Tag: Federal Trade Commission

FTC Announces 2024 Increase in HSR Notification Thresholds and Filing Fees

The Federal Trade Commission (FTC) has announced the annual revisions to the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) thresholds and HSR filing fees, which will become effective on March 6, 2024. The revised thresholds will apply to any merger or acquisition closing on or after the effective date.

The FTC is required to adjust the HSR thresholds annually based upon the change in gross national product. This year, the change in the “size of transaction” threshold has increased from $111.4 million to $119.5 million.

Under the HSR Act, when a deal satisfies the “size of person” and “size of transaction” thresholds, and no exemption from reporting is available, the deal must be reported to the FTC and the US Department of Justice, and the parties must wait for a designated period of time before closing the transaction.

Size of Person. The revised size of person thresholds will generally be met if one party involved in the deal has assets or annual sales totaling $239 million or more and one other party involved in the deal has assets or annual sales of at least $23.9 million. Satisfaction of the size of person thresholds is not required, however, if the transaction is valued at more than $478 million.

Size of Transaction. The revised size of transaction threshold will be met if the buyer will hold an aggregate amount of stock, non-corporate interests and/or assets of the seller valued at more than $119.5 million as a result of the deal.

The notification thresholds applicable to purchases of voting securities will increase as follows:

February 1, 2001 Thresholds (Original) Current Thresholds as of February 27, 2023 New Thresholds Effective March 6, 2024
$50 million $111.4 million $119.5 million
$100 million $222.7 million $239 million
$500 million $1.1137 billion $1.195 billion
25% if worth more than
$1 billion		 25% if worth more than $2.2274 billion 25% if worth more than $2.39 billion
50% if worth more than
$50 million		 50% if worth more than $111.4 million 50% if worth more than $119.5 million

The thresholds applicable to many exemptions, including those governing foreign acquisitions, also will increase. However, the $500 million threshold applicable to acquisitions of producing oil and gas reserves and associated assets will not change.

The civil penalty for failing to comply with the notification and waiting period requirements of the HSR Act has also increased to up to $51,744 per day for each day a party is in violation.

HSR Filing Fees. Additionally, the HSR filing fee thresholds and filing fee amounts have increased as follows:

Original Filing Fee Original Applicable Size of Transaction 2024 Adjusted Filing Fee 2024 Adjusted Applicable Size of Transaction
$30,000 Less than $161.5 million $30,000 Less than $173.3 million
$100,000 Not less than $161.5 million but less than $500 million $105,000 Not less than $173.3 million but less than $536.5 million
$250,000 Not less than $500 million but less than $1 billion $260,000 Not less than $536.5 million but less than $1.073 billion
$400,000 Not less than $1 billion but less than $2 billion $415,000 Not less than $1.073 billion but less than $2.146 billion
$800,000 Not less than $2 billion but less than $5 billion $830,000 Not less than $2.146 billion but less than $5.365 billion
$2,250,000 $5 billion or more $2,335,000 $5.365 billion or more

The new fees also will become effective on March 6, 2024.

© 2024 Bracewell LLP
For more news on FTC Merger and Acquisition Regulations, visit the NLR Antitrust & Trade Regulation section.

FTC Announces 2024 Thresholds for Merger Control Filings under HSR Act and Interlocking Directorates under the Clayton Act

The Federal Trade Commission (“FTC”) has increased the dollar jurisdictional thresholds necessary to trigger the reporting requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), and the dollar value of each of the six filing fee thresholds; the revised thresholds will become effective 30 days after the date of publication in the Federal Register. The daily maximum civil penalty for being in violation of the HSR Act has increased, and is, as of January 10, 2024, $51,744.

The FTC also increased the thresholds for interlocking directorates under Section 8 of the Clayton Act; these revised thresholds are in effect as of January 22, 2024.

Revised HSR Thresholds

Under the HSR Act, parties involved in proposed mergers, acquisitions of voting securities, unincorporated interests or assets, or other business combinations (e.g., joint ventures, exclusive license deals) that meet certain thresholds must report the proposed transaction to the FTC and the Antitrust Division of the U.S. Department of Justice (“DOJ”) unless an exemption applies. The parties to a proposed transaction that requires notification under the HSR Act must observe a statutorily prescribed waiting period (generally 30 days) before closing. Under the revised thresholds, transactions valued at $119.5 million or less are not reportable under the HSR Act.

A transaction closing on or after the date the revised thresholds become effective may be reportable if it meets the following revised criteria:

Size-of-Transaction Test The acquiring person will hold, as a result of the transaction, an aggregate total amount of voting securities, unincorporated interests, or assets of the acquired person valued in excess of $478 million;

or

The acquiring person will hold, as a result of the transaction, an aggregate total amount of voting securities, unincorporated interests, or assets of the acquired person valued in excess of $119.5 million but not more than $478 million, and the Size-of-Person thresholds below are met.
Size-of-Person
Test		 One party (including the party’s ultimate parent entity and its controlled subsidiaries) has at least $239 million in total assets or annual sales, and the other has at least $23.9 million in total assets or annual sales.

The full list of the revised thresholds is as follows:

Original Threshold 2023 Threshold 2024 Revised Threshold
$10 million $22.3 million $23.9 million
$50 million $111.4 million $119.5 million
$100 million $222.7 million $239 million
$110 million $245 million $262.9 million
$200 million $445.5 million $478 million
$500 million $1,113.7 million $1,195 million
$1 billion $2,227.4 million $2,390 million

The filing fees for reportable transactions and the six filing fee tiers also have been updated, as follows:

Filing Fee Size of Transaction under the Act
$30,000 For transactions valued in excess of $119.5 million but less than $173.3 million
$105,000 For transactions valued at $173.3 million or greater but less than $536.5 million
$260,000 For transactions valued at $536.5 million or greater but less than $1,073 million
$415,000 For transactions valued at $1,073 million or greater but less than $2,146 million
$830,000 For transactions valued at $2,146 million or greater but less than $5,365 million
$2.335 million For transactions valued at $5,365 million or more

The filing fee tiers, introduced in 2023, are adjusted annually to reflect changes in the GNP for the previous year.

The HSR Act’s dollar thresholds are only part of the analysis to determine whether a particular transaction must be reported to the FTC and DOJ; a full analysis requires consideration of exemptions to the filing requirements that may be available to an acquiror. Failure to notify the FTC and DOJ under the HSR Act remains subject to a statutory penalty of up to $51,744 per day of noncompliance.

Revised Thresholds for Interlocking Directorates

Section 8 of the Clayton Act prohibits one person from simultaneously serving as an officer or director of two corporations if: (1) each of the “interlocked” corporations has combined capital, surplus, and undivided profits of more than $48,559,000 (up from $45,257,000); (2) each corporation is engaged in whole or in part in commerce; and (3) the corporations are “by virtue of their business and location of operation, competitors, so that the elimination of competition by agreement between them would constitute a violation of any of the antitrust laws.”1

Section 8 provides several exemptions from the prohibition on interlocks for arrangements where the competitive overlaps “are too small to have competitive significance in the vast majority of situations.”2 A corporate interlock does not violate the statute if (1) the competitive sales of either corporation are less than $4,855,900 (up from $4,525,700); (2) the competitive sales of either corporation are less than 2 percent of that corporation’s total sales; or (3) the competitive sales of each corporation are less than 4 percent of that corporation’s total sales. The DOJ has been active recently in identifying and achieving remediation of interlocks that may violate Section 8.3

1 15 U.S.C. § 19(a)(1)(B).

2 S. Rep. No. 101-286, at 5-6 (1990), reprinted in 1990 U.S.C.C.A.N. 4100, 4103-04.

3 Department of Justice, Two Pinterest Directors Resign from Nextdoor Board of Directors in Response to Justice Department’s Ongoing Enforcement Efforts Against Interlocking Directorates (Aug. 16, 2023); Department of Justice, Justice Department’s Ongoing Section 8 Enforcement Prevents More Potentially Illegal Interlocking Directorates (Mar. 9, 2023); Department of Justice, Directors Resign from the Boards of Five Companies in Response to Justice Department Concerns about Potentially Illegal Interlocking Directorates (Oct. 19, 2022).

© Copyright 2024 Cadwalader, Wickersham & Taft LLP
For more on Merger Control Filings, visit the NLR Antitrust & Trade Regulation section.

Updated Merger Guidelines Finalized

On December 18, 2023, the Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) jointly issued a significantly revised version of the Merger Guidelines that describes the frameworks the enforcement agencies use when evaluating potential mergers.

The newly finalized Merger Guidelines are the result of a nearly two-year effort that involved both agencies soliciting public input via listening sessions, written comments, and workshops.

The agencies describe the new Merger Guidelines as necessary to address the modern economy and how firms now do business. The Merger Guidelines are broken into multiple sections: Guidelines 1–6 describe the frameworks the agencies use when attempting to identify a merger that the agencies believe raises a prima facie concern, while Guidelines 7–11 explain how to apply those frameworks in specific settings. The guidelines also identify evidence the agencies will consider to potentially rebut an inference of competitive harm. Finally, these guidelines include a discussion of the tools the agencies use when evaluating the relevant facts, the potential harm to competition, and how to define the relevant markets.

The Merger Guidelines are notable for signaling the FTC’s and DOJ’s desire to pursue a more aggressive enforcement agenda, specifically, by lowering the threshold at which proposed mergers will be deemed presumptively anticompetitive by those enforcement agencies. The new guidelines also seek to address relatively new concerns the agencies have identified, such as cross-market transactions and sequences of smaller transactions.

©2024 Epstein Becker & Green, P.C. All rights reserved.
For more on Merger Guidelines, visit the NLR Antitrust & Trade Regulation section.

FTC to Send Nearly $100 Million in Refunds in Vonage Settlement

On October 30, 2023, the Federal Trade Commission announced that it is sending nearly $100 million in refunds to consumers who were harmed as a result of internet phone service provider Vonage’s alleged use of dark patterns and other obstacles that made it difficult for users to cancel their service.

In its November 2022 complaint against Vonage, the FTC alleged that Vonage made its cancellation process more difficult to navigate than its enrollment process. In particular, Vonage allegedly restricted users to a single method of cancellation, charged unexpected early termination fees, continued to charge users after they canceled, and issued only partial refunds for overbilled amounts. Vonage and the FTC subsequently reached a settlement where Vonage agreed to pay $100 million in refunds to consumers harmed by the company’s actions, implement a simple and transparent cancellation process, and stop charging consumers without their consent.

The FTC is now in the process of sending payments to 389,106 consumers. Eligible consumers will receive refunds by check or PayPal.

 

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Copyright © 2023, Hunton Andrews Kurth LLP. All Rights Reserved.
By Hunton Andrews Kurth’s Privacy and Cybersecurity of Hunton Andrews Kurth
For more news on Federal Trade Commission Refunds, visit the NLR Antitrust & Trade Regulation section.

FTC and DOJ Propose Significant Changes to US Merger Review Process

On 27 June 2023, the Federal Trade Commission (FTC) and the Department of Justice–Antitrust Division (DOJ) (collectively, the Agencies) announced sweeping proposed changes to the US-premerger notification filing process. The proposed changes mark the first significant overhaul of the federal premerger notification form since its original release in 1978 and would require parties to report

On 27 June 2023, the Federal Trade Commission (FTC) and the Department of Justice–Antitrust Division (DOJ) (collectively, the Agencies) announced sweeping proposed changes to the US-premerger notification filing process. The proposed changes mark the first significant overhaul of the federal premerger notification form since its original release in 1978 and would require parties to reportable transactions to collect and submit significantly more information and documentation as part of the premerger review process. If finalized, the proposed rule changes would likely delay deal timelines by months, requiring significantly more time and effort by the parties and their counsel in advance of submitting the required notification form.

In this alert, we:

  • Provide an overview of the current merger review process in the United States;
  • Describe the proposed new rules announced by the Agencies;
  • Explain the Agencies’ rationale for the new proposed rules;
  • Predict how the proposed new rules could impact parties’ premerger filing obligations, including deal timelines; and
  • Explain what companies should expect over the next several months.

BACKGROUND ON THE HSR MERGER REVIEW PROCESS

The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act or “HSR”) requires certain persons making acquisitions of assets, voting securities, and non-corporate interests (i.e., interests in partnerships and limited liability companies) to:

(a)    File premerger notifications with the FTC and DOJ; and

(b)    Wait until the expiration or termination of a waiting period (usually 30 days) before consummating the acquisition.

Most mergers and acquisitions valued in excess of USD$111.4 million fall under the HSR Act subject to size-of-party thresholds in certain cases. Additionally, there are several exemptions that may apply to an otherwise reportable transaction.

The FTC or the DOJ reviews the parties’ HSR filings during the waiting period to determine whether the transaction may substantially lessen competition in violation of the antitrust laws. If, at the end of the waiting period any concerns have not been placated, the reviewing agency may issue a Request for Additional Documents and Information (commonly referred to as a Second Request), a very broad subpoena-like document seeking documents, data, and interrogatory responses from the filers. This tolls the waiting period until both parties substantially comply with the Second Request. The reviewing agency then has an additional 30-day period to decide whether to challenge the transaction in court.

WHAT ARE THE PROPOSED CHANGES?

On 27 June 2023, the FTC and DOJ announced a number of significant changes to the HSR notification form and filing process, the first such overhaul in almost 45 years. The Agencies released the proposed changes and rationale for the same in a 133-page Notice of Proposed Rulemaking (Notice) that will be published in the Federal Register later this week. While antitrust practitioners are still digesting the full extent of all of the proposed changes, it is clear that they would require parties to submit significantly more information and documentation to the Agencies as part of their HSR notification form. The most notable additional information and documentation includes:

  • Submission of additional deal documents, including draft agreements or term sheets (as opposed to just the preliminary agreement), where a definitive transaction agreement has not yet been executed; draft versions of all deal documents (as opposed to just the final versions); documents created by or for the deal team lead(s) (as opposed to just officers and directors); and verbatim translations of all foreign language documents.
  • Details about acquisitions during the previous 10 years.
  • Identification of and information about all officers, directors, and board observers of all entities within the acquiring person, including the identification of other entities these individuals currently serve, or within the two years prior to filing had served, as an officer, director, or board observer.
  • Identification of and information about all creditors and entities that hold non-voting securities, options, or warrants totaling 10% or more.
  • Disclosure of subsidies (e.g., grants and loans), by certain foreign governments, including North Korea, China, Russia, and Iran.
  • Narrative description of the strategic rationale for the transaction (including projected revenue streams), a diagram of the deal structure, and a timeline and narrative of the conditions for closing.
  • Identification and narrative describing horizontal overlaps, both current and planned.
  • Identification and narrative describing supply agreements/relationships.
  • Identification and narrative describing labor markets, as well as submission of certain data on the firms’ workforce, including workforce categories, geographic information on employees, and details on labor and workplace safety violations.
  • Identification of certain defense or intelligence contracts.
  • Identification of foreign jurisdictions reviewing the deal.

WHY ARE THESE CHANGES BEING PROPOSED?

In its press release announcing the proposed new rules, the FTC stated that “[t]he proposed changes to the HSR Form and instructions would enable the Agencies to more effectively and efficiently screen transactions for potential competition issues within the initial waiting period, which is typically 30 days.”1 The FTC further explained:

Over the past several decades, transactions (subject to HSR filing requirements) have become increasingly complex, with the rise of new investment vehicles and changes in corporate acquisition strategies, along with increasing concerns that antitrust review has not sufficiently addressed concerns about transactions between firms that compete in non-horizontal ways, the impact of corporate consolidation on American workers, and growth in the technology and digital platform economies. When the Agencies experienced a surge in HSR filings that more than doubled filings from 2020 to 2021, it became impossible to ignore the changes to the transaction landscape and how much more complicated it has become for agency staff to conduct an initial review of a transaction’s competitive impact. The volume of filings at that time also highlighted the significant limitations of the current HSR Form in understanding a transaction’s competitive impact.2

Finally, the FTC also cited certain Congressional concerns and the Merger Fee Filing Modernization Act of 2022, stating that the “proposed changes also address Congressional concerns that subsidies from foreign entities of concern can distort the competitive process or otherwise change the business strategies of a subsidized firm in ways that undermine competition following an acquisition. Under the Merger Filing Fee Modernization Act of 2022, the agencies are required to collect information on subsidies received from certain foreign governments or entities that are strategic or economic threats to the United States.”

HOW WILL THESE CHANGES POTENTIALLY IMPACT PARTIES’ HSR FILINGS?

The proposed changes, as currently drafted, would require significantly more time and effort by the parties and their counsel to prepare the parties’ respective HSR notification forms. For example, the proposed new rules require the identification, collection, and submission of more deal documents and strategic documents; significantly more information about the parties, their officers, directors and board observers, minority investments, and financial interests; and narrative analyses and descriptions of horizontal and non-horizontal relationships, markets, and competition. Gathering, analyzing, and synthesizing this information into narrative form will require significantly more time and resources from both the parties and their counsel to comply.

Under the current filing rules, it typically takes the merging parties about seven to ten days to collect the information needed for and to complete the HSR notification form. Under the proposed new rules, the time to gather such information and complete an HSR notification form could be expanded by multiple months.

WHAT IS NEXT?

The Notice will be published in the Federal Register later this week. The public will then have 60 days from the date of publication to submit comments. Following the comment period, the Agencies will review and consider the comments and then publish a final version of the new rules. The new rules will not go into effect until after the Agencies publish the final version of the new rules. This process will likely take several months to complete, and the new rules–or some variation of them–will not come into effect until that time.

While the final form of the proposed rules are not likely to take effect for several months, the Agencies’ sweeping proposed changes to the notification form and filing process are in line with the type of information that the Agencies have been increasingly requesting from parties during the merger review process. Accordingly, parties required to submit HSR filings over the next several months should be prepared to receive similar requests from the Agencies, either on a voluntary basis (e.g., during the initial 30-day waiting period) or through issuance of a Second Request, and they should build into their deal timeline (either pre- or post-signing) sufficient time to comply with these requests.

 

1 “FTC and DOJ Propose Changes to HSR Form for More Effective, Efficient Merger Review,” FTC Press Release, June 27, 2023, available at FTC and DOJ Propose Changes to HSR Form for More Effective, Efficient Merger Review | Federal Trade Commission.  

2 “Q and A on the Notice of Proposed Rulemaking for the HSR Filing Process,” FTC Proposed Text of Federal Register Publication, available at 16 CFR Parts 801 and 803: Premerger Notification; Reporting and Waiting Period Requirements | Federal Trade Commission (ftc.gov).

Copyright 2023 K & L Gates

How to Succeed in Environmental Marketing Claims

Environmental marketing claims often present something of a Catch-22—companies that are doing actual good for the environment deserve to reap the benefits of their efforts, and consumers deserve to know, while at the same time, heightened scrutiny from the Federal Trade Commission (FTC), the National Advertising Division (NAD), state regulators and the plaintiffs’ bar have made such claims increasingly risky.

In 2012, the FTC issued the Green Guides for the use of environmental marketing claims to protect consumers and to help advertisers avoid deceptive environmental marketing. Compliance with the Green Guides may provide a safe harbor from FTC enforcement, and from liability under state laws, such as California’s Environmental Marketing Claims Act, that incorporate the Green Guides. The FTC has started a process to revise the Green Guides, including a request for comments about the meaning of “sustainable.” In the meantime, any business considering touting the environmental attributes of its products should consider the following essential takeaways from the Green Guides in their current form:

    • Substantiation: Substantiation is key! Advertisers should have a reasonable basis for their environmental claims. Substantiation is the support for a claim, which helps ensure that the claim is truthful and not misleading or deceptive. Among other things, substantiation requires documentation sufficient to verify environmental claims.
    • General benefit claims: Advertisers should avoid making unqualified claims of general benefit because substantiation is required for each reasonable interpretation of the claim. The more narrowly tailored the claim, the easier it is to substantiate.
    • Comparative claims: Advertisers should be careful and specific when making comparative claims. For example, a claim that states “20% more recycled content” begs the question: “compared to what?” A prior version of the same product? A competing product? Without further detail, the advertiser would be responsible for the reasonable interpretation that the product has 20% more recycled content than other brands, as well as the interpretation that the product has 20% more recycled content than the advertiser’s older products.
    • General greenwashing terms: Advertisers should be very cautious when using general environmental benefit terms such as “eco-friendly,” “sustainable,” “green,” and “planet-friendly.” Those kinds of claims feature prominently in many complaints alleging greenwashing, and they should only be used where the advertiser knows and explains what the term means, and can substantiate every reasonable interpretation of the claim.

Putting it into Practice: Given the scrutiny that environmental claims tend to attract, advertisers should exercise care when making environmental benefit claims about their products and services. They should narrowly tailor their claims to the specific environmental attributes they want to promote, and perhaps most important, they should ensure they have adequate backup to substantiate their claims. While the FTC Green Guides are due for a refresh (which we will surely report on), for the time being, they will continue to serve as important guidance for advertisers seeking to inform consumers without exposing their business to FTC scrutiny or class action litigation.

FTC Launches New Office of Technology

On February 17, 2023, the Federal Trade Commission announced the launch of their new Office of Technology. The Office of Technology will assist the FTC by strengthening and supporting law enforcement investigations and actions, advising and engaging with staff and the Commission on policy and research initiatives, and engaging with the public and relevant experts to identify market trends, emerging technologies and best practices. The Office will have dedicated staff and resources and be headed by Chief Technology Officer Stephanie T. Nguyen.

Article By Hunton Andrews Kurth’s Privacy and Cybersecurity Practice Group

For more privacy and cybersecurity legal news, click here to visit the National Law Review.

Copyright © 2023, Hunton Andrews Kurth LLP. All Rights Reserved.

The FTC Announces First Health Breach Notification Rule Enforcement Action

On February 1, the Federal Trade Commission (“FTC”) announced enforcement action for the first time under its Health Breach Notification Rule[1]. The complaint against telehealth and prescription drug discount provider GoodRx Holdings Inc. (“GoodRx”), alleges its failure to notify consumers and others of its unauthorized disclosures of consumers’ personal health information to Facebook, Google and other companies.

In a first-of-its-kind proposed order, filed by the Department of Justice on behalf of the FTC, GoodRx will be prohibited from sharing user health data with applicable third parties for advertising purposes, and has agreed to pay a $1.5 million civil penalty for violating the rule. The proposed order must be approved by the federal court to go into effect. The Health Breach Notification Rule requires vendors of personal health records and related entities, which are not covered by the Health Insurance Portability and Accountability Act (HIPAA), to notify consumers and the FTC of unauthorized disclosures. In a September 2021 policy statement, the FTC warned health apps and connected devices that they must comply with the rule.

According to the FTC’s complaint, for years GoodRx violated the FTC Act by sharing sensitive personal health information with advertising companies and platforms—contrary to its privacy promises—and failed to report these unauthorized disclosures as required by the Health Breach Notification Rule.  Specifically, the FTC claims GoodRx shared personal health information with Facebook, Google, Criteo and others. According to the FTC, since at least 2017, GoodRx deceptively promised its users that it would never share personal health information with advertisers or other third parties. GoodRx repeatedly violated this promise by sharing sensitive personal health information—such as including its users’ prescription medications and personal health conditions.

The FTC also alleges GoodRx monetized its users’ personal health information, and used data it shared with Facebook to target GoodRx’s own users with personalized health and medication-specific advertisements on Facebook and Instagram.

The FTC further alleges that GoodRx:

  • Failed to Limit Third-Party Use of Personal Health Information: GoodRx allowed third parties it shared data with to use that information for their own internal purposes, including for research and development or to improve advertising.
  • Misrepresented its HIPAA Compliance: GoodRx displayed a seal at the bottom of its telehealth services homepage falsely suggesting to consumers that it complied with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), a law that sets forth privacy and information security protections for health data.
  • Failed to Implement Policies to Protect Personal Health Information: GoodRx failed to maintain sufficient policies or procedures to protect its users’ personal health information. Until a consumer watchdog publicly revealed GoodRx’s actions in February 2020, GoodRx had no sufficient formal, written, or standard privacy or data sharing policies or compliance programs in place.

In addition to the $1.5 million penalty for violating the rule, the proposed federal court order also prohibits GoodRx from engaging in the deceptive practices outlined in the complaint and requires the company to comply with the Health Breach Notification Rule. To remedy the FTC’s numerous allegations, other provisions of the proposed order against GoodRx also:

  • Prohibit the sharing of health data for advertising: GoodRx will be permanently prohibited from disclosing user health information with applicable third parties for advertising purposes.
  • Require user consent for any other sharing: GoodRx must obtain users’ affirmative express consent before disclosing user health information with applicable third parties for other purposes. The order requires the company to clearly and conspicuously detail the categories of health information that it will disclose to third parties.  It also prohibits the company from using manipulative designs, known as dark patterns, to obtain users’ consent to share the information.
  • Require the company to seek deletion of data: GoodRx must direct third parties to delete the consumer health data that was shared with them and inform consumers about the breaches and the FTC’s enforcement action against the company.
  • Limit Retention of Data: GoodRx will be required to limit how long it can retain personal and health information according to a data retention schedule. It also must publicly post a retention schedule and detail the information it collects and why such data collection is necessary.
  • Implement a Mandated Privacy Program: GoodRx must put in place a comprehensive privacy program that includes strong safeguards to protect consumer data.

© 2023 Dinsmore & Shohl LLP. All rights reserved.

For more Cybersecurity and Privacy Legal News, click here to visit the National Law Review

FOOTNOTES

[1] 16 CFR Part 318

Future of Non-Competes Up in the Air

Future of Non-Competes Up in the Air

The FTC recently announced its proposal to ban non-compete clauses in employment agreements. That proposal is currently in a 60-day period of public comment, and employers are (understandably) nervous. While many employers rely on these provisions to manage competition and protect their IP and confidential information, companies across the country may soon find themselves in the shoes of California employers, having to work around restrictions on non-competes to maximize protection within the increasingly narrow confines of the law.

Employers are not without options in responding to the potential changes should they become law–more aggressive retention incentives, intelligent data security, and stricter confidentiality agreements should all be part of the conversation. Even deferred compensation could be on the table, as noted in the article, though beware of the tax implications. Employers should also keep in mind that the FTC proposal, should it become law, will doubtless be subject to legal challenges and could be tied up in the courts for a while before becoming effective.

“Observers on both sides say that limitations on the clauses will compel employers to get more creative about how they retain talent, using everything from compensation to career advancement to keep workers engaged and loyal to the company. Some companies use deferred compensation—such as retention bonuses or rolling stock options that vest after, say, three years—to give people incentives to stay.”

©1994-2023 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

FTC Starts Long-Awaited Green Guides Review

  • On December 14, 2022, at an open meeting of the Federal Trade Commission (“FTC” or “Commission”), FTC commissioners voted unanimously to publish a Notice in the Federal Register announcing a Request for Public Comments on potential amendments to the Commission’s Guides for the Use of Environmental Marketing Claims (“Green Guides” or “Guides”).
  • The FTC solicits comments on the ongoing need for the Guides and on specific claims addressed in the Guides, including “recyclable,” “recycled content,” “degradable,” “compostable,” and more. It also asks if it should initiate a rulemaking process and address claims it declined to consider during the last review, such as “organic” and “sustainable.”
  • Importantly, given the growth in some state laws that purport to restrict claims, the FTC asks for input on whether the Guides conflict with federal or state laws. This proceeding is expected to garner significant input.
  • Once the Notice is published in the Federal Register (which the FTC anticipates will be in mid-January 2023), interested stakeholders will have 60 days from the date of the Notice to submit comments to the FTC, unless an extension is granted.
  • For more information about the FTC Notice, please read our report here.

© 2022 Keller and Heckman LLP

For more Energy and Environmental Law news, click here to visit the National Law Review.