Antitrust Lawyer Blog Commentary on Current Developments

Articles Posted in FTC Consumer Protection Highlights

The Federal Trade Commission will host a workshop entitled “Fraud Affects Every Community” on Oct. 29, 2014, in Washington to examine how fraud affects groups including older adults, United States service members and veterans, low-income communities, and African-Americans, Latinos, Asians Americans, and Native Americans.

According to the FTC, this workshop is intended to examine the marketplace experiences of people in these communities, identify areas of concern in different communities, and seek to find actionable remedies through cooperation, law enforcement, industry fraud-prevention initiatives, community outreach and education. The event will bring together consumer advocates, state and federal regulators, fraud prevention experts, academics and researchers to discuss the issues. Its findings will enhance the FTC’s ongoing efforts to fight fraud in the marketplace in every community.

The FTC’s law enforcement experience, input from consumer advocates, and survey research reveal that some broadly-targeted frauds – such as telemarketing fraud, debt-relief services, phony opportunities to earn income, and unauthorized billing schemes – are more likely to affect certain communities. Meanwhile, some scams target specific populations – such as service-members shopping for cars, or people seeking help with the immigration process.

On September 5, 2014, the Federal Trade Commission (“FTC”) announced that it is retracting the proposed settlement agreement with Phoebe Putney Health System, Inc (“Phoebe”), for the extended antitrust litigation regarding its acquisition of its rival Palmyra Park Hospital (“Palmyra”) in Albany, Georgia.

The FTC decided to retract its initial proposed settlement, which included no structural remedies, after its public comment period revealed that Georgia’s Certificate of Need (“CON”) laws do not preclude the FTC from seeking meaningful structural relief.

The FTC’s complaint in 2011 alleged that the merger between Phoebe and Palmyra Park would significantly reduce competition of acute-care hospital services sold to commercial health plans in the six-county area surrounding Albany, Georgia, resulting in higher prices and lower quality of service for patients and their employers. The combined hospitals controlled an 85 percent market share.

On April 11, 2014, the FTC won a court judgment against an illegal immigrant services scam. The court has ordered the defendants, Manuel and Lola Alban of Loma International Business Group, Inc. liable for $616,000 in refunds to Spanish immigrants. The court noted the severe nature of the case due to the amount of harm suffered by the customers. Several were deported and another was jailed for almost 11 months, according to the court. The court found that according to United States Citizenship and Immigration Services data, the agency denied or rejected more than 60 percent of the immigration applications handled by the Albans.

In March of 2013, the court found the Albans to have violated the FTC act by illegally providing immigration services to Salvadorian and Honduran immigrants, even though neither they nor their employees were licensed to provide any such services. Under federal regulations, only authorized providers, aside from attorneys, may accept money in exchange for preparing immigration forms on someone else’s behalf.

Despite this, the court found that the Albans took in an estimated $479,000 to $753,000 from unsuspecting immigrants.  “Misleading people to steal their money and destroy their dreams crosses the line,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC is here to protect people from just these kinds of scams.”

On March 5, 2014, the FTC announced that it has stepped up its enforcement efforts of the Fair Debt Collection Practices Act.

According to FTC’s press release, while its debt collection efforts in the past have focused on research and consumer education, the Commission has focused on law enforcement efforts in recent years, especially after the financial crisis.

In 2013, the FTC brought or resolved a total of nine debt collection cases. The FTC brought forth its first enforcement action against text-message debt collection, fined the largest third-party debt collection agency in the world the highest debt collection civil penalty, and obtained temporary restraining orders halting the unlawful conduct and freezing the assets of some defendants while the court case proceeded. For the most egregious violators, the FTC obtained orders which banned the responsible parties permanently from debt collection.

On February 19, 2014, the FTC settled with several companies and individuals, banning them from selling business, “mystery shopper” and “work-at-home scams,” in addition to surrendering their assets to the FTC.

These scams seek to trick customers to sign-up for “work-at-home” and “mystery shopper” schemes with an upfront fee, and then charging the members a monthly fee under negative-option (i.e. consumers must ‘opt-out’ before the fees are stopped). Consumers who attempt to get their money back usually receive no response, or a call-back that tries another pitch to the caller. The scammers are also engaged in sending unauthorized text messages and other kinds of spam to recruit potential “customers.”

The settlement order against Moysich, Concept Rocket, Revenue Works, Shopper Select and Shopper Systems, bans them from selling business or work-at-home opportunities, sending unauthorized text messages, and selling products or services with negative-option features.  The settlement order against Brosseau and EMZ Ventures bans them from selling business or work-at-home opportunities and sending unauthorized text messages.  The settlement orders impose a judgment of more than $40.5 million against these defendants, which will be suspended when the Moysich defendants have surrendered $55,000 in frozen assets, and the Brosseau defendants have surrendered $88,000 in frozen assets and nearly $270,000 from the sale of property in Georgia, Vermont.

On February 14, 2014, the Federal Trade Commission announced that it will host a Public Workshop Examining U.S. Health Care Competition on March 20-21 in Washington, DC. The FTC is looking to “better understand the competitive dynamics of evolving health care product and service markets.”  The workshop and corresponding request for public comments are focused on 5 key topics:

1.     Professional regulation of Health Care Providers

2.     Innovations in Health Care Delivery

On January 24, 2014, the FTC won its court battle against St. Luke’s Health System’s acquisition of a large primary physician group – the Saltzer Medical Group – in Nampa, Idaho.


In March 2013, the FTC filed a complaint for an injunction against St. Luke’s, alleging that the Saltzer acquisition, which was not reportable to the federal antitrust agencies under the Hart-Scott-Rodino Antitrust Improvements Act (“HSR Act”), would create a single, dominant provider of primary care physician services in Nampa, Idaho.  The FTC alleged that the acquisition would provide St. Luke’s with greater bargaining leverage with commercial insurance health plans, because any attractive insurance plan would need to offer primary care services from St. Luke’s-Saltzer – resulting in higher prices for those services that ultimately would be passed on by the insurance plans to local employers and their employees.

On December 17, 2012, Federal Trade Commission Chairman Jon Leibowitz announced that the Director of the FTC’s Bureau of Consumer Protection will leave at the end of the year. David C. Vladeck will leave the position and return to the Georgetown University Law Center faculty community. Charles A. Harwood will serve as Acting Director of the Bureau of Consumer Protection. Leibowitz also announced that Executive Director Eileen Harrington will also leave at year’s end, and the Acting Executive Director position is to be filled by Pat Bak.

On January 13, 2012, the FTC issued proposed amendments to Parts 2 and 4 of its Rules of Practice (“Rules”). Written comments must be received by March 23, 2012.

The FTC first raised the need to reform Part 2 citing a substantial risk of delay and mistakes in the FTC’s discovery process based on the complexities of modern electronic document discovery involving high volumes of electronically stored information (ESI). The proposed changes are meant to expedite FTC investigations by (i) requiring a party’s continued progress in achieving compliance before granting time extensions to comply with Commission processes; (ii) requiring parties to engage in meaningful “meet and confer” sessions with FTC staff before they file any petition to quash Commission process; and (iii) eliminating the two-step process for resolving petitions to quash, and establishing tighter deadlines for the FTC to rule on petitions. The proposed revisions to Part 2 streamline the rules, update investigatory practices in consideration of ESI, and clarify parties’ rights and duties with regard to the FTC’s compulsory process.

Additionally, the FTC proposed to amend attorney disciplinary rules in Part 4 to provide more guidance on the type of conduct that may warrant disciplinary action and introduced processes for investigating and adjudicating allegations of attorney misconduct, issuing attorney reprimands, and suspending attorneys that have been disbarred.

The Federal Trade Commission (“FTC”) lost its challenge to Ovation Pharmaceutical Inc.’s (“Ovation Pharmaceutical” now Lundbeck Inc.) acquisition of the pediatric heart drugs Indocin and NeoProfen. While the FTC claimed that the combination was a merger to monopoly resulting in anticompetitive price increases, the Federal District Court in Minnesota decided that Lundbeck (formerly “Ovation Pharmaceutical”) did not violate federal or state antitrust laws when it combined Indocin IV and NeoProfen, the only two FDA-approved drugs for treatment of patent ductus arteriosus (“PDA”). The primary reason for Judge Joan N. Erikson’s decision was that she did not believe that the FTC established that the drugs were in the same product market. FTC v. Lundbeck, Inc., No. 08-6379 and Minnesota v. Lundbeck, Inc., No. 08-6381 (D. Minn. August 31, 2010).


Indocin and NeoProfen are pediatric heart drugs used to treat PDA, a potentially fatal heart condition that primarily affects premature babies. Surgery or pharmaceutical drugs are both treatment options for PDA, however, due to the health risks and high costs of surgery, use of drugs is a more favorable treatment.

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