Consumer Protection/Privacy Archives

Consumer Protection/Privacy

General Court Confirms that the Commission May Rely on Lawfully Seized Recordings Even if Made Unlawfully by a Third Party

by McDermott Will & Emery | Sep 28, 2016 | Cartel Enforcement, Consumer Protection/Privacy, EC Developments

On 8 September 2016 the General Court (“GC”) dismissed Heiploeg’s appeal against the European Commission’s (“Commission”) decision in Shrimps (AT.39633) and confirmed that the Commission may rely on recordings seized lawfully in a “dawn raid” even if the recordings were made illegally by a third party (T-54/14). This judgment reminds us of the delicate balance between the right to respect for private life and the Commission’s need to obtain high probative evidence when investigating cartels.

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FTC Encourages VA to Adopt Proposed Rule Preempting State Laws to Allow Advanced Practice Registered Nurses to Provide Services Without Physician Oversight

by Emily Townsend | Aug 1, 2016 | Consumer Protection/Privacy, DOJ Developments, FTC Developments, Healthcare Antitrust, Joint Ventures/Competitor Collaboration

On July 25, 2016, the Federal Trade Commission (FTC) submitted comments to the Department of Veterans’ Affairs (VA) supporting a proposed rule only affecting VA facilities that would authorize Advanced Practice Registered Nurses (APRNs) to provide primary health care services without the mandatory supervision of physicians, regardless of state or local laws, with limited exceptions. Currently, APRNs in the employ of the VA are subject to VA requirements as well as various regulations on a state-by-state basis, with physician supervision required in over half of the states. Under Proposed Rule RIN 2900-AP44, APRNs that meet VA standards would have the authority to provide a described list of services without such physician supervision.

While the FTC acknowledged the important role of federal and state legislators in determining the “best balance of policy priorities,” the FTC has expressed skepticism of state laws requiring physician supervision. They have noted that such requirements “may raise competition concerns because they effectively give one group of health care professionals the ability to restrict access to the market by another competing group of health care professionals, thereby denying health care consumers the benefits of greater competition.” In fact, the FTC argued that physician supervision requirements may increase the cost of services that APRNs could provide, and by relaxing such requirements, consumers “may gain access to services that would otherwise be unavailable.” This increased access could also address shortages in access to primary and specialty care. As the FTC noted, the US has current and projected health care workforce shortages, particularly in primary care physicians, and the VA has emphasized the need to provide care to veterans in rural areas who have limited access to specialty services, some of which APRNs could provide.

Additionally, the FTC commented that the proposed rule could yield information about models of health care delivery. Under the current system, the VA’s use of APRNs is limited by state regulation. By preempting the state requirements, the FTC argued that the VA would be free to “innovate and experiment with models of team-based care.”

Interestingly, the proposed rule only applies within the scope of VA employment, which falls outside of “competition in the private sector” for which the FTC acknowledged it is typically concerned. But in this instance, the FTC concluded that the VA’s actions could positively impact competition in the health care service provider markets by encouraging entry that could “broaden the availability of health care services” outside of the VA’s system.

This is another example of antitrust regulators’ interest in occupational licensing and competition concerns generally. Just as this letter encourages competition between physicians and nurses for certain health care services, last month, US Department of Justice (DOJ) and FTC jointly submitted a letter encouraging competition between lawyers and non-lawyers in the provision of legal services in North Carolina. We previously analyzed that letter, and other important developments in occupational licensing that have occurred since February 2015, when the Supreme Court affirmed an FTC decision not to apply state action antitrust immunity for [...]

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McDermott’s Antitrust M&A Snapshot Published on July 17, 2016

by McDermott Will & Emery, Jon B. Dubrow and Joel R. Grosberg | Jul 27, 2016 | Consumer Protection/Privacy, DOJ Developments, EC Developments, EU Developments, FTC Developments, Mergers & Acquisitions, Monopolization/Abuse of Dominance

McDermott’s Antitrust M&A Snapshot is a resource for in-house counsel and others who deal with antitrust M&A issues but are not faced with these issues on a daily basis. In each quarterly issue, we will provide concise summaries of Federal Trade Commission (FTC), Department of Justice (DOJ) and European Commission (EC) news and events related to M&A, including significant ongoing investigations, trials and consent orders, as well as analysis on the trends we see developing in the antitrust review process.

United States: January – June Update

The Federal Trade Commission (FTC) and US Department of Justice (DOJ) have been actively challenging mergers and acquisitions in the first half of 2016. In some instances, the parties abandoned their deal once the FTC or DOJ issued a complaint, in others, the parties entered into consent agreements with the agencies. In matters where a divestiture is an acceptable remedy, the FTC and DOJ have required robust divestitures with financially and competitively viable buyers. There is increasing pressure for broad divestitures and for upfront buyers in industries where the agencies do not have ample experience and where there may not be multiple competitive buyers willing to acquire the assets.

In merger challenges, the agencies have been successful in obtaining preliminary injunctions in Washington, DC, but have been less successful outside of their home court. The agencies have successfully argued price discrimination markets, where sales of products to a narrow group of customers were the market, and courts are accepting the agencies’ narrow market definition. We also see a trend in challenges due to innovation, where the merging parties are the market leaders in new developments and research and development in particular areas. Investigations continue to take many months, with many approaching or exceeding a year.

EU: January – June Update

In the EU, there has been a noticeable increase in the number of notified transactions to the European Commission (from 277 notifications in 2013 to 337 in 2015). Most of these transactions have been cleared by the EU regulator in Phase I without any commitments. However, there have still been a number of antitrust interventions requiring the merging parties to offer, often far-reaching, remedies. One industry has recently seen a particularly high ratio of antitrust intervention is the telecoms sector. For example, in the merger between the mobile operators Telenor and TeliaSonera, the parties abandoned the transaction due to European Commission opposition to the transaction. The European Commission publicly announced that the transaction would not have been cleared, and that the remedies offered by the companies were not convincing. A prohibition decision was also issued, despite the offered remedies, in the failed combination of Telefónica UK’s “O2” and Hutchison 3G UK’s “Three”. This transaction involved the longest merger control review by the European Commission to end up in a prohibition decision (243 calendar days, compared to the average of 157 calendar days to block a deal).

With regard to current trends in merger control remedies at the level of the European Commission, there continues to be [...]

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DOJ and FTC Encourages Competition Between Lawyers and Non-Lawyers in the Provision of Legal Services in Comments on North Carolina “LegalZoom” Bill

by Emily Townsend | Jul 7, 2016 | Consumer Protection/Privacy, DOJ Developments, FTC Developments

On June 10, 2016, the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) jointly submitted a letter recommending that the North Carolina General Assembly limit the definition of the “practice of law” only to activities for which “specialized legal knowledge and training” is demonstrably necessary to protect consumers. The regulators argue that if such a definition were applied to North Carolina House Bill 436, presently under consideration, it would promote competition between lawyers and non-lawyers in the provision of legal-related services. (more…)

Polish Competition Authority Supports UBER

by McDermott Will & Emery | May 13, 2016 | Consumer Protection/Privacy, EC Developments, Monopolization/Abuse of Dominance

On 5 May 2016, the Polish Office of Competition and Consumer Protection (UOKiK) published a position paper in which it expressed its opinion on Uber’s operations on the Polish market for transportation services.

UOKiK has been monitoring and analysing the effects of the emergence of such online platforms on the Polish market and concluded that Uber (i) encourages competition, (ii) is beneficial to consumers and (iii) provides for innovative solutions.

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EU: Merger case cleared following offer of FRAND technology license

by McDermott Will & Emery | Apr 25, 2016 | Consumer Protection/Privacy, EC Developments, IP Antitrust, Mergers & Acquisitions, Monopolization/Abuse of Dominance

On 20 April 2016, the European Commission (Commission) cleared, under its merger control rules, the acquisition of Equens and PaySquare by Worldline subject to, amongst others, a commitment to license technology to any customer interested, at Fair, Reasonable and Non-Discriminatory (FRAND) conditions.

Worldline is a French provider of payment services and terminals, financial processing and software licensing and e-transactions services. Equens offers a number of services across the value chain of both payments processing and cards processing services. Its fully-owned subsidiary, PaySquare, provides merchant acquiring services. This transaction combines two large payment systems operators, active across the full value chain in both payment processing and card processing services.

The EU antitrust regulator was concerned that the acquisition would have raised certain issues with respect to, in particular, merchant acquiring services in Germany. The Commission’s market investigation revealed that Worldline’s Poseidon software and modules are used by the majority of German network service providers (including PaySquare), there are no other readily available alternatives to Poseidon and post-transaction, Worldline would have the ability and the incentives to favour its new subsidiary PaySquare, in terms of price and quality, over other network service providers relying on Poseidon.

In order to address the Commission’s concerns, the companies offered a commitment to grant licenses for the Poseidon software on FRAND terms during a period of 10 years. Specifically, this commitment consists of the following elements:

The granting of a license for Poseidon and its modules to third-party network service providers under FRAND terms and capping of the maintenance fees
A monitoring mechanism to ensure compliance with FRAND terms by a licensing trustee and by a group composed of network service providers
Giving access to the Poseidon source code under certain conditions
Transferring the governance of the ZVT protocol, on which most German point of sale terminals run, to an independent not for profit industry organisation

The Commission’s decision to accept this commitment is interesting for a number reasons; the Commission generally has a strong preference for structural rather than behavioural undertakings, FRAND obligations are typically applicable to technologies that are standardised, and this case presents the first time that a commitment to licence on FRAND terms has been used as a remedy under the EU Merger Regulation.

Mediation: New Obligations for France-based Traders

by McDermott Will & Emery | Feb 25, 2016 | Consumer Protection/Privacy, French Developments

Since entry into force on 1 January 2016 of the French provisions transposing the 2013 EU directive regulating mediation of consumer disputes (Directive 2013/11/EU of 21 May 2013 on alternative dispute resolution for consumer disputes (“ADR”)), and the operability of the online platform provided by the 2013 EU regulation on online dispute resolution for consumer disputes, (“ODR”), France-based traders must comply with new rules regarding in-store and online sales. Essentially, France-based traders must inform consumers of the possibility to have recourse to mediation.

Generally speaking, ADR rules aim at ensuring that EU consumers have access to ADR entities when resolving their contractual disputes with EU-based traders in order to reduce the number of disputes brought before courts and, hence, favor a faster resolution of “simple” disputes. Access to ADR entities must be ensured no matter what product or service is purchased, whether the product or service was purchased online or offline, and whether the trader is established in the consumer’s EU Member State or in another EU Member State.

On 15 February 2016, the EU Commission published on the ODR platform a list of French ADR entities, so-called Médiateurs, that meet the standards of the ADR Directive and are registered with the French ad hoc authority (Commission d’évaluation et de contrôle de la médiation de la consommation).

The ODR platform allows consumers, and in some jurisdictions (Germany, Belgium, Luxembourg and Poland) traders too, to file a claim online. The ODR platform enables a connection between the trader and the consumer, who may then decide to submit the dispute to aMédiateur agreed upon with the trader.

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French Class Action Law Has Less Impact Than Expected

by McDermott Will & Emery | Feb 10, 2016 | Consumer Protection/Privacy, French Developments, Private Litigation

Since the entry into force on 1 October 2014 of the provisions of the “Hamon” law of 17 March 2014, which introduced class actions into French law in relation to consumer and competition law matters, only six class actions have been brought.

The first action was filed on the date the new law came into effect by the consumer association UFC – Que Choisir against Foncia, a real estate group, to obtain compensation for the service charges levied by Foncia. The most recent class actions seem to have been brought in May 2015 by the consumer association Familles Rurales: one against SFR, a network operator that allegedly misled consumers as to the geographic coverage of its 4G network, and one very limited action against a campground operator who forced campervan owners to buy new ones after 10 years if they wanted to keep their plots.

Class actions are clearly not as popular as had been hoped, at least not yet. Indeed, of the (only) six procedures brought before the French Courts, four were brought around one month after the law came into effect, and all relate to consumer matters. One action led to a €2 million settlement intended to compensate the damages suffered by 100,000 consumers who had been required to pay excessive charges for elevator tele-surveillance.

The limited attractiveness of class actions is probably due to the strict conditions for bringing an action under the Hamon law.

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The UK Consumer Rights Act 2015: A New Advance in Private Antitrust Enforcement

by McDermott Will & Emery | Jan 11, 2016 | Consumer Protection/Privacy, EU Developments, Private Litigation

On 1 October 2015 the UK Consumer Rights Act 2015 (CRA 2015) entered into force, bringing with it a raft of changes pertaining to consumer protection law and competition law litigation. These changes were discussed in an article featured in our most recent issue of our flagship publication, International News: Focus on Tax (Issue 3 2015).

The CRA 2015 sets the scene for the future proliferation of competition damages actions in the United Kingdom and consolidates the country’s reputation as one of the most advanced competition regimes in Europe.

The new rules introduce a series of significant changes to facilitate claims, including the establishment of a fast-track procedure for simple claims, the introduction of a collective settlement regime, and an extension of the limitation period for actions before the Competition Appeal Tribunal (CAT), the United Kingdom’s specialist competition law tribunal.

Arguably the most controversial and high-profile measure is the introduction of collective proceedings before the CAT which, subject to the CAT’s discretion, can be brought on an opt-in or opt-out basis for both follow-on and stand-alone claims.

The CAT will certify claims that are eligible for inclusion in collective proceedings. In this regard the following three conditions must be met. There must be an identifiable class; the claim must raise common issues; and it must be suitable for collective proceedings, taking into account, inter alia, whether or not collective proceedings are an appropriate means for the fair and efficient resolution of the common issues, the costs and benefits of the collective proceedings, and the size and nature of the class.

If the CAT decides that collective proceedings are appropriate, it then determines whether the proceedings should be “opt-in” or “opt-out”. The CAT will take into account all the circumstances, including the estimated amount of damages that individual class members may recover, the strength of the claims, and whether it is practical for the proceedings to be brought on an opt-in or opt-out basis.

If appropriate, the CAT will also authorise an applicant to act as class representative. The representative must not have, in relation to the common issues for the class members, a material interest that is in conflict with the interests of the class members, and must be someone who would act fairly and adequately in the interests of all class members.

In order to prevent the rise of a “litigation culture”, certain safeguards are included. For instance, the CAT may not award exemplary damages in collective actions, and contingency fees, i.e., damages-based agreements whereby the lawyers are paid a proportion of the damages obtained, are not permitted in opt-out collective actions.

There will no doubt be considerable up-front litigation surrounding the issue of class certification before the first cases get off the ground. It is likely, however, that the mere threat of class actions before the CAT will represent a powerful weapon in the hands of the claimant when negotiating a settlement.

FTC Merger Review Likely to Incorporate Analysis of Privacy Issues

by Emily Townsend | Mar 3, 2015 | Consumer Protection/Privacy, FTC Developments, Mergers & Acquisitions

The Federal Trade Commission (FTC or the Commission), along with the U.S. Department of Justice, can challenge mergers it believes will result in a substantial lessening of competition – for example through higher prices, lower quality or reduced rates of innovation. Although the analysis of whether a transaction may be anticompetitive typically focuses on price, privacy is increasingly regarded as a kind of non-price competition, like quality or innovation. During a recent symposium on the parameters and enforcement reach of Section 5 of the FTC Act, Deborah Feinstein, the director of the FTC’s Bureau of Competition, noted that privacy concerns are becoming more important in the agency’s merger reviews. Specifically she stated, “Privacy could be a form of non-price competition important to customers that could be actionable if two kinds of companies competed on privacy commitments on technologies they came up with.”

At this same symposium, Jessica Rich, director of the FTC’s Bureau of Consumer Protection, remarked on the agency’s increasing expectations that companies protect the consumer data they collect and be more transparent about what they collect, how they store and protect it, and about third parties with whom they share the data.

The FTC’s Bureaus of Competition and Consumer Protection fulfill the agency’s dual mission to promote competition and protect consumers, in part, through the enforcement of Section 5 of the FTC Act. With two areas of expertise and a supporting Bureau of Economics under one roof, the Commission is uniquely positioned to analyze whether a potential merger may substantially lessen privacy-related competition.

The concept that privacy is a form of non-price competition is not new to the FTC. In its 2007 statement upon closing its investigation into the merger of Google, Inc. and DoubleClick Inc., the Commission recognized that mergers can “adversely affect non-price attributes of competition, such as consumer privacy.” Commissioner Pamela Jones Harbour’s dissent in the Google/DoubleClick matter outlined a number of forward-looking competition and privacy-related considerations for analyzing mergers of data-rich companies. The FTC ultimately concluded that the evidence in that case “did not support the theories of potential competitive harm” and thus declined to challenge the deal. The matter laid the groundwork, however, for the agency’s future consideration of these issues.

While the FTC has yet to challenge a transaction on the basis that privacy competition would be substantially lessened, parties can expect staff from both the Bureau of Competition and the Bureau of Consumer Protection to be working closely together to analyze a proposed transaction’s impact on privacy. The FTC’s review of mergers between entities with large databases of consumer information may focus on: (1) whether the transaction will result in decreased privacy protections,i.e., lower quality of privacy; and (2) whether the combined parties achieve market power as a result of combining their consumer data.

This concept is not unique to the United States. The European Commission’s 2008 decision inTomTom/Tele Atlas examined whether there would be a decrease in privacy-based competition [...]

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