Digest 10.15.2020: Twitter Dinged on Political Advertising | California’s Mini-CFPB | Hospital System Settles Data Breach


FTC Orders Divestment of Gas Stations to Avoid Harming Competition in Local Markets

  • The Federal Trade Commission (“FTC”) issued an order requiring energy company Arko Holdings Ltd. and its subsidiaries (collectively “Arko”) to divest certain assets after determining that its proposed acquisition of Empire Petroleum Partners, LLC (“Empire”) would harm competition and violate the FTC Act and the Clayton Act.
  • The complaint alleged that Arko and Empire both own and operate gas stations in several local markets and that Arko’s proposed acquisition would reduce the number of market participants and harm competition for retail sales of gasoline and diesel in these geographic regions.
  • Under the terms of the order, Arco and Empire are required to divest Empire’s retail fuel assets to an independent competitor in each of the local markets impacted by Arco’s acquisition no later than 20 days after the acquisition is final.

 Campaign Finance

Twitter Allegedly Violated Washington’s Laws on Political Advertising Disclosures

  • Washington AG Bob Ferguson reached a settlement with Twitter, Inc. to resolve allegations that it failed to maintain appropriate records of political advertising revenues in violation of Washington’s campaign disclosure laws.
  • The complaint alleged that Twitter received over $194,000 for political advertising on its platform but failed to disclose records that it is required to disclose under Washington’s Public Disclosure Commission rules for digital political advertisers. These records include the name of the candidate, the name and address of the person sponsoring the advertising, the total cost of the advertising, and the method of payment used, among other things.
  • Under the terms of the stipulation and agreed judgment, Twitter will pay $100,000 to the state.

 Consumer Financial Protection Bureau

Nissan Settles Allegations of Wrongful Collections and Repossession Practices

  • The Consumer Financial Protection Bureau (“CFPB”) reached a settlement with Nissan Motor Acceptance Corporation (“Nissan”) to resolve allegations that it used illegal collections and repossession practices in violation of the Dodd–Frank Wall Street Reform and Consumer Protection Act.
  • According to the consent order, Nissan allegedly repossessed consumers’ vehicles from consumers who either had made payments on the vehicle or otherwise made efforts to stop repossession, and also deprived consumers paying by phone of the option to select a cheaper alternative to the $7.95 pay-by-phone fee and included language in its modified agreements and written confirmations that left consumers with the misimpression that they could not file for bankruptcy. Furthermore, Nissan allegedly allowed its repossession agents to charge an upfront storage fee for personal belongings found in repossessed cars.
  • Under the terms of the consent order, Nissan is required to refund fees and credit any outstanding charges stemming from improper repossessions, pay consumers redress for each day it wrongfully held the car, and pay a civil penalty of $4 million. In addition, Nissan is required to correct its repossession practices, clearly disclose any fees associated with different methods of payment, and prohibit its agents from charging fees for storing personal belongings post-repossession.

 Consumer Protection

Michigan Sues Online Wine & Beer Merchants For Selling Alcohol Without a Michigan License

  • Michigan AG Dana Nessel sued two online wine and beer retailers, Go to Gifts, Inc., d/b/a The BroBasket, and Vintner’s Collective LLC, over allegations that they shipped wine and beer to Michigan consumers in violation of the Michigan Consumer Protection Act.
  • The complaints against Go to Gifts and Vintner’s Collective allege that each shipped alcoholic beverages to consumers in Michigan despite not having a license to sell alcoholic beverages pursuant to the Michigan Liquor Control Code and in contravention to a cease and desist letter sent by the AG’s office.
  • Each of the complaints seeks injunctive relief, civil penalties, and attorneys’ fees and costs.

 Data Privacy & Security

AGs Settle with Hacked Hospital System

  • A group of 28 AGs, led by Tennessee AG Herbert Slatery III, reached a settlement with national hospital system Community Health Systems Inc. and its subsidiary (collectively “CHS”) to resolve allegations that CHS failed to protect the sensitive and health-related data of millions of consumers in a 2014 cyberattack in violation of the states’ respective consumer protection laws.
  • According to the Tennessee complaint, the allegations stem from CHS’s disclosure that hackers used malware to access its systems and steal sensitive personal and health-related patient information.
  • Under the terms of the settlement, CHS will pay $5 million to the settling states and will fortify its data security by, among other things, developing a written incident response plan, adding security and privacy training for all personnel with access to sensitive information, limiting access to sensitive information to those employees who need it for their work, and implementing more robust data security policies and procedures regarding its business associates.

 Financial Industry

California Creates a State Version of the CFPB

  • California’s Department of Business Oversight has been renamed the California Department of Financial Protection and Innovation (“DFPI”) and will have expanded regulatory and enforcement powers over providers of financial products and services, including credit reporting bureaus and credit repair agencies.
  • Under the new California Consumer Financial Protection Law (“CCFPL”), effective January 21, 2021, the DFPI will have authority similar to the authority granted to the CFPB under the Dodd-Frank Wall Street Reform and Consumer Protection Act, including the authority to bring civil actions or other enforcement actions against unfair, deceptive or abusive acts and practices, the promulgation of rules applicable to financial products and services, rules governing redress of consumer complaints, and reporting requirements for providers of financial products and services, among other things.
  • According to the DFPI, under the CCFPL, the DFPI will also include a new Division of Consumer Financial Protection, which will be responsible for market monitoring, research on emerging financial products, and expanded consumer outreach to vulnerable populations such as students and senior citizens.