FTC chairman Jon Leibowitz
Image: Diego M. Radzinschi, National Law Journal
After a four-year tenure marked by an increased focus on privacy and aggressive consumer protection, Federal Trade Commission Chairman Jon Leibowitz announced today that he is stepping down on February 15.
"I don't have any regrets," Leibowitz said in a conference call with reporters. "I like to think we have made America in a small way a better place to live and helped ensure an even playing field for businesses."
Fittingly, he capped off his departure — "before I go off into the sunset," as he put it — by announcing two significant privacy actions. The FTC settled a case for $800,000 with the operator of the Path social networking app for improperly collecting personal information, and agency staff released a detailed report recommending ways to improve data and privacy practices in the mobile marketplace.
Path, a social networking service that allows users to keep journals about "moments" in their life and to share that journal with a network of friends, allegedly collected personal information from its users' mobile device address books without their knowledge and consent. The company also allegedly violated the Children’s Online Privacy Protection Act Rule by collecting personal information from 3,000 children under the age of 13 without first getting parental consent.
The FTC staff report makes recommendations to players in the mobile marketplace such as Amazon, Apple, BlackBerry, Google, and Microsoft, as well as app developers for ways to ensure consumers get clear and timely disclosures about what data is collected and how it is used.
Path is not the first social networking service to come under FTC fire — the agency under Leibowitz also went after Facebook, Twitter, and MySpace for violating privacy promises to consumers. Google Inc. also agreed to pay a record $22.5 million civil penalty in August 2012 to settle charges that it misrepresented its privacy policies to users of Apple's Safari Internet browser.
However, the FTC's much-hyped antitrust investigation of Google's dominance in the search market came to an anticlimactic end on January 3, when the agency announced it had closed its inquiry. The FTC required Google to license patents that are essential to the interoperability of electronic devices but secured only minimal agreements related to Google's search business. "After promising an elephant more than a year ago, the Commission instead has brought forth a couple of mice," wrote FTC Commissioner J. Thomas Rosch in a dissent.
Overall, the FTC under Leibowitz filed 257 consumer protection cases in federal courts and 78 administrative cases, winning almost $260 million in consumer redress. Notable cases include a $40 million settlement with Skechers USA Inc. for making unsubstantiated claims that its shoes would strengthen and tone muscles, and cracking down on juice maker POM Wonderful for claiming pomegranate juice could help prevent and treat diseases.
On the antitrust side, the FTC under Leibowitz challenged 81 mergers, leading to 51 consent orders, 12 administrative complaints, and 18 mergers that were abandoned.
Michael Keeley, an antitrust partner at Axinn, Veltrop & Harkrider, said Leibowitz will be remembered for his focus on so-called pay-for-delay deals between brand name and generic drug makers.
