In a stunning setback to regulators’ efforts to break up Facebook, a federal judge on Monday threw out antitrust lawsuits brought against the company by the Federal Trade Commission and more than 40 states.
Federal regulators are ordering Facebook, Twitter, Amazon, TikTok’s parent and five other social media companies to provide detailed information on how they collect and use consumers’ personal data and how their practices affect children and teens.
The U.S. and state cases against the social network are far from a slam dunk because the standards of proof are formidable.
The Federal Trade Commission and more than 40 states accused Facebook on Wednesday of buying up its rivals to illegally squash competition, and they called for the deals to be unwound, escalating regulators’ battle against the biggest tech companies in a way that could remake the social media industry.
The Federal Trade Commission is moving closer to a decision about filing an antitrust lawsuit against Facebook for its market power in social networking, according to two people with knowledge of the agency’s talks.
The Federal Trade Commission announced it reached a settlement putting a stop to the deceptive tactics of a Californian internet marketer that allegedly tricked British consumers into believing it was based in the United Kingdom by using websites with CO.UK domains. Under the settlement, the company also is banned from charging consumers for goods until they are in hand and ready to be shipped.The case was brought by the FTC under provisions added to the FTC Act by the U.S. SAFE WEB Act of 2006. SAFE WEB confirmed the agency’s authority to sue U.S.-based wrongdoers who harm consumers abroad, as part of a strategy to prevent the United States from becoming a haven for fraud.According to the FTC, California internet marketer Jaivin Karnani, his company, Balls of Kryptonite, and several associated companies, sold cameras, video games, and other electronic goods to thousands of British consumers. Because the defendants used websites with domain names such as bestpricedbrands.co.uk, bitesizedeals.co.uk, and crazycameras.co.uk, consumers believed they were buying from a company operating in the United Kingdom, and were therefore protected by manufacturer warranties that were valid there.The FTC’s complaint, filed in 2009, alleged that when consumers received the goods, they discovered they had been charged unexpected import duties, were left with invalid warranties, and would be charged draconian cancellation and refund fees if they attempted to return the merchandise. The defendants promised fast shipping dates, but usually did not meet those dates. Without the prior consent of consumers, as required by the FTC’s Mail or Telephone Order Merchandise Rule (Mail Order Rule), the defendants allegedly shipped the goods much later than promised. When customers tried to cancel these delayed orders, they were met with stiff resistance, no response at all, or otherwise had difficulty obtaining refunds.The FTC also charged the defendants with deceiving consumers about their participation in the EU/US Safe Harbor Framework – a voluntary international program that provides a means for U.S. companies to transfer data from the European Union to the United States, and to assure European customers that they secure the customers’ personal information as required by EU law.The settlement order prohibits the defendants from misrepresenting: the location, quality, quantity, characteristics, and model numbers of products they sell; their compliance with or certification by government-sponsored information security programs; their policies regarding cancellation, exchange, or return; the existence of product warranties; and the total cost of the products sold.The FTC settlement order also prohibits the defendants from violating the Mail Order Rule, and it imposes a $500,000 judgement, which is suspended based on the defendants’ inability to pay. If it is determined that the financial information the defendants gave the FTC was untruthful, the full amount of the judgement will become due.More information is available from the FTC website here.
The Federal Trade Commission has permanently halted the operations of Canadian con artists who allegedly posed as domain name registrars and convinced thousands of U.S. consumers, small businesses and non-profit organisations to pay bogus bills by leading them to believe they would lose their domain names unless they paid.In the case a federal district court judge in Chicago, Robert M. Dow, Jr., ordered a temporary halt to the deceptive claims and froze the defendants’ assets, pending trial. The settlement and default judgment orders announced today end that litigation. The settlement order and default judgement were made in March, however the judgement was only made public on Monday this week.Settlement and default judgment orders signed by the court will bar the deceptive practices in the future, although stipulated orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. However stipulated orders have the full force of law when signed by the judge.In June 2008, the FTC charged Toronto-based Internet Listing Service with sending fake invoices to small businesses and others, listing the existing domain name of the consumer’s web site or a slight variation on the domain name, such as substituting “.org” for “.com.” The invoices appeared to come from the businesses’ existing domain name registrar and instructed them to pay for an annual “WEBSITE ADDRESS LISTING.” The invoices also claimed to include a search engine optimization service. Most consumers who received the “invoices” were led to believe that they had to pay them to maintain their registrations of domain names. Other consumers were induced to pay based on Internet Listing Service’s claims that its “Search Optimization” service would “direct mass traffic” to their sites and that their “proven search engine listing service” would result in “a substantial increase in traffic.”The FTC’s complaint charged that most consumers who paid the defendants’ invoices did not receive any domain name registration services and that the “search optimization” service did not result in increased traffic to the consumers’ Web sites.The orders bar the defendants from misrepresenting: that they have a preexisting business relationship with consumers; that consumers owe them money; that they will provide domain name registration; and that they will provide “search optimization services” that will substantially increase traffic to consumers’ Web sites. The defendants are also required to disclose any material restrictions or aspects of any goods or services they provide.The settlement order, entered against defendants Isaac Benlolo, Kirk Mulveney, Pearl Keslassy, and 1646153 Ontario Inc., includes a suspended judgment of $4,261,876, the total amount of consumer injury caused by the illegal activities. Based on the inability of the settling defendants to pay, they will turn over $10,000 to satisfy the judgment. The default judgment order was entered against defendant Steven E. Dale and includes a judgment in the amount of $4,261,876.Charges against Ari Balabanian and Data Business Solutions were dismissed by the court at the FTC’s request.