a joint report to Congress on compliance with the consumer dispute provisions of the Fair Credit Reporting Act (“FCRA”). The Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”), which generally amends the FCRA, required the FTC and the Board to conduct a study of the extent to which consumer reporting agencies and furnishers of information to consumer reporting agencies (“CRAs”) complied with certain FCRA requirements.
A company and its owner selling contact lenses directly to consumers via three Web sites are settling Federal Trade Commission (“Commission” or “FTC”) charges they violated federal law by failing to verify consumers’ prescriptions as required by the Commission’s Contact Lens Rule. They will pay $40,000 in civil penalties and will be prohibited from violating the Rule in the future.
On August 3rd, European Union antitrust regulators asked Spain to explain why it attached conditions to German energy company E.On AG's $34 billion bid for the Spanish utility Endesa SA. Spain's National Energy Commission said last week that it would permit the 26.9 billion euro deal only if E.On sells about a third of Endesa's power generation assets.
By a unanimous vote, the Federal Trade Commission (“Commission” or “FTC”) determined on August 2 that computer technology developer Rambus, Inc. unlawfully monopolized the markets for four computer memory technologies incorporated into industry standards for dynamic random access memory (“DRAM”) chips. DRAMs are widely used in personal computers, servers, printers, and cameras.
On August 1, the DOJ Antitrust Division announced that it would require Mittal Steel Company N.V. to divest one of three North American tin mills it will own after its $33 billion acquisition of Arcelor S.A. in order to proceed with the deal. After a thorough investigation, the DOJ concluded that the original deal would have adversely affected competition by eliminating constraints on the ability of tin mill products producers to coordinate their behavior and thereby increase the price of tin mill products to can manufacturers and other customers particularly in the eastern United States.
Testifying on behalf of the Federal Trade Commission (“FTC”) before the U.S. Senate’s Special Committee on Aging, Commissioner Jon Leibowitz described the FTC’s work in the area of branded and generic pharmaceutical competition and discussed barriers that can lead to the delay of generic entry into the U.S. marketplace.