FTC recommends children’s protections, secures settlements, sues Amazon

FTC lawsuit, settlement, recommendations overview: 

• Who: The Federal Trade Commission (FTC) recently filed a lawsuit against Amazon, secured settlements with Epic Games and Amgen and made recommendations to tax preparation companies and advertisers. 
• Why: The lawsuit alleged antitrust violations, the Epic Games settlement ended consumer deception claims, the Amgen settlement will allow the company to proceed with its purchase of Horizon Therapeutics and the recommendations involve blurred advertising and confidential customer data misuse. 
• Where: The FTC works to enforce civil antitrust law and promote consumer protection nationwide. 

The Federal Trade Commission (FTC) recently filed a lawsuit, secured two settlements and made recommendations on blurred advertising and the intentional misuse of confidential customer data. 

The FTC is an independent U.S. government agency that works to enforce civil antitrust law and promote consumer protection. 

FTC secures $245M settlement with Epic Games over Fortnite

Last month, the FTC secured a $245 million settlement deal with Epic Games, the creator of online video game Fortnite, that resolved claims the company tricked its young users into making large purchases. 

The agency argued Epic Games used misleading business practices to charge players for items they did not want and allowed children to make large purchases using credit cards then locked the accounts of users who disputed the charges. 

In addition to the $245 million settlement, Epic Games agreed to pay $275 million in penalties to the FTC. 

Amazon created monopoly in online marketplace, FTC says

The FTC, along with the attorneys general from 17 states, filed a lawsuit against Amazon.com late last month over claims the company created a monopoly that limits online competition, hurts consumers and violates federal antitrust laws.  

Amazon is accused of implementing fees that take as much as half of sellers’ revenue and showcasing “pay-for-play” advertised products to its customers rather than tailored recommendations. 

“Most sellers must now pay for advertising to reach Amazon’s massive base of online shoppers, while shoppers consequently face less relevant search results and are steered toward more expensive products,” the Amazon lawsuit states. 

The FTC and 17 state attorneys general claim Amazon hurts both consumers and sellers.

FTC warns tax preparation companies on using confidential data 

The FTC warned a number of tax preparation companies they could be subject to civil penalties if they use or disclose confidential customer data or non-tax related purposes. 

The commission voted 3-0 to authorize issuing and the warning notice to H&R Block, Intuit, TaxAct, TaxSlayer,and The Lambo Group, which does business as Ramsey Solutions. 

The FTC warned tax preparation companies they would violate the FTC Act if they used confidential data for unrelated purposes, such as to advertise, sell or promote their products or services. 

“Companies that violate (Americans’) privacy by seeking to monetize personal data without consent can face significant financial consequences,” Samuel Levine, the director of the FTC’s bureau of consumer protection, says in a statement. 

The FTC says tax preparation companies that misuse the personal data could face civil penalties of up to $50,120 per violation. 

FTC issues recommendations on children’s advertising

The FTC released recommendations on how to prevent children from being harmed by online advertising, particularly on how to clearly distinguish between advertising and entertainment in immersive kids’ games, also called blurred advertising. 

“Blurred advertising allows marketers to disguise advertising, and younger consumers may not be able to avoid it or evaluate it sufficiently given their focus on the content, the staff paper noted,” the FTC states in its recommendations. 

The agency says it will take a combined effort to protect children from blurred advertising and companies that choose to use the tactic could be held accountable through the FTC Act if they are found its conduct was deceptive or unfair to children. 

FTC allows Amgen to purchase Horizon Therapeutics

In September, the FTC announced it will allow pharmaceutical giant Amgen to proceed with its $27.8 billion purchase of Horizon Therapeutics, avoiding litigation of claims the merger would be anticompetitive. 

Prior to reaching an agreement with Amgen, the FTC filed a lawsuit to block the proposed purchase, arguing it would allow Amgen to pressure insurance companies and pharmaceutical managers into favoring Tepezza and Krystexxa, Horizon’s monopoly drugs. 

Amgen is required to get FTC approval prior to entering into any agreement related to business dealings involving drugs that treat thyroid eye disease or chronic refractory gout, per its agreement with the agency. 

Have you been affected by an FTC lawsuit, settlement or recommendation? Let us know in the comments. 

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