A Decade Later, AT&T Pays A Pittance For Lying About Its Unlimited Data Plans

from the ill-communication dept

Back in 2014 the FTC sued AT&T for selling "unlimited" wireless data plans with very real and annoying limits. The lawsuit noted that starting in 2011, AT&T began selling "unlimited" plans that actually throttled upwards of 90 percent of your downstream speeds after using just two or three gigabytes of data. AT&T spent years trying to wiggle out of the lawsuit via a variety of legal gymnastics, including at one point trying to claim that the very same net neutrality and FCC Title II rules AT&T was trying to kill prevented the FTC from holding it accountable.

Nearly a decade after AT&T's molestation of the dictionary began, the company has finally agreed to a $60 million settlement with the FTC without actually admitting any wrongdoing. That $60 million, after lawyers get a cut, will be split among millions of customers who signed up for AT&T unlimited data plans before 2011. Moving forward, AT&T also has to clearly disclose any limits on its "unlimited data plans" in a conspicuous manner (read: not hidden via fine print or embedded in a hyperlinked asterisk).

For a company that pulled down $46 billion in revenues in the last three months that's not much of a penalty. And because the FTC's ability to rein in telecoms is restricted only to policing offenses that are very clearly "unfair and deceptive" under the FTC act, AT&T is, of course, still imposing all manner of restrictions on its unlimited data plans, it's just being marginally more clever about it. For example. AT&T's latest "unlimited" plans, released just last month, include all manner of restrictions on how you can use them and how much bandwidth you can use, AT&T's just marginally more up front about it.

The problem is the government has been doling out wrist slaps on this subject for the better part of a decade without much to show for it. New York's Attorney General forced Verizon to dole out $100 million in refunds as long ago as 2007 in a bid to get the company to stop lying. Fast forward to 2019, and Verizon's still selling unlimited data plans with limits; in fact it now charges its unlimited data users extra if they want to actually view movies in HD. Sprint has also experimented with throttling video, music, and games on its unlimited data plans unless you pony up more cash.

Regulators have generally looked the other way while carriers use their dominance to impose arbitrary nickel-and-diming limits. But because they inform users of the restrictions in a 400 page EULA, the FTC lacks the authority to really crack down on the behavior (assuming it had the resources or bandwidth to even do so in the first place) because it's not crystal clear they're being "unfair and deceptive." The FTC's Rohit Chopra issued a statement making it clear that a lack of competition is the primary culprit here:

"AT&T’s bait-and-switch scam is a good window into the many harms that result from dominant companies operating without the discipline of meaningful competition,” he said. ”Their market power, financial resources, and one-sided information gives them license to ignore their own contractual obligations while aggressively enforcing every little clause in the fine print."

This sort of stuff is only going to get worse. While the FTC's authority is limited, the FCC was built from the ground up to hold telecoms accountable. But the FCC's recent decision to self-immolate at lobbyist request not only gutted net neutrality, it eliminated much of this authority over ISPs. It also eliminated transparency rules requiring ISPs be transparent about the types of connections they're selling. Eroding the FCC's power and shoveling oversight to a resource and authority constrained FTC was always the entire point of the gambit, something many folks still don't seem to understand.

In other words, unless states get involved (unlikely in more than half of them given AT&T's immense regional lobbying power), there's really not much stopping ISPs from misleading consumers about the type of connections they're buying, proving they're just modestly clever about it. And with the looming T-Mobile Sprint merger eroding 25% of existing competition, there's less incentive to compete on price or much of anything else. Guess what happens when you combine lobbyist-neutered regulatory oversight with limited competition?

Filed Under: competition, false advertising, ftc, settlement, transparency, unlimited, wrist slap
Companies: at&t

Skin Care Company, Sunday Riley, Somehow Gets No Consequences In Fake Reviews FTC Settlement

from the none-off-their-back dept

We've long discussed the problem that is astroturfing and companies that abuse website reviews sections by inputting fake positive reviews for their own products. These fake reviews break the ecosystem of sites like Yelp and many others, where a big part of the draw to the sites are the communities that provide helpful, honest reviews. It's also been the case, however, that such fake review campaigns have occasionally come with fines or lawsuits with limited clarity on precisely what laws were being broken.

Still, the FTC is a thing and it would seem to be in that organization's purview to mete out some kind of punishment for the truly bad actors out there. In the case of skincare company Sunday Riley, however, it seems that FTC settlements for truly egregious fake review campaigns are entirely without teeth.

Let's start with the scheme itself. According to the FTC, for two years, spearheaded by founder Sunday Riley herself, employees and interns were tasked with both voting down real negative reviews on Sephora.com, as well as setting up fake accounts for Sephora and inputting fake positive reviews. This, again, was directly communicated by Riley herself.

The FTC shared snippets of multiple emails sent by the CEO. In these emails, Riley urged her employees to always use a "virtual private network", or VPN, before writing fake reviews so they aren't traced back to the company.

"If you see a negative review -- DISLIKE it," Riley said in one of her emails to employees. "After enough dislikes, it is removed. This directly translates to sales!!"

Most recently in April 2018, interns of the company were also asked to make fake Sephora accounts and write reviews of Sunday Riley skincare products.

So, yeah, really blatant, really fake, and really shady. This was a coordinated attempt to falsely manipulate the review system of Sephora for the purposes of fooling the public into buying more product. That certainly feels like about as blatant a case requiring FTC involvement as the fake review subject is going to get.

And the FTC did get involved. It pushed Sunday Riley into settling with the agency. And boy, what a settlement it was.

As part of the settlement, Sunday Riley agreed not to write fake reviews. The company did not admit wrongdoing or receive any form of punishment.  FTC commissioners Chopra and Slaughter disagreed with the settlement, arguing that the company should have paid a higher price.

"Going forward, the FTC should seek monetary consequences for fake review fraud, even if the exact level of ill-gotten gains is difficult to measure," Chopra and Slaughter said in their letter.

"Today's proposed settlement includes no redress, no disgorgement of ill-gotten gains, no notice to consumers, and no admission of wrongdoing. Sunday Riley and its CEO have clearly broken the law, and the Commission has ordered that they not break the law again."

Yeah, that's basically right. The FTC settled with Sunday Riley by simply asking that they please not break the law and act so shitty again. Meanwhile, the company has admitted no wrong doing, paid no fine, or suffered any other consequence. Honestly, what the point of this FTC settlement is, is beyond me. Are we to reach settlements with thieves that consist of a request that they not steal any longer?

Filed Under: fake reviews, ftc, punishment
Companies: sunday riley

The Cable Industry Makes $28 Billion Annually In Bullshit Fees

from the false-adverting-by-another-name dept

Last week we highlighted a study showing that your cable bill can be as much as 45 percent higher than the advertised price thanks to bullshit fees. Now a new study by Consumer Reports shows that up to 24 percent of your monthly cable bill is comprised of said bullshit fees. The fees are designed specifically for one purpose: to let companies falsely advertise one rate, then charge you significantly more money. It's effectively false advertising, but efforts to rein in the practice are fleeting to nonexistent, because creatively fleecing American consumers is just so hot right now.

Consumer Reports examined 787 consumer cable bills from 13 top cable providers and found that while the average user paid around $156.71 per month for cable TV, users in reality paid $217.42 a month once fees were included. As such about 24 percent of your cable TV bill each month ($37.11) is made up of fees and hidden surcharges, generating about $450 per year per consumer for the industry, or about $28 billion in total.

The report is quick to highlight how some of the bullshit fees (like the "regulatory recovery fee") are named in such a way to trick the consumer into blaming government. The group reached out to 74 consumer reps posing as a customer and found that support reps are pretty clearly trained to create that impression:

"Often these fees are misleadingly portrayed by cable providers as government-mandated surcharges so that consumers blame the government instead of cable providers. One such fee is the “regulatory recovery fee,” specifically named for just this purpose.

Consumer Reports researchers say they posed as consumers and called 74 customer service representatives (CSR), who routinely tried to blame government for excessive surcharges.

"At least one CSR of every major provider that our secret shoppers contacted misstated that fees were mandated by the government, without a clear distinction made between company-imposed fees and regulatory pass-through fees," the report said.

One of the industry's favorite, more recent fees is the "Broadcast TV fee," which we've hammered on previously. This fee simply involves taking a portion of the cost of programming and burying it below the line as an itemized fee, again with an eye on falsely advertising a lower rate. Thanks in part to a government that can't be bothered to protect consumers from said false advertising, Comcast has quietly been jacking up this fee for the better part of the last decade with zero repercussions whatsoever:

"The study found that in 2015, Comcast started charging consumers a $1-a-month Regional Sports Fee and $1.50-a-month broadcast TV fee ($2.50 per month). By 2019 those fees had ballooned to $18.50 a month, or a 600 percent increase in just four years."

Cool. While some bills have been proposed to rein in the practice, they routinely go nowhere thanks to our campaign contribution slathered Congress. And the FCC just neutered much of its authority over broadband and cable TV providers at lobbyist behest. Good times, yeah?

Keep in mind this is how the cable TV industry behaves when competition from streaming alternatives is steadily driving customers to cut the traditional cable TV cord, illustrating how organic competition isn't always enough to prevent entrenched predatory monopolies from behaving badly. Cable giants figure that sure, they may lose some TV subscribers by being predatory bastards, but they'll just recoup those costs by raising the costs of broadband (where they hold a more solid natural monopoly, another problem we apparently don't want to do anything about).

Filed Under: bogus fees, broadcast tv fee, cable industry, false advertising, fcc, fees, ftc, price hikes, regulatory recovery fee
Companies: comcast

Equifax Victims Jump Through Hoops To Nab Settlement Money They Won't Get Anyway

from the dysfunction-junction dept

So we've noted that the FTC's settlement over the Equifax hack that exposed the public data of 147 million Americans is a bit of a joke. The FTC originally promised that impacted users would be able to nab 10 years of free credit reporting or a $125 cash payout if users already subscribed to a credit reporting service. But it didn't take long for the government to backtrack, claiming it was surprised by the number of victims interested in modest compensation, while admitting the settlement failed to set aside enough money to pay even 248,000 of the hack's 147 million victims.

This week, the Equifax Settlement Administrator sent out an email doubling down on the dysfunction, demanding that users who applied for their $125 prove they already have credit monitoring services. Users are being told they need to prove they subscribe to such services by October 15, or they won't get the money. Worse perhaps, the notice reiterates that even if you can prove you subscribe to credit monitoring services, you probably won't get anywhere near $125 because the settlement failed to set aside enough money to fulfill even a fraction of its promise:

"This latest email again reminds users that even if you can prove you have credit reporting already, you still may not get the full $125 thanks to the limitations of the settlement. In response to what it’s calling “overwhelming” demand, the FTC also urges those who submitted a claim for $125 switch to the free credit reporting offer instead."

One problem is that "free credit monitoring" is largely a useless perk. Such services are routinely doled out for free every time there's a major hack or privacy breach, which drop at a rate of around once a week now. Usually these services are included as a settlement freebie to make the settlement itself seem more substantive than it actually is. But the other major problem is that the FTC and its settlement partners gave the impression that users would at least get $125 for their troubles, set aside a tiny fraction of the money they'd need, then acted shocked when users signed up.

Most of the legal experts I've talked to about this say it would have been fairly easy to strike a more productive, less chaotic settlement. Instead of free credit reporting, the settlement could have simply requested victims have their credit reporting temporarily frozen (until needed), something which costs nothing. And while it still may have been underwhelming, the settlement also could have promised individual users a cash payout they could have actually met. The general consensus remains that the settlement, as structured, teeters somewhere between negligence and incompetence:

"James Grimmelmann, a professor of law at Cornell Tech and Cornell Law School told Motherboard the FTC’s failure to predict the public’s interest teeters toward negligence. “Even a single-digit percentage claim rate for this one would have exhausted the $31 million 50 times over,” he says. “It was negligent on the part of the FTC not to expect that more victims would choose the cash payment in a case this prominent and this egregious, instead of the worthless credit monitoring.”

Users can still apply for up to $20,000 in compensation if they can clearly prove the hack directly contributed to concrete harm like identity theft, but by and large the settlement is the poster child for meaningless privacy wrist slaps. Outside of bad press coverage, there's absolutely nothing here that would deter Equifax from future lax security and privacy practices, and consumers get little to compensate them for what is one of the biggest data breaches in American history. The FTC's primary function appears to have been to act as a PR proxy for Equifax's reputation, primarily by pretending the company had been held accountable via a "record" fine, inflated to appear far more meaningful than it actually is.

Filed Under: class action, credit monitoring, ftc, settlement
Companies: equifax

Much Of The Assault On 'Big Tech' Is Being Driven By 'Big Telecom'

from the inauthentic-outrage dept

Over the last few months, Google, Amazon, and Apple have all taken a significant beating on Wall Street amidst rumblings of looming antitrust investigations by the DOJ and FTC. Google, we're told, is subject of a looming antitrust probe by the DOJ. Amazon, we've learned, is facing growing scrutiny from the FTC. Apple stock also briefly did a nose dive on the news that it too may soon be subject to a significant new antitrust probe.

On its surface, many of these actions aren't all that surprising. After all, experts have noted for a decade than US antitrust enforcement has grown toothless and frail, and our definitions of monopoly power need updating in the Amazon era. Facebook's repeated face plants on privacy (and basic transparency and integrity) have only added fuel to the fire amidst calls to regulate "big tech."

But while Silicon Valley faces an endless cavalcade of outrage, the telecom sector is suddenly seeing no scrutiny whatsoever. Whether it's the speed at which the problematic T-Mobile merger is being shoveled through the DOJ and FCC or the blind eye being turned to major telecom privacy scandals (like location data), telecom lobbyists have been on a successful tear convincing well-heeled DC lawmakers to ignore the massive, obvious monopoly, privacy, and competition issues inherent in telecom to focus exclusively on the problems in "big tech."

Yet somehow, this asymmetrical policy paradigm is still treated as entirely coincidental in press coverage. Only recently have some news outlets started to notice how well things have been going for telecom lately in DC (Axios calls it telecom's "sweet summer of revenge"). Outlets have even started to finally realize that with former telecom lawyers now running the FCC and DOJ (Ajit Pai and Bill Barr), that is not coincidentally being reflected in federal policies attempting to hamstring telecom's competitors:

"In a June speech, DOJ Antitrust Division Chief Makan Delrahim laid out ways his agency could could go after Big Tech for anti-competitive behavior. In a June Senate hearing, FCC Chairman Ajit Pai said, “The greatest threat to a free and open internet has been the unregulated Silicon Valley tech giants that do, in fact, today decide what you see and what you don’t,” he said."

It's routinely understated how telecom lobbying, not a sincere worry about market power or privacy, is what's driving much of this current policy paradigm in DC (including much of the hyperventilation over nonexistent Censorship of Conservatives). The telecom sector is pushing hard into an online advertising sector traditionally dominated by Silicon Valley. As such, telecom lobbyists have spent several years now pushing to hamstring their direct competitors with the help of cash-compromised lawmakers and full blown regulatory capture.

That includes successfully convincing government that a sector filled with natural, historically-predatory monopolies should see no guard rails whatsoever (see the killing of net neutrality and the neutering of the FCC as example A). Yet somehow, there are still a lot of folks in tech policy circles who see the lopsided focus on "big tech" as entirely authentic, and any failure to police telecom as somehow coincidental. But folks in DC (like former FCC lawyer Gigi Sohn), are well aware that much of this current policy paradigm is highly-produced theater and, shockingly, all about money:

Again, none of this is to say that there aren't massive problems with Silicon Valley giants and plenty of authentic calls for reform. But it is a reminder that an oversized portion of the current anti big tech sentiment in DC is telecom driven. Intellectual inconsistency and campaign finance data usually makes it clear which lawmakers are telecom sector marionettes. More often than not consumer rights, market power, or healthy competition are the very last thing on the minds of those pushing lopsided regulatory solutions to a "big tech" problem they don't actually care all that much about.

Filed Under: antitrust, doj, ftc, internet, telecom
Companies: amazon, apple, at&t, comcast, facebook, google, verizon

FTC's Latest Fine Of YouTube Over COPPA Violations Shows That COPPA And Section 230 Are On A Collision Course

from the this-could-be-an-issue dept

As you probably heard, earlier this week, the FCC fined Google/YouTube for alleged COPPA violations in regards to how it collected data on kids. You can read the details of the complaint and proposed settlement (which still needs to be approved by a judge, but that's mostly a formality). For the most part, people responded to this in the same way that they responded to the FTC's big Facebook fine. Basically everyone hates it -- though for potentially different reasons. Most people hate it because they think it's a slap on the wrist, won't stop such practices and just isn't painful enough for YouTube to care. On the flip side, some people hate it because it will force YouTube to change its offerings for no good reason at all and in a manner that might actually lead to more privacy risks and less content for children.

They might all be right. As I wrote about the Facebook fine and other issues related to privacy, almost every attempt to regulate privacy tends to make things worse, in part, because people keep misunderstanding how privacy works. Also, most of the "complaints" about how this "isn't enough," are really not complaints directed at the FTC, but at Congress, because the FTC can only do so much under its current mandate.

Separately, since this fine focused on COPPA violations, I'll separately note that COPPA has always been a ridiculous law that makes no real sense -- beyond letting politicians and bureaucrats pretend they're "protecting the children" -- while really creating massive unintended consequences that do nothing to protect children or privacy, and do quite a bit to make the internet a worse place.

But... I'm not even going to rehash all of that today. Feel free to dig into the past links yourselves. What's interesting to me is something specific to this settlement, as noted by former FCC and Senate staffer (and current Princeton professor), Jonathan Mayer: the FTC, in this decision, appears to have significantly changed its interpretation of COPPA, and done so in a manner that is going to set up something of a clash with Section 230. What happened is a little bit subtle, so it requires some background.

The key feature of COPPA -- and the one you're probably aware of whether or not you know it -- is that it has specific rules if a site is targeting children under the age of 13. This is why tons of sites say that you need to be over 13 to use them (including us) -- in an attempt to avoid dealing with many of the more insane parts of COPPA compliance. Of course, in practice, this just means that many people lie. Indeed, as danah boyd famously wrote nearly a decade ago, COPPA seems to be training parents to help their kids lie online -- which is kinda dumb.

Of course, the key point under COPPA is not actually the "under 13" users, but rather whether or not a website or online service is "directed to children under 13 years of age." Indeed, in talking about it with various lawyers, we've been told that most sites (including our own) shouldn't even worry about COPPA because it's obvious that such sites aren't "directed to children" as a whole and therefore even if a few kids sneak in, they still wouldn't be violating COPPA. In other words, the way the world has mostly interpreted COPPA is that it's not about how whether any particular piece or pieces of content are aimed at children -- but whether the larger site itself is aimed at children.

This new FTC settlement agreement changes that.

Basically, the FTC has decided that, under COPPA, it no longer needs to view the service as a whole, but can divide it up into discrete chunks, and determine if any of those chunks are targeted at kids. To be fair, this is well within the law. The text of COPPA clearly says in definitional section (10)(A)(ii) that "a website or online service directed to children" includes "that portion of a commercial website or online service that is targeted to children." It's just that, historically, most of the focus has been on the overall website -- or something that is more distinctly a "portion" rather than an individual user's channel.

Except, that under the law, it seems that it should be the channel operator who is held liable for violations of COPPA under that channel, rather than the larger platform. In fact, back in 2013, the last time the FTC announced rules around COPPA it appears to have explicitly stated, that it would apply COPPA to the specific content provider who was directed at children and not at the general platform they used. This text is directly from that FTC rule, which went through years of public review and comment before being agreed upon:

... the Commission never intended the language describing ‘‘on whose behalf’’ to encompass platforms, such as Google Play or the App Store, when such stores merely offer the public access to someone else’s child-directed content. In these instances, the Commission meant the language to cover only those entities that designed and controlled the content...

But that's not what the FTC is doing here. And so it appears that the FTC is changing the definition of things, but without the required comment and rulemaking process. Here, the FTC admits that channels are "operators" but then does a bit of a two-step to say that it's YouTube who is liable.

YouTube hosts numerous channels that are “directed to children” under the COPPA Rule. Pursuant to Section 312.2 of the COPPA Rule, the determination of whether a website or online service is directed to children depends on factors such as the subject matter, visual content, language, and use of animated characters or child-oriented activities and incentives. An assessment of these factors demonstrates that numerous channels on YouTube have content directed to children under the age of 13, including those described below in Paragraphs 29-40. Many of these channels self-identify as being for children as they specifically state, for example in the “About” section of their YouTube channel webpage or in communications with Defendants, that they are intended for children. In addition, many of the channels include other indicia of child-directed content, such as the use of animated characters and/or depictions of children playing with toys and engaging in other child-oriented activities. Moreover, Defendants’ automated system selected content from each of the channels described in Paragraphs 29-40 to appear in YouTube Kids, and in many cases, Defendants manually curated content from these channels to feature on the YouTube Kids home canvas.

Indeed, part of the evidence that the FTC relies on is the fact that YouTube "rates" certain channels for kids.

In addition to marketing YouTube as a top destination for kids, Defendants have a content rating system that categorizes content into age groups and includes categories for children under 13 years old. In order to align with content policies for advertising, Defendants rate all videos uploaded to YouTube, as well as the channels as a whole. Defendants assign each channel and video a rating of Y (generally intended for ages 0-7); G (intended for any age); PG (generally intended for ages 10+); Teen (generally intended for ages 13+); MA (generally intended for ages 16+); and X (generally intended for ages 18+). Defendants assign these ratings through both automated and manual review. Previously, Defendants also used a classification for certain videos shown on YouTube as “Made for Kids.”

That's a key point that the FTC uses to argue that YouTube knows that its site is "directed at" children. But here's the problem with that. Section 230 of the Communications Decency Act, specifically the often forgotten (or ignored) (c)(2) is explicit that no provider shall be held liable for any moderation actions, including "any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable." One way to do that is... through content labeling policies, such as those that YouTube used and described by the FTC.

So here, YouTube is being found partially liable because of its content ratings, which is being shown as evidence that it's covered by COPPA. But, CDA 230 makes it clear that there can't be any such liability from such a rating system.

This won't get challenged in court (here) since Google/YouTube have agreed to settle, but it certainly does present a big potential future battle. And, frankly, given the way that some courts have been willing to twist and bend CDA 230 lately, combined with the general "for the children!" rhetoric, I have very little confidence that CDA 230 would win.

Filed Under: cda 230, coppa, ftc, moderation, privacy, section 230
Companies: google, youtube

WSJ Rightly Attacks Senator Josh Hawley's 'Nannyish' Laws Regarding The Internet

from the good-to-see dept

Just days after publishing yet more anti-internet nonsense, the Wall Street Journal, at least, allowed Andy Kessler to publish an excellent opinion piece calling our Senator Josh Hawley's ridiculous "big government" approach to regulating internet companies.

Mr. Hawley’s new bill has all the worst instincts of the regulatory state—a disappointing achievement coming from a Republican. It would remove the autoplay feature from YouTube, end infinite scrolling on Twitter and Facebook feeds, limit scrolling time to three-minute sessions, set default limits on the use of platforms to 30 minutes a day, and outlaw Snapchat streaks (rewards for consecutive days of contact with friends) and most “gamification” (badges, rewards) for any online service. These diktats are the opposite of market freedom.

The bill’s final kicker is a proposed triennial Federal Trade Commission report to Congress describing how internet companies “interfere with free choices of individuals” by “exploiting human psychology and brain physiology.” In other words, Mr. Hawley wants to restrict freedom because it interferes with free choice. Or something like that. Cut to a video of Orwell rolling over in his grave (though it won’t autoplay). OK, to be fair, Skopos Labs gives the bill a measly 3% chance of being enacted. But that doesn’t make it any less . . . cuckoo.

Kessler's piece also calls out Hawley's laughable claim that there is no innovation at all in social media.

This antitech inclination hasn’t always defined Mr. Hawley’s persona. As attorney general he said, “American workers and American entrepreneurs can compete with anybody, anywhere if our government will stop making America a cost-prohibitive place to do business.” Hear, hear. When he won his Senate seat last year he ran mostly as a conventional conservative.

But even then he already had his enemies marked. His first Senate speech lamented the “cold and judgmental world of social media,” and things kind of went downhill from there.

Hawley, of course, has been grandstanding a lot lately about how the "cosmopolitan elite" are the problem. He conveniently leaves out the fact that he attended Stanford and Yale Law School, clerked for the Supreme Court, worked at a massive "cosmopolitan" law firm (based in DC and London), Hogan Lovells, and then became Attorney General for Missouri before becoming Senator. Hawley is about as "cosmopolitan" a Senator as you can find. But apparently, in grandstanding to what he seems to believe is a very, very gullible base, he wants to convince them that he's standing up to the "elites" and that the only innovation that matters is innovation that comes from "the Heartland" or some such nonsense. As Kessler notes, cynically, Hawley's act is all for show:

Whether that worry is real or not doesn’t matter; condemning tech is a form of pretend populism. Mr. Hawley is taking an Elizabeth Warren-esque “I have a plan for that” approach, which is more about grabbing headlines than actually passing laws.

Yet the claim that big tech companies don’t deliver innovation is false. We can stream TV shows on subways, enjoy same-day package delivery, have a lady in our phones help us to avoid traffic, sort photos automatically by date, location and faces, and get instant answers to any question in our kitchens from something that looks like a hockey puck. Yeah, but what have you done for me lately?

Kessler notes that Hawley's plans would completely destroy innovation online.

Mr. Hawley’s style of heavy-handed regulation is what killed Detroit, distracted phone companies, inflated health-care costs, and wrecked education. Don’t let it kneecap the internet. It won’t be long before the senator announces, “If you like your social media, you can keep your social media.”

Given the willingness of the WSJ to publish anti-internet nonsense of late, it's nice to see Kessler able to get at least something sensible through.

Filed Under: andy kessler, big government, ftc, josh hawley, regulations, republicans

The FTC's Settlement With Equifax Is Such A Joke, The FTC Is Now Begging You Not To Ask For A Cash Settlement

from the say-what-now dept

Last week there was a bit of news as the FTC released a proposed settlement between the FTC and Equifax over the data brokers' massive security breach that came to light nearly two years ago. We had already noted that the FTC's way of dealing with Equifax seemed particularly tone deaf, but it's getting worse. Much worse. As you may have heard, part of the "settlement" with Equifax is that you could sign up to get $125 from the company (or possibly more). It was either that or free credit monitoring. But, come on: everyone already has so many "free credit monitoring" services from previous breaches that this is a totally meaningless offer. It also costs nothing for Equifax.

So, over the past week or so a ton of (helpful) news sites have been posting explainers on how to get your $125. Except... apparently too many people signed up and now the FTC is helping Equifax by telling people not to ask for money from the company any more. First, the FTC literally deleted that option from its website:

Then, it posted a blog post and a statement both of which encourage people not to ask for money -- and arguing that the credit monitoring that no one needs is a "better deal."

The public response to the settlement has been overwhelming, and we’re delighted that millions of people have visited ftc.gov/Equifax and gone on to the settlement website’s claims form.

But there’s a downside to this unexpected number of claims. First, though, the good: all 147 million people can ask for and get free credit monitoring. There’s also the option for people who certify that they already have credit monitoring to claim up to $125 instead. But the pot of money that pays for that part of the settlement is $31 million. A large number of claims for cash instead of credit monitoring means only one thing: each person who takes the money option will wind up only getting a small amount of money. Nowhere near the $125 they could have gotten if there hadn’t been such an enormous number of claims filed.

So, if you haven’t submitted your claim yet, think about opting for the free credit monitoring instead. Frankly, the free credit monitoring is worth a lot more – the market value would be hundreds of dollars a year.

Of course, the proper response to this is for the FTC to recognize that a $31 million pot for settlements here was way too small. Remember, this is the same organization that was being criticized for "only" dinging Facebook for $5 billion for privacy violations that one could argue were significantly less egregious and damaging as Equifax's breach. The fact that the FTC thinks its job here is now to act as PR shop for Equifax, rather than to maybe go back to the drawing board is pretty telling.

As law professor James Grimmelmann notes, the response to all of this (anger, hatred) certainly suggests that the court should not approve this settlement:

This is pretty damning towards the FTC. If they built a settlement structure that only works if few of the people impacted claim it, then the settlement is objectively ridiculous. Either users who had their data leaked deserve $125 or they don't. The entire structure of setting up a $31 million pool, such that if the people impacted actually claim their money they get less of it, is just mindbogglingly pointless.

Filed Under: breach, cash, credit monitoring, fines, ftc, privacy
Companies: equifax