Tag: FTC

FTC readies children’s privacy case against Amazon

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The Justice Department has 45 days to bring a case once it is referred. If it declines, the FTC can proceed on its own.
An FTC spokesperson declined to comment. It could not be learned whether the FTC is interested in settling the case, and the company declined to comment. The company previously said it is in compliance with COPPA, and that its Amazon Kids offering for Alexa requires parental consent and gives parents full control over their children’s use of the product.
Much of the attention on the FTC’s investigations of Amazon has been focused on a yearslong antitrust probe of every part of the company’s business, and President Biden’s hard-charging FTC chair, Lina Khan, first gained international prominence with a legal paper outlining an antitrust case against the tech giant.
However, the agency has several ongoing consumer protection investigations into the company, including for potential privacy and data security violations in its Ring camera and home security business.
Financial penalties under COPPA are limited to just over $50,000 per violation, though each affected person is considered a separate violation and the total number can add up quickly for a company the size of Amazon.
The details of the FTC’s COPPA case couldn’t be learned. However, in 2019, a group of consumer and digital rights organizations filed a complaint with the FTC over a version of the company’s Echo Dot smart speaker geared toward kids. Among the allegations, the groups claim Amazon doesn’t properly provide notice to parents on the exact information collected by children using the device, and makes it too difficult to delete data, including transcripts of kids’ interactions with the devices.
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( With inputs from : www.politico.com )

March 31, 2023
FTC won't challenge Amazon's One Medical deal

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The Federal Trade Commission has decided it won’t challenge Amazon’s $3.9 billion deal for primary care provider One Medical, according to a person with direct knowledge of the matter.
The time period in which the FTC can sue to block the deal prior to its closing expires today, the person said. The decision paves the way for the deal to close later this week. The deal, announced in July, had been undergoing an in-depth review at the FTC for the past eight months.
However, while the companies are free to close the deal, the FTC is not ruling out a challenge in the future, and is warning the companies it will continue to investigate. Any FTC challenge, though, would focus on unwinding the deal, a more difficult proposition than preventing it from closing.
“The FTC’s investigation of Amazon’s acquisition of One Medical continues,” said FTC spokesperson Douglas Farrar. “The commission will continue to look at possible harms to competition created by this merger as well as possible harms to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”
Bloomberg earlier reported on the FTC’s decision to not challenge the One Medical deal.
One Medical is the second Amazon acquisition to go unchallenged at the FTC since Lina Khan, a fierce critic of the company, took over the agency in 2021. Amazon’s purchase of MGM Studios also closed without opposition, though the commission at the time was deadlocked 2-2 along partisan lines, preventing a lawsuit.
Federal law provides strict timelines for merger review. Once a deal is filed with the FTC and Justice Department, the agencies have 30 days to decide whether to open an in-depth probe. If they do, the agency reviewing the deal has another 30 days to decide whether to challenge the deal in court after the companies fully comply with all demands for information.
The FTC can agree with merging companies to extend that latter deadline. It couldn’t be learned what agreements Amazon had with the FTC, but Tuesday marked the deadline for the agency to decide on whether to sue.

One Medical is a membership-based primary care provider, with locations around the U.S. Amazon shut down a similar service shortly after it bought One Medical, and a key focus of the investigation was whether Amazon chose to buy a competitor rather than compete with it.
The person with knowledge of the investigation said that while the FTC had serious concerns about the deal, it would have been a challenging case.
An FTC probe of Amazon’s takeover of iRobot, maker of the Roomba robot vacuum, is still underway, as is a more wide-ranging antitrust investigation of the company that is expected to result in a lawsuit later this year, according to two people with knowledge of that investigation.
An Amazon spokesperson declined to comment.
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( With inputs from : www.politico.com )

February 22, 2023
FTC won’t challenge Amazon’s One Medical deal

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“The FTC’s investigation of Amazon’s acquisition of One Medical continues,” said FTC spokesperson Douglas Farrar. “The commission will continue to look at possible harms to competition created by this merger as well as possible harms to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”
Bloomberg earlier reported on the FTC’s decision to not challenge the One Medical deal.
One Medical is the second Amazon acquisition to go unchallenged at the FTC since Lina Khan, a fierce critic of the company, took over the agency in 2021. Amazon’s purchase of MGM Studios also closed without opposition, though the commission at the time was deadlocked 2-2 along partisan lines, preventing a lawsuit.
Federal law provides strict timelines for merger review. Once a deal is filed with the FTC and Justice Department, the agencies have 30 days to decide whether to open an in-depth probe. If they do, the agency reviewing the deal has another 30 days to decide whether to challenge the deal in court after the companies fully comply with all demands for information.
The FTC can agree with merging companies to extend that latter deadline. It couldn’t be learned what agreements Amazon had with the FTC, but Tuesday marked the deadline for the agency to decide on whether to sue.
One Medical is a membership-based primary care provider, with locations around the U.S. Amazon shut down a similar service shortly after it bought One Medical, and a key focus of the investigation was whether Amazon chose to buy a competitor rather than compete with it.
The person with knowledge of the investigation said that while the FTC had serious concerns about the deal, it would have been a challenging case.
An FTC probe of Amazon’s takeover of iRobot, maker of the Roomba robot vacuum, is still underway, as is a more wide-ranging antitrust investigation of the company that is expected to result in a lawsuit later this year, according to two people with knowledge of that investigation.

An Amazon spokesperson declined to comment.
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( With inputs from : www.politico.com )

February 22, 2023
Mark Zuckerberg beats back FTC antitrust challenge

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Bloomberg earlier reported the outcome of Davila’s rulings.
The case was the first to challenge a consumer tech deal from the FTC under Chair Lina Khan — the influential antitrust thinker whom Biden nominated to one of the most powerful corporate watchdog jobs in the federal government. The hearing was closely watched in tech and legal circles as a key test of the FTC’s authority under Khan to pursue alleged anticompetitive conduct using aggressive, largely untested legal theories.
The sealed rulings late Tuesday night from Davila came more than a month after a seven-day hearing, which culminated in Meta CEO Mark Zuckerberg taking the stand in a San Jose, California, federal courtroom to defend the deal.
An administrative trial is currently set to start Feb. 13 and the FTC will also need to decide whether to move forward with that case as well.
Meta originally announced the $440 million deal in late 2021 to purchase Within. The announcement came a day after the company changed its name from Facebook as part of its pivot toward the metaverse. The FTC sued to block the deal in July, arguing that Meta is trying to dominate the nascent virtual reality market through acquisitions rather than boosting competition by attempting to build its own product.
Meta is by far the dominant player in the consumer virtual reality market, with a roughly 85 percent market share for the first three quarters of 2022 according to data from research firm International Data Corporation. ByteDance’s Pico headset was a distant second with about 7.5 percent, and at the hearing the FTC used Meta’s current dominance as evidence of its ability to lock up the market. Meta countered that the industry is still in its early stages, pointing to companies including Apple and Google that are still developing competing products, and the coming rollout of Sony’s new headset this year.
Tuesday’s ruling isn’t the final word on the deal, however. The FTC went to court only to pause the deal while its challenge to the case in its own in-house administrative court plays out. Only a federal judge has the authority to block or pause a merger, but the FTC could choose to continue its case.
If it does, it will be fighting an uphill battle. Any ongoing efforts by the FTC will likely center on unwinding it at a later date, a much more difficult proposition than blocking it in advance. And while Davila’s ruling isn’t binding on the FTC’s in-house judge, Michael Chappell, it will likely weigh heavily in any decision he would make.

The agency typically abandons a merger challenge if it loses the initial preliminary injunction in federal court. If the FTC does continue its case and wins, Meta can then appeal to the FTC commissioners, followed by a federal appeals court of its choice.
Meta also has a pending petition seeking to recuse Khan from the administrative case. In Khan’s role as chair she will act as both prosecutor and judge, and Meta argues that her past statements and work on a Congressional antitrust investigation of the company should disqualify her from participating.
Meta had said throughout the hearing that if the FTC won this first round, the companies would abandon the deal.
FTC lawyers at the December hearing sparred in court with a number of Meta witnesses — including Zuckerberg and one of his top deputies, Andrew Bosworth — over whether the company planned to build or acquire most of the apps that would go on its virtual reality platform, and how essential fitness services are to its ability to gain traction in the metaverse. The FTC’s case hinged largely on whether Meta would have competed in the market if not for the acquisition.
According to previous trial testimony, Meta had a project, code-named “Operation Twinkie,” to partner with fitness equipment maker Peloton and build out its own virtual reality product.
The FTC put much weight on a March 2021 email from Zuckerberg to Bosworth and others, in which the Meta CEO said a partnership with Peloton for a virtual reality game “sounds awesome! I’d love to make that happen. Let me know how I can help.” Meta maintains it never seriously considered entering the market on its own, and the Peloton partnership fizzled out before it broached the idea with the connected bike maker.
The FTC, in a separate case, is attempting to unwind Meta’s 2012 and 2014 purchases of Instagram and WhatsApp — and the agency said it is challenging the company’s strategy of buying existing companies, rather than competing against them. That case was filed during the Trump administration.
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( With inputs from : www.politico.com )

February 1, 2023