Chairman Issues Commissions Annual Report at ABA Spring Meeting

Federal Trade Commission Chairman Deborah Platt Majoras today issued the FTC’s 2008 Annual Report at the American Bar Association’s Section of Antitrust Law Spring Meeting in Washington, DC. “The FTC in 2008: A Force for Consumers and Competition,” available on the Commission’s Web site, describes the agency’s competition and consumer protection missions and accomplishments. The online version of the annual report links readers to all source documents, such as press releases, reports, speeches, and education materials.

“Over the past year, the Commission has continued to scrutinize market developments and tailor an agenda that meets the significant challenges of a quickly evolving global marketplace,” the report states in a letter from the Chairman. “The Commission has rooted out economic ‘villains’ by actively pursuing the latest generation of fraudsters working to deceive the public . . . and those that mock the competitive marketplace by engaging in anticompetitive conduct that raises the specter of increased prices or decreased consumer choice.”

To accomplish its goals, the report notes, the FTC focuses on industries and practices that most directly impact consumers. By taking merger and nonmerger enforcement actions in industries such as health care, energy, retail goods, technology, and real estate, for example, the agency has a direct impact on consumers by promoting competition for the products they regularly purchase.

The report highlights several accomplishments, including:

• Filed suit to block three mergers in federal district courts, including an action to preserve competition in the supply of light petroleum products in Northern New Mexico in the Western Refining/Giant Industries matter, an action to preserve competition in the market for natural gas distribution in Pennsylvania in the Equitable/Dominion matter, and a suit to halt halt the Whole Foods/Wild Oats merger. In addition, in January 2008, the U.S. Court of Appeals for the Fifth Circuit upheld a Commission order requiring Chicago Bridge & Iron to divest cryogenic storage tank assets acquired from competitor Pitt-Des Moines in 2001.
• Scrutinized mergers in many other industries, reaching settlements requiring divestitures where appropriate to preserve competition. Examples include a consent order requiring significant divestitures in the Commission’s challenge to Mylan’s $6.6 billion acquisition of Merck’s generic subsidiary, the administrative order limiting royalty rates in the Rambus matter, and the Commission’s decision in the Evanston Northwestern Healthcare Corporation matter finding that the merger enabled the hospitals to raise prices through an exercise of market power.
• Policed anticompetitive conduct in the health care, energy, real estate, and high-tech industries, with a particular focus on competitor collaboration and exclusionary conduct. In one important case, the agency filed a new action against Cephalon, Inc., alleging the drugmaker entered into illegal agreements to keep generic formulations of its branded product Provigil off the market.
• Pursued law enforcement actions to stop deceptive lending, debt negotiation and settlement, debt collection, mortgage, and subprime credit schemes that prey on financially strapped consumers.
• Filed enforcement cases to protect consumers’ personal and financial data from technology-driven threats during its collection, storage, use, and disposal. For example, the agency brought its first case alleging violations of the Disposal Rule, claiming that a mortgage broker left sensitive consumer loan documents near an unsecured dumpster.
• Continued enforcement efforts in the technology area against spyware and adware programs that are installed on consumers’ computers without their knowledge or consent. The agency also pursued deceptive spam practices under its CAN-SPAM Act authority.
• Filed cases against defendants who made deceptive health, safety, and weight-loss claims, including those making unsubstantiated claims to prevent, treat or cure a wide range of diseases. Of particular note, the Commission’s case against QT, Inc., was upheld, with a federal court of appeals ruling that the defendants falsely marketed the “Q-Ray Ionized Bracelet” as providing therapeutic relief from arthritis and other chronic conditions. The company was ordered to return nearly $16 million in net profits.
• Initiated a major crackdown on Do Not Call violators, including six settlements against telemarketers and resulting in nearly $7.7 million in civil penalties.
• Held a public workshop on carbon offsets and renewable energy certificates as part of the review of the agency’s Green Guides.
• Continued the growth and development of the Office of International Affairs, building upon its worldwide relationships to help the agency accomplish its law enforcement and advocacy missions.

Copies of the report are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.