FTC to Host Public Workshop on Proposed Changes to Its Ophthalmic Practice Rules, also Known as the Eyeglass Rule, in May in Washington, DC

The Federal Trade Commission will host a public workshop on May 18, 2023, in Washington, DC, to examine proposed changes to its Ophthalmic Practice Rules, also known as the Eyeglass Rule. The workshop, A Clear Look at the Eyeglass Rule, is free and open to the public, and pre-registration is not required.

In December 2022, the FTC announced a proposal to update the Eyeglass Rule, which is designed to facilitate consumer choice and promote competition in the eyeglass market by requiring ophthalmologists and optometrists to provide patients with a copy of their prescription immediately after the completion of an eye exam. Under the rule, prescribers cannot require that patients buy eyeglasses, pay an additional fee, or sign a waiver or release as a condition of providing them with a copy of their prescription.

The proposed rule changes would require prescribers to get a signed statement from the patient confirming that they have received their prescription, and keep a record of that confirmation for at least three years. The amendments would also allow prescribers, with a patient’s verifiable affirmative consent, to provide the patient with a digital copy of a prescription in lieu of a paper copy; clarify that a patient’s proof of insurance coverage will be deemed to be a payment for the purpose of determining when a prescription must be provided; and change the term “eye examination” to “refractive eye examination” throughout the rule.

According to the Federal Register notice announcing the workshop, the half-day event may address the proposed confirmation of prescription release requirement for eyeglass prescriptions, consumers’ and prescribers’ experiences with the implementation of a similar requirement for contact lens prescriptions, other proposed changes to the rule, and issues raised in public comments submitted in response to January’s notice of proposed rulemaking. A more detailed agenda will be published in the coming weeks.

The workshop will be held at the Constitution Center in Washington, DC, from 9:00 am to 1:00 pm ET, in the first-floor conference room. It also will be available for viewing live on the internet. The Commission is accepting requests to participate as a panelist from interested parties through April 7, 2023, via email at eyeglassworkshop2023@ftc.gov. Written comments related to agenda topics or issues discussed at the workshop must be received by June 20, 2023. Information about how to submit requests to participate or comments can be found in the notice announced today.

The Commission vote approving publication of the Federal Register notice was 3-0-1, with Commissioner Christine S. Wilson not participating. It will be published in the register shortly. The lead staffers on this matter are Sarah Botha and Alysa S. Bernstein in the FTC’s Bureau of Consumer Protection.

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FTC Sues Medical Clinic and its Owner for False or Unsubstantiated Claims its Treatment Could Cure Addiction and Other Diseases

The Federal Trade Commission took action under the Opioid Addiction Recovery Fraud Prevention Act (OARFPA), suing Dr. Dalal A. Akoury and a set of companies she controls that operate as AWAREmed Health & Wellness Resource Center, a medical clinic, for making a wide range of false or unsupported claims for addiction treatment services, cancer treatment services, and the treatment of other serious conditions. The Department of Justice filed the case on the FTC’s behalf.

AwareMed Ad

The proposed order settling the Commission’s complaint bars Dr. Akoury and her AWAREmed clinic from making such unsupported claims and requires her to pay a $100,000 civil penalty.

“The opioid crisis claims lives and destroys communities all across the United States but especially in rural areas,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Doctors peddling phony promises should know that the FTC will use its strengthened authority from Congress to stop them from exploiting Americans struggling with addiction.”

Dr. Akoury’s AWAREmed clinic is based in Johnson City, Tennessee, and previously was located in Myrtle Beach, South Carolina. Since at least 2018, the complaint states, the AWAREmed defendants have advertised a range of treatments for patients suffering from addiction including substance use disorders from opioids to alcohol. Other deceptive treatment advertisements for cancer and chronic diseases like Parkinson’s disease and Alzheimer’s disease.

In their ads, the defendants described their clinic as the “Most Effective Medical Clinic Anywhere,” and claimed that it “Boasts a 98% Improvement Rate…Treating Just About…Anything,” including addictions to methadone and other drugs, alcohol, food, and gambling. Despite being warned by the FTC that making unsupported addiction treatment claims is unlawful, the defendants continued to claim without evidence that their treatment was “rapid, painless, effective, and safe,” and had better results in less time than 30-day treatment programs.

The defendants also used their website to promote their cancer treatments, claiming that patients would experience “exceptional results,” and that virtually all patients at any disease stage would improve moderately to significantly after treatment at the AWAREmed clinic. In similar ads, the defendants repeated their claims of near-universal success for chronic diseases such as Alzheimer’s and Parkinson’s.

Finally, the FTC alleges that in 2017 and 2018, Dr. Akoury appeared in nearly 100 brief TV segments hosted by reporters with Fox News’s Myrtle Beach affiliate, promoting AWAREmed in what appeared to be news interviews. It was never disclosed, however, that some of those appearances were actually paid ads placed by Dr. Akoury.

In addition to barring the defendants from violating the FTC Act and OARFPA, the proposed court order prohibits them from making the deceptive health claims alleged in the complaint, requires them to have competent and reliable scientific evidence for any health-related claims they make in advertising and marketing, and prohibits them from formatting ads in a way that may be interpreted as news or informational programing. It also requires them to pay a $100,000 civil penalty.

The Commission vote authorizing the staff to file the complaint and proposed order was 4-0. The DOJ filed the complaint and order on behalf of the FTC in the U.S. District Court for the Eastern District of Tennessee.

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FTC Issues Orders to Social Media and Video Streaming Platforms Regarding Efforts to Address Surge in Advertising for Fraudulent Products and Scams

With fraud on social media surging, the Federal Trade Commission has issued orders to eight social media and video streaming platforms seeking information on how these companies scrutinize and restrict paid commercial advertising that is deceptive or exposes consumers to fraudulent health-care products, financial scams, counterfeit and fake goods, or other fraud.

The amount of money consumers have reported losing to fraud that originated on social media platforms has skyrocketed since 2017. In 2022 alone, consumers reported losing more than $1.2 billion to fraud that started on social media, more than any other contact method, according to FTC data.

The Commission also is seeking information about how the social media and video streaming companies ensure that consumers are able to identify commercial advertising on their platforms as advertising.

The orders, which the companies are required to comply with by law, were sent to: Meta Platforms, Inc.; Instagram, LLC; YouTube, LLC; TikTok, Inc.; Snap, Inc.; Twitter, Inc.; Pinterest, Inc.; and Twitch Interactive, Inc.

“Social media has been a gold mine for scammers who tout sham products and other scams that have cost consumers enormously in recent years,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This study will help the FTC ensure that social media and video streaming companies are doing everything they can to keep scammers and deceptive ads off their platforms.”

The orders will collect information about the companies’ standards and policies related to paid commercial ads and their processes for screening and monitoring for compliance with those standards and policies, including through human review and the use of automated systems. The orders also require the companies to report their ad revenue, the number of ad views, and other performance metrics, including for ads involving categories of products and services more prone to deception such as those intended to treat, prevent, or cure substance use disorders and tout income opportunities.

These orders will help the Commission better understand how prevalent deceptive advertising is on social media and video streaming platforms, the consumers who may be harmed by that advertising, and the effectiveness of the platforms’ oversight of advertisers, including whether the companies treat English-language and Spanish-language ads differently. The study also should shed light on how the platforms create ads, including any use of generative artificial intelligence, and track, and classify ads, as well as the ad formats offered to advertisers, including shoppable ads, which allow consumers to purchase products or services directly through the ad, and virtual reality and other extended reality ads.

In addition, the Commission seeks information on how these platforms help consumers distinguish advertising and other commercial messages from other types of content, including disclosure tools for endorsers and influencers.

The orders seek information for the calendar years 2019 through 2023, which allows for the Commission to study relevant business conduct since the start of the COVID-19 pandemic. The orders were sent using the FTC’s 6(b) authority, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose. 

The Commission voted 4-0 during an open meeting to issue the 6(b) orders to the eight social media and video service services. 

The staff attorneys on this matter are Laura Sullivan and Rafael Reyneri from the FTC’s Bureau of Consumer Protection.

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FTC Launches Inquiry into Small Business Credit Reports

The Federal Trade Commission has launched an inquiry into the small business credit reporting industry, ordering five firms in that industry to provide the Commission with detailed information about their products and processes. The orders will be issued to Dun & Bradstreet, Experian Information Solutions, Equifax, Ansonia Credit Data, and Creditsafe USA.

“Like consumers, small businesses rely on fair and accurate credit reports in order to access key services. But because it isn’t covered by the same laws that apply to consumer services, credit reporting for businesses is tremendously opaque,” said FTC Chair Lina M. Khan. “This FTC inquiry will shine a much-needed light on the credit reporting industry and the related challenges that small businesses face.”

Unlike credit reports for individual consumers, which are governed by the Fair Credit Reporting Act, there is no federal law that specifically outlines processes and protections available to small businesses when it comes to credit reporting. This can make business credit reporting hard to understand, and it can be particularly difficult for small businesses to navigate how to correct errors or omissions in their credit reports in a timely fashion.

These reports can significantly affect small businesses, potentially impacting the terms on which they can obtain the goods, services, and equipment they need to stay in business. Because many of these credit reporting companies start developing a company’s credit report at the time it incorporates, tapping public records and other available financial data, business owners may not even be aware a report about them exists. Sometimes small businesses only discover they have a credit report when they are denied credit by a supplier.

The Commission’s inquiry will examine multiple aspects of how information is collected and processed for business credit reports, how the reports are marketed, and how and whether the credit reporting companies address factual errors in the reports. In addition to information about these topics, the orders also require the companies to provide information on services they provide to businesses to monitor or enhance their own credit reports.

Last April, the FTC secured an order with Dun & Bradstreet in which the company was required to make changes to its processes to help ensure that it responds promptly and fully to businesses’ complaints about incorrect information in their business credit reports, and to be upfront around the limitations of the company’s business credit reporting products. The company was also required to provide refunds to affected customers, and to make it easier for customers to cancel certain business credit report monitoring and managing products.

The FTC is issuing the orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct studies without a specific law enforcement purpose. The companies will have 60 days from the date they receive the order to respond.

The Commission vote to issue the orders was 4-0.

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FTC Approves Final Order against LCA-Vision, Halting Alleged Bait-and-Switch Advertising for LASIK Laser Eye Surgery

Following a public comment period, the Federal Trade Commission has finalized a final consent order against Ohio-based LCA-Vision, doing business as LasikPlus and Joffe MediCenter, related to allegedly deceptive ads for LASIK laser eye surgery.

According to the FTC’s January 2023 complaint, LCA’s ads allegedly tricked consumers into believing they could have their vision corrected for less than $300. In reality only 6.5 percent of consumers lured in for consultations were eligible for the advertised promotional price for both eyes. In some ads, LCA also neglected to tell consumers up-front that the promotional price was per-eye only. Despite the ad’s claims, LCA typically quoted patients a price between $1,800 and $2,295 per eye for anyone  with worse than near-normal vision (20/40 eyesight, good enough to drive without glasses).

The final order approved by the Commission settles the complaint and requires the defendants to pay $1.25 million for using the deceptive bait-and-switch advertising. It also bars LCA from the deceptive conduct alleged in the complaint and requires them to make certain clear and conspicuous disclosures when advertising LASIK at a price or discount for which most consumers would not qualify.

The Commission vote approving the final consent order was 3-1, with Commissioner Christine S. Wilson dissenting. The staff attorneys on this matter are Paul Spelman and Rafael Reyneri of the FTC’s Bureau of Consumer Protection.

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FTC Issues Report to Congress on American Indian and Alaska Native Consumer Issues

The Federal Trade Commission sent a new report to Congress detailing the consumer issues that affect American Indian and Alaska Native (AI/AN) populations, as well as the FTC’s enforcement, outreach and education work on these issues.

The report summarizes the agency’s efforts to hear directly from tribal leaders, community members, advocates, and others about issues affecting their communities, and provides analysis of the FTC’s data from the Consumer Sentinel Network database.

The report reflects the FTC’s conversations with community members and advocates about issues such as: auto purchasing and financing, predatory lending, impersonation scams, tech support scams and romance scams, among others. The FTC’s own consumer report data shows that government impersonation and prize, sweepstakes, and lottery scams were the most frequent scams reported to the FTC from majority AI/AN ZIP codes. Government and business impersonation scams are the focus of an ongoing Commission rulemaking effort.

The report also summarizes FTC law enforcement actions relating to the consumer abuses identified as impacting AI/AN communities. These include the recent case against Tate’s Auto, a group of dealerships located near the border of the Navajo Nation that the FTC charged targeted consumers with deceptive ads and unfair financing practices.

In the report, the Commission details extensive outreach to AI/AN communities and efforts to build partnerships and work with community media, as well as the launch of a new website at ftc.gov/NativeAmerican. The site aggregates consumer protection information and links on the issues identified in the report.

The report recommends continuing to expand partnerships with AI/AN organizations, tribal leaders, advocates, and other groups to inform the Commission’s law enforcement, education and outreach, and research efforts moving forward.

The Commission vote to issue the report to Congress was 4-0.

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FTC Finalizes Order Requiring Fortnite maker Epic Games to Pay $245 Million for Tricking Users into Making Unwanted Charges

The Federal Trade Commission has finalized an order requiring Epic Games, the maker of the Fortnite video game, to pay $245 million to consumers to settle charges that the company used dark patterns to trick players into making unwanted purchases and let children rack up unauthorized charges without any parental involvement.

In a complaint announced in December as part of a settlement package with Epic, the FTC said that Epic deployed a variety of design tricks known as dark patterns aimed at getting consumers of all ages to make unintended in-game purchases. Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button. The company also made it easy for children to make purchases while playing Fortnite without requiring any parental consent. According to the FTC’s complaint, Epic also locked the accounts of customers who disputed unauthorized charges with their credit card companies.

Under the FTC’s order, Epic must pay $245 million, which will be used to provide refunds to consumers. The order also prohibits Epic from charging consumers through the use of dark patterns or from otherwise charging consumers without obtaining their affirmative consent. Additionally, the order bars Epic from blocking consumers from accessing their accounts for disputing unauthorized charges.

After receiving five comments, the Commission voted 4-0 to approve the complaint and order against Epic and the responses to the commenters.

As part of a separate settlement, also announced in December, Epic agreed to pay a $275 million penalty to settle FTC allegations that the company violated the Children’s Online Privacy Protection Act Rule.

Consumers who believe they may have been injured by Epic’s practices can visit FTC.gov/Fortnite for more information on the refund process. 

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FTC Submits Annual Budget Request to Congress

The Federal Trade Commission submitted to Congress its Fiscal Year 2024 budget request, in support of the President’s FY 2024 budget for the federal government. The budget request also includes the Performance Plan for FY 2023 and FY 2024 and Performance Report for FY 2022, as required under the GPRA Modernization Act of 2010.

The Commission vote to submit the budget request to Congress was 3-0-1, with Commissioner Christine S. Wilson not participating. That staffer on the reports was James Hale in the FTC’s Financial Management Office.

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FTC Seeks Public Comment on Franchisors Exerting Control Over Franchisees and Workers

The Federal Trade Commission requests comment on franchise agreements and franchisor business practices, including how franchisors may exert control over franchisees and their workers.

In a franchise relationship, franchisees typically pay a fee in exchange for a business format or system developed by a franchisor, the right to use the franchisor’s trademark for a specific number of years, and assistance. Owning a franchise, however, comes with defined costs, franchisor controls, and contract terms.

The FTC would like to know more about how franchisors may exert control over franchisees and their workers. Specifically, the FTC is interested in how franchisors disclose certain aspects and contractual terms of the franchise relationship, as well as the scope, application, and effect of those aspects and contractual terms. 

“Amidst growing concern around unfair and deceptive practices in the franchise industry, the FTC hopes to hear from a broad range of stakeholders about how the franchise relationship is working, and how it is not,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This cross-agency effort will inform our policy and enforcement efforts as we work to ensure a fair marketplace for franchisees.”  

“It’s clear that, at least in some instances, the promise of franchise agreements as engines of economic mobility and gainful employment is not being fully realized,” said Elizabeth Wilkins, Director of the FTC’s Office of Policy Planning. “This RFI will begin to unravel how the unequal bargaining power inherent in these contracts is impacting franchisees, workers, and consumers.”

As part of the Request for Information, the FTC is asking franchisors, franchisees, current and past employees of franchisors and franchisees, government entities, economists, attorneys, academics, consumers, and other interested parties to weigh in on a wide array of issues that affect franchisees and their workers, such as:

  • franchisees’ ability to negotiate the terms of franchise agreements before signing, and the ability of franchisors to unilaterally make changes to the franchise system after franchisees join;
  • franchisors’ enforcement of non-disparagement, goodwill or similar clauses;
  • the prevalence and justification for certain contract terms in franchise agreements;
  • franchisors’ control over the wages and working conditions in franchised entities, other than through the terms of franchise agreements;
  • payments or other consideration franchisors receive from third parties (e.g., suppliers, vendors) related to franchisees’ purchases of goods or services from those third parties;
  • indirect effects on franchisee labor costs related to franchisor business practices; and
  • the pervasiveness and rationale for franchisors marketing their franchises using languages other than English.

The public will have 60 days to submit comments at Regulations.gov. Once submitted, comments will be posted to Regulations.gov.

Apart from this Request for Information, the FTC is seeking public comment on a proposed rule to ban noncompete clauses for workers in some situations. As part of that proposed rulemaking, the FTC is interested in public comments on the question of whether that proposed rule should also apply to noncompete clauses between franchisors and franchisees. Comments related to the use of noncompete restrictions in franchise agreements should be submitted as part of the noncompete rulemaking through April 19, 2023. This Request for Information is separate from the noncompete rulemaking proceeding. Similarly, this Request for Information is separate from the Franchise Rule regulatory review. Any comments submitted in response to this Request for Information will not automatically become part of either the noncompete rulemaking proceeding or the Franchise Rule regulatory review record. 

The lead staff attorneys on this matter are Christine M. Todaro and Josh Doan from the FTC’s Bureau of Consumer Protection and Alex Petros from the FTC’s Office of Policy Planning.

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FTC Announces Tentative Agenda for March 16 Open Commission Meeting

Today, Federal Trade Commission Chair Lina M. Khan announced that an open meeting of the Commission will be held virtually on Thursday, March 16, 2023. The open meeting will commence at 11am ET and will begin with time for members of the public to address the Commission.

The following items will be on the tentative agenda for the March 16 Commission meeting:

Business Before the Commission

6(b) Orders Concerning Deceptive Advertising on Social Media: The Commission will vote on whether to issue 6(b) Orders to eight social media and video streaming platforms concerning how they monitor and review deceptive advertising on their platforms. Specifically, the Orders will examine the companies’ ad review practices and what, if any, measures they have taken to detect, prevent, and reduce deceptive advertising on their platforms, including advertising related to fraudulent health-care products, financial scams, and fake goods.

6(b) Orders Concerning Small Business Credit Reporting Agencies: The Commission will vote on whether to issue 6(b) Orders to five business credit reporting agencies concerning how they collect and report data about small businesses, and how they market their business credit reporting products. A business credit report can affect a small business in many ways, including potentially impacting the terms on which it can obtain goods, services, and equipment necessary for the operation of the business. This study will provide the public with information about an industry that has a significant impact on small businesses, but that currently has little publicly available data about it.

At the start of the meeting, Chair Khan will offer brief remarks and will then invite members of the public to share feedback on the Commission’s work generally and bring relevant matters to the Commission’s attention. Members of the public must sign up for an opportunity to address the Commission virtually at the March 16 event.

Each commenter will be given two minutes to share their comments. Those who cannot participate during the event may submit written comments or a link to a prerecorded video through a webform. Speaker registration and comment submission will be available through Tuesday, March 14, 2023 at 8 pm ET.

The FTC’s public meeting agendas will be posted on the Commission’s website at least seven days prior to the Commission’s next monthly meeting. A link to the event will be available on the day of the event, shortly before the meeting starts via FTC.gov. The event will be recorded, and the webcast and any related comments will be available on the Commission’s website after the meeting. The Commission retains discretion to make public comments available following the event on ftc.gov.

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