Federal Trade Commission and Consumer Protection Devesh R. Raval U.S. Federal Trade Commission Mexico City March 15, 2016 The views expressed herein are those of the speaker and do not necessarily represent the views of the Federal Trade Commission or any individual Commissioner

Consumer Protection Competition Mission: Protect Consumers

Research Mandate –Regularly conduct economic studies Data Broker report Patent Assertion Entity study Independent Bureau of Economics

Consumer Protection Prevent Deceptive and Unfair Practices Advertising Marketing Fraud Privacy and Data Security

Case Study: Premium SMS Market Receive Text Messages on your mobile Charge to your mobile phone bill Market Size: $2-3 billion in US at peak –$150-$200 million in California Voluntarily eliminated in late 2013

Market Structure Content Provider Aggregator Carrier

Mobile Cramming Fraudulent charges on phone bill Inattentive Consumers don’t notice charges FTC action: –First sued Content Providers –Then Carriers (AT&T and T-Mobile)

Why sue the carriers? Efficient to hold carrier responsible Receive the most information (complaints) Can easily monitor/terminate providers Crammers themselves are judgment proof

Evidence Against Carriers High refund rates (13-15% in California) –Much higher than comparable markets –Similar to those for “crammers” Evidence from carrier reforms Used data to estimate degree of fraud

FTC, FCC, States Joint Settlements With AT&T and T-Mobile Monetary provisions –Consumer Refunds (FTC) –Civil Penalties (FCC, States) Order for Third Party Charges –Provide Purchase notifications –Obtain Express Informed Consent –Provide Information on Charge Blocks