The Federal Trade Commission and state prosecutors on Thursday filed a joint lawsuit against Live Nation Entertainment and Ticketmaster accusing the event services of allowing brokers to scoop up event tickets and resell them at inflated prices, costing consumers billions of dollars.
In a legal complaint filed in the U.S. District Court for the Central District of California, the regulatory agency also alleged that Live Nation, which owns Ticketmaster, used “bait-and-switch pricing” tactics by advertising lower ticket prices than what was actually available to customers, and by selling millions of tickets to brokers— often at a significant markup — despite limits that artists had placed on such sales.
“The FTC alleges that in public, Ticketmaster maintains that its business model is at odds with brokers that routinely exceed ticket limits,” the agency said in a news release. “But in private, Ticketmaster acknowledged that its business model and bottom line benefit from brokers preventing ordinary Americans from purchasing tickets to the shows they want to see at the prices artists set.”
The agency said Live Nation’s and Ticketmaster’s business practices violate the Better Online Ticket Sales Act and other laws barring deceptive sales tactics.
Joining the FTC suit were attorneys general in Colorado, Florida, Illinois, Nebraska, Tennessee, Utah and Virginia.
“It should not cost an arm and a leg to take the family to a baseball game or attend your favorite musician’s show,” FTC Chairman Andrew N. Ferguson said in a statement.
From 2019 to 2024, consumers spent nearly $83 billion buying tickets through Ticketmaster, the FTC said. The platform controls at least 80% of the tickets sold by major event venues, according to the agency.
Live Nation, based in Beverly Hills, Calif., and Ticketmaster didn’t immediately reply to a request for comment.
In May, the Department of Justice filed a federal lawsuit accusing the two companies of illegally monopolizing the live entertainment industry. The suit alleged that Live Nation has violated antitrust laws in ways that hurt consumers, in part through its ownership of Ticketmaster.
The Federal Trade Commission is investigating whether Amazon and Google misled advertisers regarding the pricing and terms for their ads. As first reported by , the investigation is being conducted by the agency’s consumer protection unit, and centers around the auction-style sale of advertising space by the companies.
Google sells ads using automated auctions that run after a user enters a search query. These auctions take place in less than a second. Amazon uses real-time auctions to place ads within its listings, which users would recognize as “sponsored listings” or “sponsored ads” when searching for specific products.
The investigation questions whether Amazon disclosed so-called “reserve pricing” for some of its ads, which is a price floor that advertisers must meet before they can buy an ad. For Google’s part, the FTC is looking at certain practices by the search giant including its internal pricing process and whether it was surreptitiously increasing the cost of ads in ways that advertisers weren’t privy to.
The FTC isn’t the only federal agency keeping a close eye on big tech. Earlier this year, a that Google held a monopoly in online ad tech after the Department of Justice (DOJ) sued to break up the giant’s ad business. Google also recently escaped from a Department of Justice monopoly case involving its Chrome browser.
FTC Chair Andrew Ferguson has previously said that big tech is one of the agency’s top priorities. These investigations move forward against a backdrop of top tech CEOs continuing to try to curry favor with President Trump via and sweeping (if potentially unrealistic) in the US economy.
The Federal Trade Commission is making a formal inquiry into companies that provide AI chatbots that can act as companions. The investigation isn’t tied to any kind of regulatory action as of yet, but does aim to reveal how companies “measure, test, and monitor potentially negative impacts of this technology on children and teens.”
Seven companies are being asked to participate in the FTC’s investigation: Google’s parent company Alphabet, Character Technologies (the creator of Character.AI), Meta, its subsidiary Instagram, OpenAI, Snap and X.AI. The FTC is asking companies to provide a variety of different information, including how they develop and approve AI characters and “monetize user engagement.” Data practices and how companies protect underage users are also areas the FTC hopes to learn more about, in part to see if chatbot makers “comply with the Children’s Online Privacy Protection Act Rule.”
The FTC doesn’t provide clear motivation for its investigation, but in a separate statement, FTC Commissioner Mark Meador suggests the Commission is responding to recent reports from The New York Timesand Wall Street Journalof “chatbots amplifying suicidal ideation” and engaging in “sexually-themed discussions with underage users.”
“If the facts — as developed through subsequent and appropriately targeted law enforcement inquiries, if warranted — indicate that the law has been violated, the Commission should not hesitate to act to protect the most vulnerable among us,” Meador writes.
As the long-term productivity benefits of using AI become less and less certain, the more immediate negative privacy and health impacts have become red meat for regulators. Texas’ Attorney General has already launched a separate investigation into Character. AI and Meta AI Studio over similar concerns of data privacy and chatbots claiming to be mental health professionals.
Rebecca Kelly Slaughter returned to the Federal Trade Commission on Wednesday after a court ruling that reversed President Donald Trump‘s effort to oust her.
“Back at my desk, back online, and have already moved to reinstitute the Click to Cancel Rule,” Slaughter wrote on her official government account on X. “Hope a majority of the Commission will join me – all Americans deserve to be protected from abusive subscription traps.”
Slaughter’s profile also was restored on the FTC website.
Back at my desk, back online, and have already moved to reinstitute the Click to Cancel Rule. Hope a majority of the Commission will join me – all Americans deserve to be protected from abusive subscription traps. pic.twitter.com/apIMhwFxA4
On Tuesday, the D.C. Circuit Court of Appeals lifted a stay on a lower court decision that ordered Slaughter be reinstated. The Trump administration has been appealing that district court decision, which found that Trump’s removal of Slaughter without cause violated the congressionally intended independence of the agency. U.S. District Judge Loren Alikhan wrote, “The delicate balance between our three branches of government is sacrosanct; it lies at the heart of our democratic republic and cannot be cast aside in the name of one administration’s political whims.”
In March, Trump fired Slaughter and another Democratic commissioner, Alvaro Bedoya. They filed suit, calling their removals illegal, given that the FTC was set up as an independent agency. As the litigation went on, Bedoya announced that he was resigning, citing the financial constraints of having no other source of income while he remained.
The D.C. Circuit Court of Appeals, in a 2-1 ruling, concluded that the Trump administration has “no likelihood of success” in its appeal, given controlling Supreme Court precedent.
The commission’s chairman, Andrew Ferguson, who was appointed by Trump, sided with the president in his contention that he had the authority to remove Slaughter and Bedoya. “I have no doubts about his constitutional authority to remove commissioners, which is necessary to ensure democratic accountability for our government,” Ferguson said in a statement in March.
Slaughter’s reference to the “click to cancel” rule, which was to have taken effect in July. That would require businesses to make it easier to cancel subscriptions, including to streaming services. An appeals court, though, vacated the rule before it was to take effect, citing failure to follow procedural requirements.
The Federal Trade Commission that Disney will pay $10 million to settle allegations that the entertainment giant allowed data collection on YouTube videos meant for children. Under the Children’s Online Privacy Protection Rule, also known as , companies are required to notify parents and obtain parental consent if they collection information from minors. According to the FTC complaint, Disney failed to properly label some YouTube videos as “Made for Kids,” which allowed the company to collect data and deliver targeted ads to viewers younger than 13.
The proposed order from the FTC would also require Disney to create a review process for determining when and how videos are correctly designated with YouTube’s Made for Kids label. YouTube rolled out the Made for Kids tags following a settlement in 2019 on charges that the video platform had violated COPPA. Google faced an additional settlement of last month from a similar class-action lawsuit.
Andrew Ferguson, the Trump-appointed chair of the Federal Trade Commission, recently expressed concern that “Alphabet’s administration of Gmail is designed to have partisan effects.”
“My understanding from recent reporting is that Gmail’s spam filters routinely block messages from reaching consumers when those messages come from Republican senders but fail to block similar messages sent by Democrats,” Ferguson wrote.
He warned Alphabet that if Gmail’s filters “keep Americans from receiving speech they expect, or donating as they see fit, the filters may harm American consumers and may violate the FTC Act’s prohibition of unfair or deceptive trade practices,” adding this could lead to “an FTC investigation and potential enforcement action.”
In response, a Google spokesperson told Axios that Gmail’s spam filters “look at a variety of objective signals – like whether people mark a particular email as spam, or if a particular ad agency is sending a high volume of emails that are often marked by people as spam,” and they said the company applies this approach “equally to all senders, regardless of political ideology.”
The spokesperson also said, “We will review this letter and look forward to engaging constructively.”
Don’t get Nathan Jones started on xylitol, the active ingredient in his chewing gum, nasal spray and other products. He’ll talk your ear off about its wondrous powers against tooth decay, as well as its potential to fight covid, heart disease, Alzheimer’s — you name it.
For now, Jones, the founder of Xlear, can’t make those claims in his company’s advertising. But if the lawsuit his company brought against the Federal Trade Commission succeeds, he’ll likely be able to say anything he wants.
As the Trump administration loosens enforcement by the Federal Trade Commission, Department of Justice, and FDA of unproven health claims, Jones and his allies in the “medical freedom” movement are pushing to permanently roll back the health regulatory state.
For decades, the FTC has required companies to back any medical claims about their products with substantial evidence, while taking actions against hundreds of “bogus health cures,” said Jessica Rich, the FTC’s director of consumer protection from 2013 to 2017.
If successful, the lawsuit by Jones’ company “would be a complete game changer,” said Mary Engle, associate director of the FTC’s advertising practices division from 2001 to 2020.
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The FTC — and FDA — don’t have sufficient staffing to rigorously police health claims, but Health and Human Services Secretary Robert F. Kennedy Jr.’s allies in the alternative medicine world have suggested that the agencies already go too far.
“The pharmaceutical industry has a stranglehold and monopoly in America,” Jones told KFF Health News. “The consumer should have a choice in what they’re doing and how they’re being proactive and reactive in their health care.”
Jones and other members of the Alliance for Natural Health USA, which includes alternative medicine practitioners, vaccine skeptics and proponents of “natural” remedies, were elated when Kennedy became Health and Human Services secretary in February. One called it a “once-in-a-lifetime opportunity.”
Kennedy had warned shortly before Trump’s reelection that the FDA would face a reckoning for its “aggressive suppression” of vitamins, peptides, nutraceuticals and other products from a supplement industry that has sought more freedom to make claims about its products.
Losing regulatory bite?
For decades, the FDA has had the power to recall dangerous products and check health claims, although it has nowhere near the workforce it would need to police the vast $70 billion supplement industry.
The FTC has traditionally had more teeth, successfully suing companies that make unsubstantiated claims. For example, the agency won a judgment last year against a company that advertised a supplement as “clinically shown” to improve memory.
The FTC under Trump has not announced any new enforcement actions against supplement makers (it did send consumers the proceeds of previousfraud settlements), and the administration has reversed several covid-related FTC actions. In March, the FTC dropped a lawsuit filed in 2021 against Jones and Xlear over the marketing of its “drug-free” sinus rinse as a covid preventive and treatment. The Department of Justice also closed a case brought on behalf of the FTC and the FDA against a company that claimed its Earth Tea could cure covid.
In June, Jones, who says he spent $3 million fighting the FTC suit before it was dropped, sued back. The company asked a judge to forbid the FTC from requiring that health product marketers back their claims with convincing evidence, such as clinical trials — a position the FTC has maintained since 1984.
Xlear hopes the suit will be considered under last year’s Supreme Court ruling known as Loper Bright, said Xlear attorney Rob Housman. That ruling gave courts more power to second-guess federal agencies’ interpretation of the laws that govern their activities.
The Alliance for Natural Health joined Xlear in a separate petition in May demanding that the FTC drop its requirement for companies to provide substantial evidence backing health claims, and to withdraw 2022 guidelines that generally require companies to run a randomized clinical trial to prove their claims.
The petition was filed by Jonathan Emord, a lawyer who has successfully fought FDA and FTC regulation of supplements and unsuccessfully ran for governor of Virginia as a Republican in the 2024 primary.
Emord’s petition seeks to flip the burden of proof. Instead of requiring the makers of supplements and cosmetic creams, pills, sprays and herbals to prove their products do what they claim to do, the government would have to prove that they don’t.
“If an advertiser throws caution to the wind and makes a health-related product claim without resort to any supporting evidence, the FTC is powerless” to stop it, Emord wrote in the petition. “Rather, the claim will be tested in the idea and information market free of government constraint.”
Emord and the Alliance for Natural Health did not respond to repeated requests for comment.
The FTC would not comment on the lawsuit, the petition, or the issue of substantiation in general, spokesperson Juliana Gruenwald Henderson said.
Shorthanded and mostly hands-off
Meanwhile, with Kennedy’s administration chockablock with proponents of nontraditional health products, “there’s been a downtick of enforcement,” Housman said.
Since Trump took office, the FTC has lost at least a quarter of the staff in its Division of Advertising Practices, which took the original action against Xlear, said Serena Viswanathan, who retired as FTC associate director in June. The Department of Justice has reorganized its consumer protection unit, which backed the FTC in many actions, and moved some of its lawyers to immigration and other areas.
In one of the only actions it has taken against deceptive health practices under Trump, the FTC hosted a July 9 workshop titled “The Dangers of ‘Gender-Affirming Care’ for Minors.”
In FTC Chairman Andrew Ferguson’s opening statement at that event, he excoriated the Biden administration for allowing hormonal and surgical treatments for youth experiencing gender dysphoria.
But Ferguson justified the FTC’s new attack on these treatments by referring to the agency’s traditional practice of pursuing companies for making false and deceptive claims. Noting the agency’s past actions against “shyster snake oil salesmen” promoting fake cures, Ferguson highlighted the Biden-era FTC’s position that “health claims need to be backed up by reliable scientific evidence” and an “incredibly high standard of scientific ‘substantiation.’”
Under that logic, Ferguson “has to defend against the Xlear lawsuit,” Rich said.
“If anyone can just hawk health products without any basis, and customers spend money on bogus cures instead of seeking proper care, it’s really a serious issue,” she said.
‘Nanny state’ or not?
Ferguson’s remarks reflect one of many contradictions in the administration’s approach to health policy. While favoring deregulation and greater personal liberty to consume unregulated supplements, Kennedy has also pushed for stricter FDA oversight of food and drugs, while advocating for behavioral change that GOP officials derided as “nanny state” tactics when Democrats like former first lady Michelle Obama promoted doing so.
Kennedy, for example, has said he wants more randomized control trials for vaccines and drugs — a requirement rejected by medical freedom advocates like Jones.
“I like clinical data; I think it’s great,” Housman said. “It’s not the be-all and end-all.”
Kennedy has also announced plans to change a policy that allows food companies to add ingredients without a full safety review. But many supplement makers use the policy to get their products on the market without FDA review, and some are unhappy about the potential clampdown.
Banking on xylitol
The FDA approved xylitol as a food additive in 1963 and regulates it as a cosmetic ingredient. Jones, who said his company has about 110 employees and sells to 70,000 retailers, founded Xlear 25 years ago.
Jones expresses skepticism of vaccines, believes the drug industry has a monopolistic stranglehold on health care, and is a “true believer” in xylitol, Housman said.
In an interview with KFF Health News, Jones said that the slightly sweet, minty-flavored substance reduces gum inflammation by blocking the adhesion of tooth-rotting Streptococcus mutans bacteria to cells in the mouth.
In Finland, where water is not fluoridated, dentists have long recommended xylitol-imbued chewing gum for children. In addition to fighting cavities and lowering periodontal disease, Jones said, xylitol could fight chronic illnesses like obesity, Alzheimer’s and heart disease, which “all have a correlation with oral hygiene.”
But “the government bans us from going out and talking about what xylitol does,” he said. “We cannot say xylitol can help prevent tooth decay, because xylitol is not a drug, and that’s a drug claim.”
As for its use against covid, three ear, nose and throat specialists interviewed by KFF Health News said that xylitol is good for moisturizing nasal cavities, perhaps a bit better than simple saline solution. While there’s no evidence it prevents or cures covid, xylitol, like saline nose washes, may reduce symptoms when used toward the start of any viral upper respiratory infection, said Christine Franzese, a professor of otolaryngology at the University of Missouri Medical Center and the chair of the American Academy of Otolaryngology-Head and Neck Surgery’s allergy, asthma, and immunology committee.
Xylitol is poisonous to dogs, but deemed safe to humans when used at recommended doses in sprays, candies, chewing gum, and other products, according to the American Academy of Pediatric Dentistry, which also states that evidence is mixed on whether xylitol fights cavities effectively.
At higher doses, xylitol can cause diarrhea and other gastrointestinal problems, and a study funded by the National Institutes of Health and published last year found that regular use of xylitol as a sweetener could exacerbate heart disease. The quantities of xylitol consumed daily by participants in that study were far higher than what’s in a few sticks of chewing gum, however.
Whether his lawsuit succeeds or not, Jones can probably expect a rosy business future.
On May 21, he and pediatric dentist Mark Cannon of Northwestern University were called to testify in the Utah Legislature in support of a pilot project to provide Xlear’s gum to students and prisoners in the state as a replacement for fluoridated water, which the state banned in March.
Florida ordered fluoride removed from the state’s water starting July 1, and other states are considering bans. Kennedy wants to end fluoridation nationwide, despite widespread skepticism of his belief that it poisons the brain at common dosing levels.
The bans are a boon to Xlear, Jones said. The company would provide gum for the Utah pilot at cost, he said, but if governments promote it and people learn more, “that’s where we see us being able to grow.”
This article first appeared on KFF Health News, a national newsroom that produces in-depth journalism about health issues.
The Federal Trade Commission on Wednesday sued the operators of the popular gym franchise L.A. Fitness and other gyms for allegedly subjecting members to what it called “exceedingly difficult” cancellation policies.
Filed in California federal court, the lawsuit accused Fitness International and Fitness & Sports Clubs of intentionally using complicated cancellation procedures to prevent their customers from ending their gym memberships and other recurring charges. The California-based companies “have illegally charged hundreds of millions of dollars in unwanted recurring fees” as a result, the FTC said in its complaint.
Fitness International and Fitness & Sports Clubs run gym chains including L.A. Fitness, Esporta Fitness, City Sports Club and City Studio, according to the FTC, which said they collectively operate more than 600 gym locations and have upwards of 3.7 million members nationwide.
“The FTC’s complaint describes a scenario that too many Americans have experienced – a gym membership that seems impossible to cancel,” said Christopher Mufarrige, the director of the Consumer Protection Bureau, in a statement released by the trade commission. “Tens of thousands of LA Fitness customers reported difficulties – cancellation was often restricted to specific times or required speaking to specific managers who were often not present or available.”
Both companies offer gym memberships for fees as low as $30 per month and as high as $299 per month, and require customers to pay for the first and last month of their memberships upfront before incurring monthly dues and annual fees, the FTC said. In its complaint, the commission detailed “restrictive” and confusing cancellation requirements, with an in-person process that’s difficult to access being one method, and a mail-in process being another.
“Each of these cancellation methods is opaque, complicated, and demanding—far from simple,” the complaint said. “In particular, Defendants have not adequately disclosed how to cancel when consumers are signing up for their memberships and have presented different, often contradictory, cancellation requirements during sign up, in membership agreements, and on the Defendants’ websites.”
Fitness International addressed the lawsuit in a statement, saying “the allegations are without merit” and its leadership was “disappointed that the FTC has chosen to pursue this complaint.”
“It is important to note that most of our memberships, and all of our personal training memberships, are purchased in person at our club locations,” said Jill Hill, the president of club operations at Fitness International, in the statement. Hill said the company also complied with the FTC’s now-void “click-to-cancel” rule that aimed to make it easier for consumers to cancel recurring subscriptions and memberships.
Although the rule did not take effect, Hill said Fitness International has maintained an online program for members to cancel their subscriptions, in addition to the in-person and mail-in options.
“Our company works diligently to comply with all health club state laws regarding membership cancellations and to offer at a minimum every cancellation method specifically required by each state,” Hill said. “Over the years, the company has taken many steps to improve its enrollment and cancellation processes.”
Emily Mae Czachor is a reporter and news editor at CBSNews.com. She typically covers breaking news, extreme weather and issues involving social justice. Emily Mae previously wrote for outlets like the Los Angeles Times, BuzzFeed and Newsweek.
A Maryland ticket broker is accused of illegally purchasing and reselling hundreds of thousands of tickets for profit, including thousands to Taylor Swift’s highly sought Eras Tour.
The Federal Trade Commission is suing Key Investment Group, saying the company made millions of dollars in profit from reselling the tickets at inflated prices.
The lawsuit, filed Monday, Aug. 18, in U.S. District Court in Maryland, accuses the company and its affiliates of bypassing Ticketmaster’s security measures designed to block resellers from violating ticket-purchase limits.
Key Investment Group also did business under the names Epic Seats, TotalTickets.com LLC and Totally Tix LLC, according to the complaint.
The FTC alleges that, in a one year period, the group purchased at least 379,776 tickets from Ticketmaster at a cost of nearly $57 million. The company then allegedly resold those tickets on secondary marketplaces for about $64 million.
In a statement, Key Investment Group said it will “vigorously defend itself against this clear example of regulatory overreach.” It claims the FTC “misleadingly characterizes KIG’s use of standard internet browsers,” and said the government’s case “threatens to dismantle the secondary ticket market for live events.”
Taylor Swift’s Eras Tour tickets
Between March and August of 2023, Key Investment Group allegedly purchased 10 or more tickets to 38 Taylor Swift concerts, totaling 2,280 tickets, according to the complaint. The FTC says the company made more than $1.2 million in profit reselling those tickets.
For just one Taylor Swift show, the defendants allegedly used 49 different accounts to buy 273 tickets. The Eras Tour had a six-ticket purchase limit per customer, per event.
Among other events the FTC alleges were targeted was a 2023 Bruce Springsteen concert in New Jersey. Despite a four-ticket limit, the defendants allegedly purchased and resold more than 1,500 tickets.
How the alleged scheme worked
According to the FTC, the group used thousands of Ticketmaster accounts, both fictitious and third-party accounts it had purchased, to bypass security measures and purchase the tickets.
The company is also accused of using thousands of credit card numbers, including virtual card numbers, spoofing IP addresses to hide the identity of the ticket purchaser, and using SIM technology to collect the incoming verification codes.
In doing so, the FTC said the brokers violated the FTC Act and the Better Online Ticket Sales Act, which prohibits people from “circumventing a security measure, access control system, or other technological control or measure on an internet website or online service that is used by the ticket issuer to enforce posted event ticket limits or to maintain the integrity of posted online ticket purchasing order rules.”
Christian Olaniran is a digital producer for CBS Baltimore, where he writes stories on diverse topics including politics, arts and culture. With a passion for storytelling and content creation, he produces engaging visual content for social media, and other platforms.
In a lawsuit filed in federal court in Maryland, the FTC said Maryland-based ticket broker Key Investment Group has used thousands of fictitious Ticketmaster accounts and other methods to buy tickets for events, including Taylor Swift’s Eras Tour.
The U.S. Federal Trade Commission filed a lawsuit Monday against a ticket broker, alleging the company used illegal tactics to exceed purchasing limits for popular events and then resold tickets at significantly higher prices.
In a lawsuit filed in federal court in Maryland, the FTC said Maryland-based ticket broker Key Investment Group has used thousands of fictitious Ticketmaster accounts and other methods to buy tickets for events, including Taylor Swift’s Eras Tour.
According to the FTC, Key Investment Group – which does business under brand names like Epic Seats and Totally Tix – purchased at least 379,776 tickets from Ticketmaster between Nov. 1, 2022, and Dec. 30, 2023. The company spent nearly $57 million to buy the tickets and resold them on secondary marketplaces for approximately $64 million.
For just one Taylor Swift concert, Key Investment Group allegedly used 49 different accounts to purchase 273 tickets, dramatically exceeding the Eras Tour’s 2023 six-ticket purchase limit per event, the FTC said. Fans were so frustrated by the difficulty getting tickets for Swift’s tour that the U.S. Senate wound up grilling Ticketmaster in a 2023 hearing.
In a statement released Monday, Key Investment Group said it will vigorously defend itself against the FTC’s lawsuit.
“The case threatens to dismantle the secondary ticket market for live events, further consolidating power in the hands of the industry’s largest monopoly,” the company said.
Key Investment Group said the FTC is misapplying the Better Online Ticket Sales Act, a 2016 law which it said was meant to target malicious software, not legitimate resale businesses. Key Investment Group sued the FTC in July to try to prevent the agency from using the law against it, saying it uses human employees — not bots — to buy tickets.
But the FTC said that law also prohibits anyone from circumventing security measures and other controls meant to enforce posted ticket limits.
In March, with Kid Rock by his side in the Oval Office, President Donald Trump signed an executive order directing U.S. officials to ensure ticket resellers are complying with Internal Revenue Service rules. The order also directed the FTC to ensure “price transparency at all stages of the ticket-purchase process” and to “take enforcement action to prevent unfair, deceptive, and anti-competitive conduct in the secondary ticketing market.”
At the Federal Trade Commission, Chair Lina Khan’s mission is breaking illegal monopolies, blocking mergers that stifle competition, and protecting consumers.
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First, a report on fentanyl killing over 70,000 a year in the U.S. Then, FTC Chair Lina
Khan: The 60 Minutes Interview. And, take a look inside the treasures of the National Archives.
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Everywhere you go people are complaining about inflation: voters say it’s their number one issue.
Enter trustbuster Lina Khan – the youngest chair ever of the Federal Trade Commission – just 32 when she was named. She says much of the blame for the exorbitant prices on everything from food to concert tickets, is widespread corporate consolidation.
The FTC’s mission is breaking illegal monopolies, blocking mergers that stifle competition, and protecting consumers from a system Lina Khan says is rigged against them. But she’s so aggressive that she’s feared and loathed in boardrooms – seen as a zealot and a bully, and yet —
At town hall meetings around the country, Lina Khan is often swarmed by young people taking selfies, small business owners giving her cards, union members – to whom she preaches the perils of business monopolies.
Lina Khan
60 Minutes
Lina Khan: Too often fewer and fewer companies are controlling more and more of the market. And what that means is companies can start ripping you off, hiking prices, stealing from you.
She calls these events her “listening tours,” that she does in both red and blue districts — this one hosted by Congresswoman Alexandria Ocasio-Cortez.
Crowd Member: Every time I go to the supermarket, I get sticker shock. Groceries are so expensive now. What can be done to help people like me who are worried about grocery prices? Thank you.
Lina Khan: The FTC is currently in court trying to block the largest grocery merger in U.S. history.
Between Kroger – that owns Ralph’s – and Albertsons, that owns Safeway. Together they have nearly 5,000 locations. Khan says this merger risks raising food prices even higher than they are now.
Lesley Stahl: Grocery prices have gone through the roof. I believe that you think it’s because of monopolies, but most economists say that it’s because of supply chains caused by Covid and the Ukraine war. So which is it?
Lina Khan: So there’s no doubt that the pandemic and the war led prices to soar. What’s been interesting is that even as some of those supply chain pressures have eased, prices have not come down concurrently as much.
Lesley Stahl: So instead of inflation, are you contending that it’s greedflation? That these monopolies are deliberately hiking the prices?
Lina Khan: So there’s a lot of discussion about what’s driving the inflation and we’ve actually seen some executives boast on earnings calls about how inflation is great for their bottom line.
Lesley Stahl: They say that?
Lina Khan: They have said that publicly, yes.
Lesley Stahl: What about the argument that when companies merge prices often come down, because of efficiencies, scale?
Lina Khan: But even if those efficiencies arise, if the company’s not checked by competition it won’t have an incentive to pass those benefits on to the consumer because those consumers may not have anywhere else to go.
FTC Chair Lina Khan
60 Minutes
Another consumer concern: the high cost of medicine.
Pharmacist: As far as negotiating prices—
Khan talks to independent pharmacists about the tricks and traps she says big pharma uses to jack up prices. For example, she zeroed in on the makers of asthma inhalers for extending their patents to keep low-cost generics off the shelves.
Lesley Stahl: On these inhalers, they cost $7 in France. The same exact inhaler is around $500 in the United States. Wow. Now, something’s out of whack.
Lina Khan: We agree. So we took a close look at this and we found that companies were listing patents for things like the inhaler cap or the strap on your inhaler, so nothing to do with the actual ingredients of the drug or the formulation or composition of the drug.
Lesley Stahl: So this is an inhaler for asthma. Show us what the innovation was that they claimed allowed them to extend the patent.
Lina Khan: So it’s this strap that they listed a patent for, this little piece of plastic.
Lesley Stahl: No! They were saying that they should be able to continue the patent; generics can’t come in for the medication, because they put that strap on–
Lina Khan: That’s right–
Lesley Stahl: –to make sure you didn’t lose the cap.
Lina Khan: That’s right.
After the FTC sent warning letters to the four major inhaler makers, three of them – including this one – dropped the price from hundreds of dollars to just 35. And two days ago, the FTC filed a lawsuit to bring down the price of insulin and scores of other drugs, suing three companies the agency says are responsible for manipulating most of the prices.
Lina Khan: These really fundamental things about people’s daily material lives are affected by things like antitrust.
But investment bankers, venture capitalists, and top CEOs say she’s biased against them – that Lina Khan picks on winners because they’re winners and thinks big is always bad.
FTC Chair Lina Khan
60 Minutes
Lesley Stahl:Actually, Khan’s doggedness represents a shift in policy, a mandate to reverse decades of a hands-off strategy toward mergers and acquisitions. It was introduced by Ronald Reagan and adopted by all presidents since, including Clinton and Obama, until President Biden put an end to it.
President Biden (in 2021):We are now 40 years into the experiment of letting giant corporations accumulate more and more power, and where– what have we gotten from it? Less growth, weakened investment, fewer small businesses.
Under President Biden the FTC and the Justice Department have unleashed a crackdown, suing scores of companies, including Ticketmaster, Nvidia, and the big five: Amazon, Meta, Microsoft, Apple, and a court just deemed Google an illegal monopoly. It’s a revolution, and the face of it is Lina Khan.
Male Student: We’re all law students and we love you.
Female Student: Can we have a selfie?
Lina Khan: Sure!
Male Student: Three, two, one. Thank you.
When Khan was a student here at Yale Law School, she wrote a paper called “Amazon’s Antitrust Paradox” contending that even though Amazon’s prices are low, it’s still a monopoly.
Lesley Stahl: This was seen as an extraordinary breakthrough. And it went viral.
Lesley Stahl: You know, Amazon is a very popular company. People like the convenience, the choice, the prices are pretty moderate. And they’re afraid that you’re gonna tamper with something that’s good, that they like.
Lina Khan: Our investigation uncovered that Amazon’s illegal practices were actually raising prices for consumers because it had illegally muscled out rivals, locked them out of the market in ways that if you had more competition that Amazon hadn’t squashed, consumers would be even better off.
Amazon denies doing anything illegal and says if Khan wins, prices will go up. Also in the FTC’s crosshairs: the issue of tech giants buying up smaller companies.
Lina Khan: In the technology markets we went through a couple of decades where we saw over 800 acquisitions by the five big players, not a single one of which was blocked. And some of those we realize ended up leading to significant harm. Just to give you a concrete example, there were companies that were offering Americans greater privacy and they were promising that we’re not gonna use your data, we’re not gonna sell it, we’re not gonna spy on you everywhere all the time. After some of those firms were bought up by one of the big guys, all of those data privacy policies changed overnight. And so Americans lost those privacy protections.
Lesley Stahl: You’re talking about Facebook and WhatsApp?
Lina Khan: Yes, that’s one example of that.
She’s now suing over Facebook’s acquisitions of Whatsapp and Instagram.
Lesley Stahl: Is the mandate to reverse what’s gone on for 40 years, to undo some of the mergers that were approved.
Lina Khan: We’ve identified not just one merger, but a whole string of mergers that some of these large companies made that we believe were illegal, that we believe were anti-competitive.
Lesley Stahl: But they were approved.
Lina Khan: They were not blocked, they were not challenged.
FTC Chair Lina Khan
60 Minutes
But the courts don’t always side with her. The FTC has lost a couple of big cases against Meta and Microsoft. Yet her cage-rattling has had a chillingeffect where companies simply drop their merger plans.
Lina Khan: Sometimes, you know, the companies decide that they’re gonna abandon the merger.
Lesley Stahl: If someone just says, “I’m not going to go forward,” that’s a win?
Lina Khan: That’s right.
Lesley Stahl: Obviously the companies are complaining like hell, screaming. They don’t like you. They’re afraid of you.
Lesley Stahl: They are they’re afraid you’re going to tie ’em up in court, you’re going to cost them a lot of money and they’re saying, “It’s just not worth it.”
Lina Khan: So it’s important to step back and keep all of this in context. Of all the thousands of deals that are proposed every year, the FTC and DOJ collectively investigate maybe 2% or 3%.
That might not sound like a lot, but start-up founders complain that she’s spooking investors so much, she’s actually stifling innovation. Others fear that her chasing the tech giants will cause a domino effect. Earlier this month, after it was reported that her counterpart at the Justice Department subpoenaed the chip maker Nvidia the stock market plunged.
Lesley Stahl: Do you ever worry about the power that the FTC and the chairman have that could result in a destabilizing of basically the whole economy?
Lina Khan: Of course we have to worry. But we also should worry about the destabilizing effect that can arise from companies believing that they’re above the law, and that they can be reckless, take massive risks in ways that can crash the economy, and then they can get away with just a slap on the wrist. And that creates a destabilization too.
Khan can be seen as a belated reaction to the financial crisis when the government decided banks were “too big to fail.” But has the pendulum swung too far? Corporations are pushing back with their own lawsuits to rein her in, setting up a possible showdown at the Supreme Court over the fate of the FTC.
Lesley Stahl: Should you be concerned that you are flirting with diminishing the muscle– the powers that you have if the Court decides you’re wrong? And this Court could very likely say you’re wrong.
Lina Khan: I think one challenge that agencies can face is when they shrink their own powers and authorities by not actually using the authorities that Congress has given them.
She’s obviously unlikely to survive in her job if former President Trump wins, though she’s admired by vice presidential nominee JD Vance –
Sen. JD Vance: Well look, I don’t agree with Lina Khan on every issue to be clear, but I think that she’s been very smart about trying to go after some of these big tech companies.
She’s surprisingly popular with other MAGA Republicans.
Lesley Stahl: There’s even a nickname for conservatives who support you. What is it?
Lina Khan: I’ll let you–
Lesley Stahl: Khan-servatives. Khan-servatives.
On the flip side, it’s unclear she would keep her job if Vice President Harris wins.
Lesley Stahl: Some of her biggest donors are people who want her to get rid of you. They want you off the scene. And they’re not just saying it privately. They’re going on television.
Lina Khan: Look, you know, my focus is not listening to what CEOs are saying on TV. You know, it’s important in these jobs to really stay focused and block out a lot of the noise.
Lesley Stahl: If you were asked to keep this job,would you say yes?
Lina Khan: Obviously, those are conversations one has with one’s family and that sort of thing. But—
Lesley Stahl: You don’t wanna have it with me?
Lina Khan: But absolutely, I mean, there’s so much work to be done, and it’s such an honor to be in this role. And it would be an honor to have that opportunity to keep going.
Produced by Shachar Bar-On. Associate producer, Jinsol Jung. Broadcast associate, Aria Een. Edited by April Wilson.
The chief executive officer of Kroger insisted Wednesday that merging with rival Albertsons would allow the two supermarket companies to lower prices and more effectively compete with retail giants like Walmart and Amazon.
Kroger CEO Rodney McMullen argued in favor of what would be the largest grocery chain merger in U.S. history while testifying during a federal court hearing in Oregon on the U.S. government’s request for a preliminary injunction that would block the $24.6 billion deal.
“The day that we merge is the day that we will begin lowering prices,” McMullen said while under questioning by a lawyer representing his company.
Rodney McMullen, chief executive officer of Kroger, right, arrives at the federal courthouse in Portland, Oregon, on Sept. 4, 2024. Kroger Co. and Albertsons Cos. supermarkets say they need to combine to compete against bigger rivals Amazon.com Inc., Costco Wholesale Corp. and Walmart Inc., while the Federal Trade Commission alleges the merger would lead to higher grocery prices for consumers and lower wages for the supermarkets’ unionized workforces.
Jordan Gale/Bloomberg via Getty Images
The two companies proposed joining forces in October 2022 after Kroger agreed to purchase Albertsons. The Federal Trade Commission sued early this year to prevent the deal, alleging the merger would eliminate competition and raise grocery prices at a time of already high food price inflation.
McMullen countered that argument by saying that Albertsons prices are 10-12% higher than Kroger’s and that the merged company would try to reduce that disparity as part of a strategy for keeping customers. Walmart now controls around 22% of U.S. grocery sales. Combined, Kroger and Albertsons would control around 13%.
“We know that pricing is going to continue to go down,” McMullen said.
His statements and the upcoming testimony of Albertsons CEO Vivek Sankaran were expected to be critical components of the three-week hearing, which is at its mid-point. What the two say under oath about prices, potential store closures and the impact on workers will likely be scrutinized in the years ahead if the merger goes through.
Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith’s and Harris Teeter. Albertsons, based in Boise, Idaho, operates 2,273 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw’s. Together, the companies employ around 710,000 people.
During the U.S. District Court proceedings, FTC attorneys argued that in the 22 states where the two companies compete now, they closely match each other on price, quality, private label products and services like store pickup. Shoppers benefit from that competition and would lose out if the merger is allowed to proceed, they said.
The FTC and labor union leaders also claim that workers’ wages and benefits would decline if Kroger and Albertsons no longer compete with each other. They’ve additionally expressed concern that potential store closures could create so-called food and pharmacy “deserts” for consumers.
Albertsons has argued the deal could actually bolster union jobs, since many of it and Kroger’s competitors, like Walmart, have few unionized workers.
Under the deal, Kroger and Albertsons would sell 579 stores in places where their locations overlap to C&S Wholesale Grocers, a New Hampshire-based supplier to independent supermarkets that also owns the Grand Union and Piggly Wiggly store brands.
Speaking in 2022 before the U.S. Senate subcommittee on competition policy, antitrust and consumer rights, the Albertsons CEO said his company’s acquisition of brands such as Safeway over the previous decade had allowed it to increase the number of its stores from 192 to 2,300.
“The intent is not to close stores. The intent is to divest stores,” Sankaran said at the time.
The FTC alleges that C&S is ill-prepared to take on those stores. Laura Hall, the FTC’s senior trial counsel, cited internal documents that indicated C&S executives were skeptical about the quality of the stores they would get and may want the option to sell or close them.
C&S CEO Eric Winn, for his part, testified last week in Portland that he thinks his company can be successful in the venture.
The FTC is seeking a preliminary injunction to block the merger while its lawsuit against the deal goes before an administrative law judge. U.S. District Judge Adrienne Nelson was expected to hear from around 40 witnesses before deciding whether to issue the injunction.
If she does decide to temporarily block the merger, the FTC plans to hold the in-house hearings starting Oct. 1. Kroger sued the FTC last month, however, alleging the agency’s internal proceedings are unconstitutional and saying it wants the merger’s merits decided in federal court.
The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming all joined the FTC’s lawsuit on the commission’s side. Washington and Colorado filed separate cases in state courts seeking to block the merger.
BOSTON — U.S. Rep. Lori Trahan is urging federal authorities to investigate Stewart Health Care System’s plans to sell its Massachusetts hospitals after the bankrupt company announced plans to close two of the facilities.
In a letter to the heads of U.S. Department of Justice, Federal Trade Commission and Department of Health and Human Services, Trahan said Steward’s decision to sell two hospitals — Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer, will “have a long-lasting impact on accessible healthcare” in those communities.
The Westford Democrat, whose district includes Ayer, called on the agencies to probe the closures and “closely monitor” the sale of Steward’s six other hospitals in Massachusetts, including Holy Family’s locations in Methuen and Haverhill.
“It is crucial to ensure that healthcare services remain accessible and affordable for patients as these hospitals transition to new ownership,” Trahan wrote.
The Department of Justice and other agencies recently launched an investigation into the impact of “greed” at Steward and other health care systems. As part of the investigation, the agencies plan to review the impact of private equity firms on patient health, worker safety and the quality of care for patients.
The Texas-based company is also the target of an investigation by the U.S. Attorney’s office in Boston, which is probing allegations that include fraud and violations of the Foreign Corrupt Practices Act. The federal law prohibits U.S. companies or citizens from engaging in bribery and corruption overseas.
Trahan’s request would expand the scope of that investigation to include “domestic crimes” as well as “the consumer harms patients have faced because of the company’s actions.”
Trahan cited the role of the private equity firm Cerberus Capital Management in Steward’s finances in Massachusetts and other states. She said acquisitions and sale-leaseback deals enriched Cerberus and Steward’s executives, including CEO Ralph de la Torre.
Last week, the U.S. Senate’s Committee on Health, Education, Labor, and Pensions voted to initiate the investigation and issue a rare congressional subpoena for Steward’s CEO Ralph de la Torre to testify on Capitol Hill before the panel at a September hearing.
Steward plans to put its 31 U.S. hospitals up for sale to pay down $9 billion in outstanding liabilities owed to creditors as part of the company’s bankruptcy proceedings. The company filed for federal bankruptcy protections in May.
Bids on Steward’s Massachusetts hospitals and other states were due last week= but the company hasn’t disclosed prospective buyers. The company’s attorneys have asked a federal bankruptcy judge on Monday to postpone a court hearing on the hospital sales until Aug. 13 as it finalizes lease terms and other details.
Meanwhile, the Healey administration’s plans to provide about $30 million in repurposed state-Medicaid funding to keep the hospitals running as they transition to new ownership is facing opposition from a committee representing creditors during the company’s bankruptcy proceedings.
In a court filing late Monday, the committee said it has “significant concerns” that the $30 million pledged by the state may provide near-term (and important) assistance in transitioning the hospital to new owners, “it will do so at the expense of the rest of debtors, their estates and their creditors.”
Gov. Maura Healey has pledged that “not a dime” of the $30 million will go to Steward and will instead help ensure a smooth transition to new hospital ownership. But she noted that her administration has little or no authority to block the hospital closures.
“It’s Steward’s decision to close these hospitals, there’s nothing that the state can do, that I can do, that I have the power to do, to keep that from happening,” Healey told reporters on Monday. “We are in this situation … because of the greed of one individual, Ralph de la Torre, and the management team at Steward.”
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com
BOSTON — U.S. Rep. Lori Trahan is urging federal authorities to investigate Stewart Health Care System’s plans to sell its Massachusetts hospitals after the bankrupt company announced plans to close two of the facilities.
In a letter to the heads of U.S. Department of Justice, Federal Trade Commission and Department of Health and Human Services, Trahan said Steward’s decision to sell two hospitals – Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer – will “have a long-lasting impact on accessible health care” in those communities.
The Westford Democrat, whose district includes Ayer, called on the agencies to probe the closures and “closely monitor” the sale of Steward’s six other hospitals in Massachusetts, including Holy Family’s locations in Methuen and Haverhill.
“It is crucial to ensure that healthcare services remain accessible and affordable for patients as these hospitals transition to new ownership,” Trahan wrote.
The Department of Justice and other agencies recently launched an investigation into the impact of “greed” at Steward and other health care systems. As part of the investigation, the agencies plan to review the impact of private equity firms on patient health, worker safety and the quality of care for patients.
The Texas-based company is also the target of an investigation by the U.S. Attorney’s office in Boston, which is probing allegations that include fraud and violations of the Foreign Corrupt Practices Act. The federal law prohibits U.S. companies or citizens from engaging in bribery and corruption overseas.
Trahan’s request would expand the scope of that investigation to include “domestic crimes” as well as “the consumer harms patients have faced because of the company’s actions.”
Trahan cited the role of the private equity firm Cerberus Capital Management in Steward’s finances in Massachusetts and other states. She said acquisitions and sale-leaseback deals enriched Cerberus and Steward’s executives, including CEO Ralph de la Torre.
Last week, the U.S. Senate’s Committee on Health, Education, Labor, and Pensions voted to initiate the investigation and issue a rare congressional subpoena for Steward’s CEO Ralph de la Torre to testify on Capitol Hill before the panel at a September hearing.
Steward plans to put its 31 U.S. hospitals up for sale to pay down $9 billion in outstanding liabilities owed to creditors as part of the company’s bankruptcy proceedings. The company filed for federal bankruptcy protections in May.
Bids on Steward’s Massachusetts hospitals and other states were due last week= but the company hasn’t disclosed prospective buyers. The company’s attorneys have asked a federal bankruptcy judge on Monday to postpone a court hearing on the hospital sales until Aug. 13 as it finalizes lease terms and other details.
Meanwhile, the Healey administration’s plans to provide about $30 million in repurposed state Medicaid funding to keep the hospitals running as they transition to new ownership is facing opposition from a committee representing creditors during the company’s bankruptcy proceedings.
In a court filing late Monday, the committee said it has “significant concerns” that the $30 million pledged by the state may provide near-term (and important) assistance in transitioning the hospital to new owners, “it will do so at the expense of the rest of debtors, their estates and their creditors.”
Gov. Maura Healey has pledged that “not a dime” of the $30 million will go to Steward and will instead help ensure a smooth transition to new hospital ownership. But she noted that her administration has little or no authority to block the hospital closures.
“It’s Steward’s decision to close these hospitals, there’s nothing that the state can do, that I can do, that I have the power to do, to keep that from happening,” Healey told reporters on Monday. “We are in this situation … because of the greed of one individual, Ralph de la Torre, and the management team at Steward.”
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.
Michigan Attorney General Dana Nessel has joined a coalition of 22 attorneys general in backing a Federal Trade Commission (FTC) order aimed at halting deceptive advertising practices by Intuit, the maker of TurboTax.
The order targets Intuit’s “misleading promotion” that falsely claims its preparation software is free when, in reality, most consumers end up paying for the service.
In the ongoing case of Intuit v. FTC, the attorneys general have filed a brief urging the U.S. Court of Appeals for the Fifth Circuit to uphold the commission’s order and dismiss Intuit’s appeal.
“Too many Americans have suffered unnecessary financial losses as a result of Intuit’s deceptive practices, especially low-income families and veterans who were otherwise eligible for free filing services elsewhere,” Nessel said in a news release Wednesday. “I stand firmly with my colleagues in urging the court to uphold the FTC’s decision. We must hold corporations like Intuit responsible for deceptive and misleading advertisements.”
A few years ago, I was lured into using TurboTax when I saw an advertisement claiming it was free. But after spending more than a half hour filling out the electronic form, TurboTax demanded money for its services.
I felt conned. Since I had already filled out the form, I was on the verge of paying the fee and chalking it up to a lesson learned. But I decided the principle was more important and used another service that acknowledged up front that a fee was involved.
The actions by the attorneys general followed a significant settlement in 2022, when a coalition of 50 states and the District of Columbia settled for $141 million over the company’s deceptive marketing and advertising.
In 2023, the commission issued an order requiring Intuit to stop advertising products as free unless there is no cost to all consumers. The company appealed the decision and is seeking to overturn the FTC’s cease-and-desist order.
As a result of the deceptive advertising, millions of Americans, especially low-income taxpayers and military families, have been harmed, the attorneys general claim. The brief details how Intuit allegedly manipulated search results to entice consumers into paying for tax preparation software, even when they were eligible to file their taxes for free. Many TurboTax customers ended up paying for services they should have received for free.
The other states involved in the legal action are Illinois, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Washington, and Wisconsin, along with the District of Columbia.
Just months away from being banned in the U.S., the Federal Trade Commission (FTC) appears to be putting some salt in TikTok’s wound. The agency has issued a bizarre message about referring a complaint about the social media app to the Department of Justice (DOJ).
Will Banning TikTok Solve Privacy Issues? | Future Tech
The FTC issued a statement on Tuesday saying its investigations “uncovered reason to believe” that TikTok and its parent company ByteDance, are “violating or are about to violate the law.” The commission says the violations (or would-be violations) are of the Children’s Online Privacy Protection Act (“COPPA”) and the FTC Act but didn’t provide specifics. Also, the statement mentions how making this action public is something the FTC doesn’t normally do, but it determined that it was in the public’s interest to release the statement. So, we’re letting you know that they think you should know.
A DOJ spokesperson says they can’t comment on the substance of the referral, but the department did consult with the FTC in advance and is considering the claim.
In the statement, the FTC mentions how its investigation began in 2019 with Musical.ly, the predecessor of TikTok. Back then, the commission did find that the company was “aware that a significant percentage of users were younger than 13 and received thousands of complaints from parents” and issued a fine of $5.7 million. It’s unclear if this complaint against TikTok is related or if the investigation found other violations.
TikTok says it has been working with the FTC for more than a year to address concerns it may have.
“We’re disappointed the agency is pursuing litigation instead of continuing to work with us on a reasonable solution,” a TikTok spokesperson said in an emailed statement Tuesday. “We strongly disagree with the FTC’s allegations, many of which relate to past events and practices that are factually inaccurate or have been addressed. We’re proud of and remain deeply committed to the work we’ve done to protect children and we will continue to update and improve our product.”
TikTok is not in the best spot right now, although it’s still incredibly popular. In April, President Joe Biden signed a bill requiring the divestment of TikTok or else face a U.S. ban. The social app is on the 270-day clock to figure out something, or it could wait for the upcoming presidential election and hope Trump wins as he’s suddenly come around to support TikTok. Maybe he found a dance that he liked watching on the app.
The U.S. government is suing Adobe, accusing the software maker of steering customers toward its most expensive subscription plans while concealing how much it costs to cancel.
The Federal Trade Commission said Monday that Adobe deceives customers by “hiding” the early termination fee for the company’s services, which includes popular tools such as Acrobat, Photoshop and Illustrator.
Specifically, Adobe encouraged consumers to enroll in “annual paid month” plans without disclosing that canceling could cost hundreds of dollars, according to the agency. Users who do try to cancel are met unfair roadblocks, the suit also alleges.
The lawsuit, filed in federal court by Department of Justice based on the FTC’s findings, names Adobe vice president Maninder Sawhney and the president of Adobe’s digital media business, David Wadhwani, as defendants. The FTC alleges that Adobe’s practices violate the Restore Online Shoppers’ Confidence Act.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” Samuel Levine, the FTC’s consumer protection bureau director, said in a statement. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel.”
Adobe did not immediately respond to a request for comment.
The FTC in 2023 proposed a “click to cancel” rule that would require businesses to make it as easy to cancel subscriptions as it is to enroll.
Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
In what has since created shockwaves across the nation, the Federal Trade Commission (FTC) voted 3-2 for banning noncompete agreements, which goes into effect 120 days after the rule is officially published in the Federal Register. This decision will undoubtedly have significant impact on both employers and employees alike, but what about black entrepreneurs?
The FTC defines a non-compete clause as, “a term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from (1) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or (2) operating a business in the United States after the conclusion of the employment that includes the term or condition.”
Historically, non-competes have been used to restrict employees from working in the same industry after leaving their former employer. Though the intention is to protect the intellectual property of businesses, non-competes have often negatively affected competition in product and service markets, especially with Black workers.
If written properly, most non-competes have outlined specific restrictions of a current or former worker, who can be their employer, where they can work for said employer, and for how long they aren’t allowed to work for an employer, which can be unduly burdensome. Imagine being told who to work for and who not to work for. That basically is a non-compete. Those who have signed non-competes and wish to increase their salaries, will either have to accept where they are or change industries and possibly, locations. These are all unnecessary hassles that restrict a competitive market and perpetuate wage suppression.
I have reviewed contractual agreements of several Black clients who I have worked with in a variety of areas, from tech to entertainment. Many of my clients desired to venture out or hang up their proverbial “shingle,” signaling the start of their own business, but have been deterred by these non-compete clauses.
Approximately 18 percent of the workforce, which is about 30 million people, is covered by non-compete agreements. In the Black community, there’s a saying that goes, “If a white person has a cold, then a black person has pneumonia.” What this essentially means is that if majority of Americans are suffering from a particular thing, that thing already has, currently is, or will be suffered much more by Black people. Here, if many Americans are experiencing the effects of wage suppression and restrictions in the market, then the Black community feels it worse. Add in Black workers who want to start their journey to entrepreneurship and it becomes an almost impossible task to accomplish.
FTC estimates that the impact of banning non-competes could increase worker pay by $300 billion and it can lead to 8,500 more new businesses each year. For Black entrepreneurs, the elimination of non-competes can now open the door to new innovations, creativity, and fairer competition in the marketplace. This ban can help business owners attract top talent, as there would be no restrictions on the mobility of skilled workers; thus, strengthening their businesses and enhancing their competitiveness.
With that stated, there will be several legal challenges to the implementation of the FTC’s non-compete ban. Within 24 hours of the vote being published, both the United States (US) Chamber of Commerce, the world’s largest business organization, and the Business Roundtable, an association of chief executive officers of America’s leading companies, filed suit against the federal agency.
In a statement released announcing the lawsuit, the US Chamber of Commerce declares, “[t]he FTC contends that by using regulation they can simply declare common business practices to be ‘unfair methods of competition’ and thus illegal. This is despite the fact that noncompete agreements have been around longer than the 110-year-old FTC and until now no one has suggested that they are illegal.” It goes on to state, “[i]f the FTC can regulate noncompete agreements, then they can decide to regulate or even ban any other business practice. All without a vote from Congress.”
I believe that many more businesses, organizations, associations, and groups will file lawsuits and lobby against, what they believe, is an overreach by the Federal Trade Commission on governing business transactions. Furthermore, if any of the federal courts who hear the cases decide to grant a stay or a preliminary injunction on the ruling, the effective date could be postponed. Then, if the cases are appealed thereafter, the ruling would be delayed for many more months.
So while this non-compete ban could take some time to go into effect, black entrepreneurs should start positioning themselves to take advantage of it.
