Election News

Businesses Have the Mic at the NAAG Consumer Protection Seminar

Consumer protection staff from State Attorney General offices around the country are in Washington, D.C., this week to attend the National Association of Attorneys General (NAAG) 2016 Spring Consumer Protection Seminar. This twice-a-year seminar provides government officials and staff an opportunity to share information and coordinate on enforcement activities. Yesterday included three sessions open to the public: AG civil investigations, fantasy sports, and on-line ticket sales. These sessions offered private sector representatives the opportunity to provide helpful information to the AG offices and engage in a constructive dialogue on these issues.

During the first session on investigations, in-house and outside counsel for private companies discussed recurring issues in investigations.  There was an emphasis on the importance of open lines of communication between the investigating AG office and the company.  The company representatives set the stage by explaining the desire to engage in a dialogue about a concern before a subpoena is served.  Once a subpoena is served, the panelists stated, the focus can shift away from the substance to the deadlines and burden of responding to the subpoena. The panelists also explained that there is a realistic expectation that the AG office will provide necessary context for its inquiry, explain its position, and share information.  Doing so both assists internal company communication and the delivery of requested information to the AG office.  Finally, there was a discussion regarding the various reasons companies are interested in confidentiality agreements, including the desire for clarity on exemptions for commercially sensitive business information, to protect consumer and customer data, and to provide adequate protections if the requesting AG office shares the produced information with other AG offices.

The second session provided a primer on fantasy sports.  The consumer popularity was discussed, with an estimated 50 million Americans participating each year.  The audience was walked through the skill needed - the information gathering and analysis – for a fantasy sports player, whether season-long or daily, to compete. It was stated that because fantasy sports is a game of skill, it is not gambling, and this has been confirmed by Congress’ exemption of fantasy sports from the Unlawful Internet Gambling Enforcement Act of 2006 and six states enacting laws to exempt fantasy sports from the state’s definition of gambling (Indiana, Kansas, Maryland, Mississippi, Tennessee, and Virginia).  On the other hand, some states consider fantasy sports play within their state borders prohibited, and there was discussion of the technology that the fantasy sports platforms use to exclude those state residents from play in accordance with the current legal interpretation.  A representative of the American Gaming Association stated its position on the need for “legal clarity” for this relatively new consumer product.

The final session was another primer, this time on on-line ticket sales.  Representatives of Ticketmaster and StubHub explained the ticket buying experiences on their respective websites.  These companies both stated they strive to offer, in both the primary and resale market, a transparent and trustworthy platform for ticket sales.  They both discussed the substantial efforts they undertake to battle “bots” – software tools that so-called scalpers use to buy tickets before they can get purchased by individual consumers who wish to attend the events.  The companies urged support for anti-bot legislation.

The next Consumer Protection Seminar will be held October 3-5, 2016, in Phoenix, Arizona.