FTC

On August 14, the FTC announced a final rule that, according to the FTC, is intended to “combat fake reviews and testimonials.”  The rule will go into effect on October 21, 2024.  This final rule is the culmination of the FTC’s issuance of an advance notice of proposed rulemaking (ANPRM)…

Continue Reading FTC Issues Final Rule on Reviews and Testimonials

On July 9, 2024, the FTC and California Attorney General settled a case against NGL Labs (“NGL”) and two of its co-founders. NGL Labs’ app, “NGL: ask me anything,” allows users to receive anonymous messages from their friends and social media followers. The complaint alleged violations of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), the Children’s Online Privacy Protection Act (COPPA), and California laws prohibiting deceptive advertising and prohibiting unfair and deceptive business practices.Continue Reading FTC Reaches Settlement with NGL Labs Over Children’s Privacy & AI

Last month, the Federal Trade Commission (“FTC”) announced its enforcement action against telehealth firm, Cerebral, Inc. (“Cerebral”), for its alleged unauthorized disclosures of consumers’ sensitive personal health information and other sensitive data to third parties for advertising purposes in violation of the FTC Act.  The complaint also alleges that Cerebral violated the Opioid Addiction Recovery Fraud Prevention Act (“OARFPA”), and the Restore Online Shoppers’ Confidence Act (“ROSCA”), which permits the court to order permanent injunctive relief, civil penalties, and other monetary relief for actions in violations of specific sections of the FTC Act, the OARFPA, and the ROSCA.  According to the proposed order, Cerebral must pay more than $7 million in civil penalties and consumer refunds.  In addition, Cerebral will be banned from using or disclosing consumers’ personal and health information (including online identifiers, such as IP addresses or other persistent identifiers) for advertising and must obtain consumers’ affirmative express consent before disclosing such information to outside parties.

Below is a discussion of the complaint and proposed order.Continue Reading FTC Announces Health Privacy Enforcement Action Against Telehealth Company, Cerebral

On Friday, April 26, 2024, the Federal Trade Commission (“FTC”) voted 3-2 to issue a final rule (the “final rule”) that expands the scope of the Health Breach Notification Rule (“HBNR”) to apply to health apps and similar technologies and broadens what constitutes a breach of security, among other updates.  We previously covered the proposed rule, which was issued on May 18, 2023.

In the FTC’s announcement of the final rule, the FTC emphasized that “protecting consumers’ sensitive health data is a high priority for the FTC” and that the “updated HBNR will ensure [the HBNR] keeps pace with changes in the health marketplace.”  Key provisions of the final rule include:Continue Reading FTC Issues Final Rule to Expand Scope of the Health Breach Notification Rule

On January 9, the FTC published a blog post discussing privacy and confidentiality obligations for companies that provide artificial intelligence (“AI”) services.  The FTC described “model-as-a-service” companies as those that develop, host, and provide pre-trained AI models to users and businesses through end-user interfaces or application programming interfaces (“APIs”).  According…

Continue Reading FTC on Models-as-a-Service

On December 19, 2023, the Federal Trade Commission (“FTC”) announced that it reached a settlement with Rite Aid Corporation and Rite Aid Headquarters Corporation (collectively, “Rite Aid”) to resolve allegations that the companies violated Section 5 of the FTC Act (as well as a prior settlement with the agency) by failing to implement reasonable procedures to prevent harm to consumers while using facial recognition technology.  As part of the settlement, Rite Aid agreed to cease using “Facial Recognition or Analysis Systems” (defined below) for five years and establish a monitoring program to address certain risks if it seeks to use such systems for certain purposes in the future.Continue Reading Rite Aid Settles FTC Allegations Regarding Use of Facial Recognition Technology

On October 3, the Federal Trade Commission (“FTC”) released a blog post titled Consumers Are Voicing Concerns About AI, which discusses consumer concerns that the FTC received via its Consumer Sentinel Network concerning artificial intelligence (“AI”) and priority areas the agency is watching.  Although the FTC’s blog post acknowledged…

Continue Reading FTC Publishes Blog Post Summarizing Consumer Concerns with AI Systems

On September 15, the Federal Trade Commission (“FTC”) and U.S. Department of Health and Human Services (“HHS”) announced an updated joint publication describing the privacy and security laws and rules that impact consumer health data.  Specifically, the “Collecting, Using, or Sharing Consumer Health Information? Look to HIPAA, the FTC Act, and the Health Breach Notification Rule” guidance provides an overview of the Health Insurance Portability and Accountability Act, as amended, and the implementing regulations issued by HHS (collectively “HIPAA”); the FTC Act; and the FTC’s Health Breach Notification Rule (“HBNR”) and how they may apply to businesses.  This joint guidance follows a recent surge of FTC enforcement in the health privacy space.  We offer below a high-level summary of the requirements flagged by the guidance.Continue Reading FTC and HHS Announce Updated Health Privacy Publication

On June 30, the FTC announced that it had issued a new notice of proposed rulemaking that addresses fake reviews and testimonials.  The rule prohibits practices the Commissioners have identified as problematic in public statements for the past several years.  For instance, when announcing the review of the Endorsement Guides over a year ago, Chair Khan noted that “consumers’ increasing reliance on online reviews can also incentivize advertisers to harness fake reviews, suppress negative reviews, and amplify positive ones.”  The proposed rule covers a variety of topics including fake reviews, review hijacking, purchasing reviews, employee reviews, review suppression, and the use of fake indicators of social media influence.  Several of the new provisions track principles set forth in prior FTC cases, or target specific practices previously identified in the Endorsement Guides.  Below we’ve summarized the requirements in the proposed rule.  The NPRM will be open for public comment for 60 days once it is posted in the federal register.  As of today, it has not yet been posted.Continue Reading FTC Proposes New Rulemaking Focused on Reviews and Testimonials

On May 18, 2023, the Federal Trade Commission (“FTC”) announced a notice of proposed rulemaking (the “proposed rule”) to “strengthen and modernize” the Health Breach Notification Rule (“HBNR”).  The proposed rule builds on the FTC’s September 2021 “Statement of the Commission on Breaches by Health Apps and Other Connected Devices” (“Policy Statement”), which took a broad approach to when health apps and connected devices are covered by the HBNR and when there is a “breach” for purposes of the HBNR.  The proposed rule primarily would (i) amend many definitions that are central to the scope of the HBNR (e.g., “breach of security,” “health care provider,” and “personal health record”), and (ii) authorize expanded means for providing notice to consumers of a breach and require additional notice content.  According to the FTC, these changes to the HBNR would ensure the HBNR “remains relevant in the face of changing business practices and technological developments.”  Below, we provide a brief summary of the history of the HBNR leading up to this proposed rule, a brief summary of the proposed rule, and a timeline for commenting.Continue Reading FTC Announces a Notice of Proposed Rulemaking to Expand Scope of the Health Breach Notification Rule