Ron Lanton 6/25/21 Ron Lanton 6/25/21

Connecticut Has Enacted New Law Legalizing Adult-Use Cannabis

According to Governor Ned Lamont’s press release, the Governor has enacted a new law that legalizes and regulates adult-use cannabis in Connecticut. “The legislation Governor Lamont signed today is Senate Bill 1201. A proposal to legalize adult-use cannabis was initially put forward by Governor Lamont to the General Assembly earlier this year as Senate Bill 888. He also proposed similar legislation in February 2020 as Senate Bill 16.”

Key components of the new law include:

Possession: Possession of cannabis among adults age 21 and over will be legal in Connecticut beginning July 1, 2021. Adults cannot have more than 1.5 ounces of cannabis on their person, and no more than 5 ounces in their homes or locked in their car, truck or glove box.

Retail sales: Retail sales of cannabis aim to begin in Connecticut by the end of 2022. The sale, manufacture, and cultivation of cannabis (aside from home grown) requires a license from the state. Products that contain delta-8-THC, delta-9-THC, or delta-10-THC are considered cannabis and may only be sold by licensed retailers. Individuals who are not licensed by the state may gift cannabis to others but may not sell it. Individuals may not gift cannabis to another individual who has “paid” or “donated” for another product.

Homegrown: Patients who are participating in Connecticut’s medical marijuana program will be permitted to cultivate up to six cannabis plants (three mature, three immature) indoors within their homes beginning October 1, 2021. All adults age 21 and over will be permitted to grow a similar number of plants indoors within their homes beginning July 1, 2023. The law includes requirements to keep the plants secure from anyone else. Home grown of up to six cannabis plants is defelonized beginning July 1, 2021, and instead will result in infractions.

Erases prior convictions: Certain cannabis-related convictions that occurred between January 1, 2000 and October 1, 2015 will be automatically erased. Those seeking to erase cannabis-related convictions outside of that period will require petitioning.

Equity and investments: To start the necessary work of repairing the damage caused by decades of failed cannabis criminalization policies, the law implements equitable marketplace requirements under which at least half of all initial licenses are reserved for social equity applicants, targeting those communities that have been most negatively impacted by the so-called war on drugs. The Social Equity Council, which is created by this legislation, will launch programs and support for social equity applicants in the cannabis market.

Tax structure: The law enacts a tax rate structure on the retail sale of cannabis that includes a new source of revenue for municipalities. This includes (1) a 3% municipal sales tax, which will be directed to the town or city where the retail sale occurred; (2) the 6.35% state sales tax; and (3) a tax based on the THC content of the product, which will be 2.75 cents per milligram of THC for cannabis edibles; 0.625 cents per milligram of THC for cannabis flower; and 0.9 cents per milligram of THC for all other product types. This means that Connecticut generally will have about a 4% lower tax rate than New York and about the same as Massachusetts.

Revenue to support economic opportunities in targeted communities: Portions of the revenue obtained from retail sales of cannabis will be directed to communities that have been most negatively impacted by the war on drugs through the creation of the Social Equity and Innovation Fund. Funding from this account will be appropriated for use by the Social Equity Council to provide business capital, technical assistance for business start-ups and operations, workforce education, and community investments. These investments will not be limited to the cannabis market.

Revenue to support substance misuse prevention and recovery services: Portions of the revenue obtained from retail sales of cannabis will be directed to support substance misuse prevention, treatment, and recovery services through the creation of the Prevention and Recovery Services Fund. Connecticut’s health agencies, including the Department of Public Health, Department of Mental Health and Addiction Services, and Department of Children and Families will launch new programs and initiatives regarding prevention, treatment, and recovery in regard to cannabis.

Preventing underage use: This legislation adapts the state’s strong framework regarding preventing access to alcohol by minors in the context of cannabis. For example, it will be a Class A misdemeanor to sell or provide cannabis to a person under 21 years old. In addition, an individual allowing someone under 21 years old to loiter at a cannabis store will receive a $1,000 fine on the first offense with subsequent offenses as a Class B misdemeanor. It will be a Class D misdemeanor for a person under the age of 21 to lie about their age or use a fake ID in an attempt to buy cannabis. Delivery services will be required to use online ID and age verification.

Enforcement of safe driving: This law significantly strengthens Connecticut’s impaired driving statutes by requiring police to be trained in Advanced Roadside Impaired Driving Enforcement (ARIDE) and allows for Drug Recognition Expert (DRE) evaluations to result in license suspensions. This means that drivers who are impaired on any substance, whether cannabis or otherwise, will be more quickly taken off the roads.

Advertising: This law implements strong standards for advertising that exceed those for the tobacco and alcohol industries. All cannabis-related advertising will be banned on television, radio, internet, print, and billboards unless the advertiser has reliable evidence that more than 90% of the audience reached by the advertising is at least 21 years of age or older. Advertising of cannabis is restricted within 500 feet of a school. The advertising restrictions apply to all cannabis advertising, whether or not the advertiser is a state licensee.

Safe products: This legislation imposes strong requirements for product safety. Products will have to be lab tested and will have strict packaging and labeling standards. Edible cannabis products are limited to 5 milligrams of THC per serving, and most other products are subject to a potency cap. Products will be in child-safe packaging, and product types that appeal to children are banned.

Municipalities and zoning: Local officials will play an important role in the implementation of cannabis legalization. For example, local officials can control the number and locations of cannabis retailers through zoning. Municipalities can also determine where smoked or vaped cannabis can be consumed (e.g. in city parks or beaches, or on sidewalks or streets).

Employment: This legislation allows employers to continue to enforce drug-free workplaces, and respects the need for employers to maintain workplace safety and to remain in compliance with federal laws and contracts. As such, employers in certain industries, such as manufacturing and healthcare, are considered “exempt” from the employment provisions of this law. The law allows employers to take adverse actions against employees who are impaired at work. The law says that nonexempt employers may not prohibit the off-work use of cannabis or take adverse action against an employee or a potential employee for a positive THC test unless such employer has adopted employment policies stipulating as such. Generally, an employer may not take adverse action against an employee or potential employee for use of cannabis prior to applying for or working at such employer.

Medical marijuana program: The law protects Connecticut’s nation-leading medical marijuana program in many ways. For example, producers and dispensaries that currently operate in the medical marijuana program may expand or convert their licenses for adult-use cannabis, but they must prioritize serving the medical program. Medical marijuana users will soon be able to purchase medical marijuana from any dispensary rather than simply the one to which they are assigned.

State parks and beaches: Cannabis use is prohibited in state parks, state beaches, and on state waters.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Specifically we have expertise in cannabis and CBD related issues.

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

U.S. Senate Passes the Innovation and Competition Act

Earlier this month the U.S. Senate passed a rare bi-partisan bill called the United States Innovation and Competition Act, which seeks to improve America's competitive edge by investing billions of dollars in scientific and technological innovations – including artificial intelligence, computer chips and robotics. The bill would boost funding for research and technology manufacturing to increase America's competitiveness, strengthen national security and grow the economy. The bill’s future is uncertain in the U.S. House of Representatives, where the House has a similar bill but it is unlikely that there will not be some kind of compromise between the House and Senate, especially where national security is concerned.

Lanton Law’s technology practice has been monitoring similar legislative and legal developments. If you are a technology or healthcare/life science stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

New Louisiana Law Bans White Bagging

The Governor has enacted Act No. 50 effective June 1, which seeks to ban “white bagging” in the state. White bagging is when a drug is delivered from an insurer’s preferred pharmacy to a physician’s office. This new law which is the first of its kind in the country provides that insurers cannot refuse to pay for physician-administered drugs to covered patients. Similar legislation has been seen in Massachusetts, New York and Texas.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

Protecting Rural Telehealth Access Act Introduced

Via a recently released a press release describing how a group of bipartisan Senators including Joe Manchin (D-WV), Joni Ernst (R-IA), Jeanne Shaheen (D-NH), and Jerry Moran (R-KS) have introduced the bipartisan Protecting Rural Telehealth Access Act to make current telehealth flexibilities permanent.

“This legislation would ensure rural and underserved community healthcare providers are able to continue offering telehealth services after the current public health emergency ends. These services include the ability to offer audio-only telehealth appointments because many rural Americans don’t have reliable, affordable broadband access.”

According to the press release the proposed Act would:

Allow payment-parity for audio-only health services for clinically appropriate appointments. During COVID-19, recognizing not everyone has access to the technology in their home, Congress made allowances for audio-only telephone services to be used to allow doctors to reach patients wherever they are.
Permanently waive the geographic restriction allowing patients to be treated from their homes. Pre-COVID-19, the home was allowed as an eligible originating site in Medicare and some Medicaid programs, but only for very specific services, and only for the patient, not the provider.
Permanently allow rural health clinics and Federally Qualified Health Centers to serve as distance sites for providing telehealth services.
Lift the restrictions on “store and forward” technologies for telehealth. Currently this is only allowed in Hawaii and Alaska.
Allows Critical Access Hospitals (CAHs) to directly bill for telehealth services.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life science and technology. Our telepharmacy practice has been helping pharmacies and physicians with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

White House Releases Report Outlining Steps to Strengthen Critical Supply Chains

In February 2021, President Biden issued an Executive Order to direct a government-wide “approach to assessing vulnerabilities in, and strengthening the resilience of, critical supply chains.”

The key findings highlight recommendations from its “comprehensive 100-day supply chain assessments for four critical products: semiconductor manufacturing and advanced packaging; large capacity batteries, like those for electric vehicles; critical minerals and materials; and pharmaceuticals and active pharmaceutical ingredients (APIs).”

Lanton Law has several years of experience with supply chain issues. Our firm is a national boutique regulatory law and lobbying firm that focuses on healthcare/life science and technology.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

Data Protection Agency (DPA) Legislation Reintroduced

U.S. Senator Gillibrand (D-NY) issued a press release announcing the Data Protection Act of 2021, which would create the DPA, an independent federal agency whose goal is to protect Americans’ data, instill privacy safeguards and work to ensure that there is transparency in data sharing practices.

There have been some changes to this proposed legislation since last year’s version of the bill. These changes include:

Supervision of Data Aggregators: Grants the DPA authority to review Big Tech mergers involving a large data aggregator, or any merger that proposes the transfer of personal data of 50,000 or more individuals.
Office of Civil Rights: Establishes the DPA Office of Civil Rights to advance data justice and protect individuals from discrimination.
Enforcement Powers: Improves DPA enforcement powers to oversee the use of high-risk data practices and to penalize, examine, and propose remedies to the social, ethical, and economic impacts of data collection.
Penalties and Fines: Prohibits data aggregators from committing any unlawful, unfair, deceptive, abusive, or discriminatory data practices; and allows for penalties and fines to be levied if violated, including triple penalties for violations against children.
Defines Key Terms for Transparency: Provides Key Definitions for Privacy Harm, Data Aggregators, and High-Risk Data Practice, among other key terms.

According to the release “The DPA would be an executive agency. The director would be appointed by the president and confirmed by the Senate, serves a 5-year term, and must have knowledge of technology, protection of personal data, civil rights, and law. The agency may investigate, subpoena for testimony or documents, and issue civil investigative demands. It may prescribe rules and issue orders and guidance as is necessary to carry out federal privacy laws. The authority of state agencies and state attorneys general are preserved in the Act. The DPA would have three core missions:

1. Give Americans control and protection over their own data by authorizing the DPA to create and enforce data protection rules.

2. Maintain the most innovative, successful tech sector in the world by ensuring fair competition within the digital marketplace.

3. Prepare the American government for the digital age.”

Lanton Law’s technology practice has been monitoring privacy developments nationwide. If you are a banking/finance, technology or healthcare/life science stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

House Lawmakers Release Anti-Monopoly Agenda for “A Stronger Online Economy: Opportunity, Innovation, Choice”

According to press release, the House Committee on the Judiciary’s Antitrust Subcommittee Chairman Cicilline (D-RI) and Ranking Member Buck (R-CO) announced their antitrust bi-partisan agenda outlined below:

“‘A Stronger Online Economy: Opportunity, Innovation, Choice’ consists of five bipartisan bills drafted by lawmakers on the Antitrust Subcommittee, which last year completed a 16-month investigation into the state of competition in the digital marketplace and the unregulated power wielded by Amazon, Apple, Facebook, and Google.”

The “American Innovation and Choice Online Act” to prohibit discriminatory conduct by dominant platforms, including a ban on self-preferencing and picking winners and losers online. The bill is sponsored by Chairman Cicilline and co-sponsored by U.S. Rep. Lance Gooden (TX-05).

The “Platform Competition and Opportunity Act” prohibits acquisitions of competitive threats by dominant platforms, as well as acquisitions that expand or entrench the market power of online platforms. The bill is sponsored by U.S. Rep. Hakeem Jeffries (NY-08) and co-sponsored by Ranking Member Buck.

The “Ending Platform Monopolies Act” eliminates the ability of dominant platforms to leverage their control over multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition. The bill is sponsored by U.S. Rep. Pramila Jayapal (WA-07) and co-sponsored by U.S. Rep. Lance Gooden (TX-05).

The “Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act” promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements. This bill is sponsored by U.S. Rep. Mary Gay Scanlon (PA-05) and co-sponsored by U.S. Rep. Burgess Owens (UT-04).

The “Merger Filing Fee Modernization Act” updates filing fees for mergers for the first time in two decades to ensure that the Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. This bill is sponsored by U.S. Rep. Joe Neguse (CO-02) and co-sponsored by U.S. Rep. Victoria Spartz (IN-05).

Lanton Law has been monitoring both Congress and the FTC for our technology and healthcare clients, especially as both Congress and the FTC have taken a more aggressive tone on antitrust issues lately.

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions,contact us today.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

Lina Khan Sworn in as FTC Chair

The Federal Trade Commission (FTC) released a June 15th press release announcing Lina Khan as the Chair of the FTC, with her term expiring on September 25, 2024. Ms. Khan was confirmed by the U.S. Senate on June 15, 2021.

Lanton Law has been monitoring the FTC for our technology and healthcare clients. This move may signal that the Biden Administration and Congress may take on a more aggressive role in antitrust policy. Technology stakeholders should take note.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

New Proposed Congressional DIR Relief Bill

At Lanton Law we are constantly on the watch for issues impacting our specialty, retail and LTC pharmacy clients including the issue of DIR fees. Clients utilize our advocacy and legal tools while discussing business strategy to combat an ever changing reimbursement environment.

A bipartisan group of Congressional legislators have introduced the Pharmacy DIR Reform to Reduce Senior Drug Costs Act, also known as S. 1909/H.R. 3554. Both companion bills propose to transfer all pharmacy DIR to the point of sale. As many in the industry know, DIR fees were intended to be applied here but the definition and application of DIR fees have been so convoluted that they are causing deep and long lasting damage to the pharmacy community.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life science and technology. Our pharmacy practice has been helping pharmacies nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying section helps pharmacies nationwide achieve improved business climates through carefully crafted legislation.

Ron Lanton 6/7/21 Ron Lanton 6/7/21

Bipartisan Congressional Legislation Introduced Seeking Shared Savings Demo Project to Increase Biological/Biosimilar Medicare Access

U.S. Senators Cornyn (R-TX) and Bennet (D-CO) have introduced the Increasing Access to Biosimilars Act also known as S. 1427. The bill seeks to establish a demonstration project to increase access to biosimilar biological products under the Medicare program.

According to Senator Cornyn’s press release “this legislation would direct HHS to establish a shared savings demonstration project to increase access to biosimilars in the Medicare program. This would encourage physicians to prescribe less-expensive biosimilars increasing patient access to more affordable, life-saving drugs and lowering patient out-of-pocket costs.

Under the demonstration, Medicare would provide an additional payment to providers for using lower-cost biosimilar products that reflects the savings created in contrast to administering the higher-cost reference biological product. Additionally, Medicare can use a portion of those savings to reduce the beneficiary’s coinsurance payment.”

Ron Lanton 6/7/21 Ron Lanton 6/7/21

NCPA Files Lawsuit on Pharmacy Direct & Indirect Remuneration (DIR) Fees

The National Community Pharmacists Association (NCPA) has filed a lawsuit against the U.S. Department of Health & Human Services (HHS) on DIR fees. Specifically, the complaint seeking declaratory and injunctive relief seeks three things according to NCPA’s release:

The rule’s definition of “negotiated price” violates the plain language and intent of Congress when they passed legislation creating the Medicare Part D program.
The rule is invalid as arbitrary and capricious. In 2014 CMS said that the “reasonably determined” exception leading to DIR fees would be “narrow,” but comment letters showed that not to be the case.3 A recent study showed that pharmacy DIR fees have increased 1600% since 2015, with $4 billion in DIR fees being squeezed from pharmacies in 2017 alone.
The Final Rule Was Not Adopted Through Proper Notice-and-Comment Rulemaking. The proposed rule defined negotiated prices to include all price concessions from pharmacies and did not discuss or address any exceptions. In the final rule, without giving interested parties notice or the opportunity to comment, CMS created the exception for price concessions that could not be reasonably determined at the point of sale.

HHS did file a motion to dismiss available here.

Lanton Law will continue to monitor the developments of this important case.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life science and technology. Our pharmacy practice has been helping pharmacies nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying entity (Lanton Strategies) is helping pharmacies nationwide achieve improved business climates through carefully crafted legislation.

Ron Lanton 6/2/21 Ron Lanton 6/2/21

Biden Administration Files Motion Supporting Canadian Drug Imports

The Biden Administration has filed a motion in federal district court for the District of Columbia. The motion seeks to dismiss a lawsuit that aims to prevent prescription drug imports from Canada.

The Biden Administration has filed a motion in federal district court for the District of Columbia. The motion seeks to dismiss a lawsuit that aims to prevent prescription drug imports from Canada. This motion is aimed at prior enacted state legislation from both Florida and New Mexico, as both states have commenced the process of applying for Canadian imports. The Administration argues in its brief that the party opponent’s (Pharmaceutical Research & Manufacturers of America PhRMA) claim is not prudentially ripe.

Importation is an issue that Lanton Law has been monitoring for several years. As the drug pricing debate continues across Congress and state legislatures, we fully anticipate importation to continue to be a front and center policy issue.

Ron Lanton 6/2/21 Ron Lanton 6/2/21

Update on FTC Administrative Complaint Against Illumina

Lanton Law has been monitoring the developments around the FTC’s administrative complaint against Illumina on marketplace competition concerns. We have recently shared an industry blog about this issue.

As an update to this matter, the FTC has issued a press release that explained the agency’s Motion to Dismiss for Preliminary Relief in Illumina/GRAIL Case. According to the FTC, “In the wake of the European Commission’s announcement that it is investigating Illumina’s $7.1 billion proposed acquisition of DNA sequencing provider Illumina, the Federal Trade Commission has authorized staff to dismiss its federal court complaint for Preliminary Injunction and Temporary Restraining Order.”

Additionally, ““The FTC sought preliminary relief in federal court to prevent Illumina and GRAIL from merging while the case is being decided on the merits in administrative court. At the time, a district court order was necessary to prevent the parties from consummating their merger. The administrative trial is scheduled to begin on August 24, 2021. Now that the European Commission is investigating, Illumina and GRAIL cannot implement the transaction without obtaining clearance from the European Commission.”

Ron Lanton 5/21/21 Ron Lanton 5/21/21

New Bi-Partisan Privacy Bill Introduced

The Social Media Privacy Protection and Consumer Rights Act of 2021 has been reintroduced and is being led by Senators Kennedy (R-LA), Klobuchar (D-MN), Manchin (D-WV and Burr (R-NC). The proposal seeks to improve the transparency of online platforms, strengthen consumers’ options when a data breach occurs and ensure companies comply with privacy policies that protect consumers.

According to the bill’s press release the proposal seeks the following:

Give consumers the right to opt out and keep their information private by disabling data tracking and collection,
Provide users greater access to and control over their data,
Require terms of service agreements to be in plain language,
Ensure users have the ability to see what information about them has already been collected and shared,
Mandate that users be notified of a breach of their information within 72 hours,
Offer remedies for users when a breach occurs, and
Require that online platforms have a privacy program in place.

Lanton Law’s technology practice has been monitoring privacy developments nationwide. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 5/14/21 Ron Lanton 5/14/21

New Executive Order on Cybersecurity Released in Response to Ransomware Attack

In the wake of the Colonial Pipeline attack, President Biden has signed the Executive Order on Improving the Nation's Cybersecurity.

In the wake of the Colonial Pipeline attack, President Biden has signed the Executive Order on Improving the Nation's Cybersecurity. The EO has a number of provisions including:

Establishes a “Cybersecurity Safety Review Board” comprising public- and private-sector officials, which can convene after cyber attacks to analyze the situation and make recommendations.
Requires IT service providers to tell the government about cybersecurity breaches that could impact U.S. networks, and removes certain contractual barriers that might stop providers from flagging breaches.
Plans for enhancing software supply chain security

This comes amid an increase in cyber attacks on private healthcare and technology companies as well as the federal government.

Ransomware attacks are becoming a bigger threat and being prepared from a compliance and risk management standpoint is becoming more crucial. Having appropriate cyber policies in place is one step. We have other solutions.

Lanton Law is a national boutique law and lobbying firm that focuses on technology and healthcare. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 5/4/21 Ron Lanton 5/4/21

Florida Proposed Privacy Bill Fails

H.B. 969 titled Consumer Data Privacy has failed to become the nation’s third comprehensive consumer privacy law.

H.B. 969 titled Consumer Data Privacy has failed to become the nation’s third comprehensive consumer privacy law. The legislature adjourned without reaching a legislature agreement between the House and Senate as the Senate voted 29-11 to send the bill back to the House. The main controversy around this bill not being able to advance is centered on whether a consumer should have a private right of action to sue a company for an alleged violation.

Ron Lanton 4/28/21 Ron Lanton 4/28/21

Tech Stakeholders Alert: FTC Workshop on Dark Patterns

The Federal Trade Commission (FTC) has announced an April 29, 2021 virtual workshop to examine digital “dark patterns,” a term that has been used to describe a range of potentially manipulative user interface designs used on websites and mobile apps.

The Federal Trade Commission (FTC) announced an April 29, 2021 virtual workshop to examine digital “dark patterns,” a term that has been used to describe a range of potentially manipulative user interface designs used on websites and mobile apps.

“Bringing Dark Patterns to Light: An FTC Workshop” will explore the ways in which user interfaces can have the effect, intentionally or unintentionally, of obscuring, subverting, or impairing consumer autonomy, decision-making, or choice. For example, some sites sneak extra items into a consumer’s online shopping cart, or require users to navigate a maze of screens and confusing questions to avoid being charged for unwanted products or services.

Some of the topics the workshop will examine include:

how dark patterns differ from sales tactics employed by brick-and-mortar stores;
how they affect consumer behavior, including potential harms;
whether some groups of consumers are unfairly targeted or are especially vulnerable;
what laws, rules, and norms regulate the use of dark patterns; and
whether additional rules, standards, or enforcement efforts are needed to protect consumers.

The FTC will be seeking public comment on the following topics with a deadline to submit comments by May 29, 2021.

Defining dark patterns
Prevalence of dark patterns
Factors affecting dark pattern adoption
Dark patterns and machine learning
Effectiveness of dark patterns
Harms of dark patterns
Consumer perception of dark patterns
Market constraints and self-regulation
Solutions

Dark pattern policy discussion has increased over the last few months. If you are a technology stakeholder, it is a discussion to take note of.

Lanton Law is a national boutique law and lobbying firm that focuses on fintech, technology and healthcare. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 4/23/21 Ron Lanton 4/23/21

U.S. Supreme Court Limits the FTC’s Ability to Obtain Restitution for Deceptive Practices

On April 22, 2021, Justice Breyer wrote the majority opinion for AMG CAPITAL MANAGEMENT, LLC, ET AL. v. FEDERAL TRADE COMMISSION, which was a shock to many consumer advocates where the Court ruled unanimously against the Federal Trade Commission (FTC).

According to the case, the Federal Trade Commission filed a complaint against Scott Tucker and his companies alleging deceptive payday lending practices in violation of §5(a) of the Federal Trade Commission Act. The District Court granted the Commission’s request pursuant to §13(b) of the Act for a permanent injunction to prevent Tucker from committing future violations of the Act, and relied on the same authority to direct Tucker to pay $1.27 billion in restitution and disgorgement. On appeal, the Ninth Circuit rejected Tucker’s argument that §13(b) does not authorize the award of equitable monetary relief.

The Court held that “Section 13(b) does not authorize the Commission to seek, or a court to award, equitable monetary relief such as restitution or disgorgement.” Congress is set to address this issue soon as it looks to reaffirm the agency’s power to provide consumer relief.

FTC Acting Chairwoman Rebecca Kelly Slaughter released a statement about the case where she stated:

“In AMG Capital, the Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior,” Acting Chairwoman Rebecca Kelly Slaughter said. “With this ruling, the Court has deprived the FTC of the strongest tool we had to help consumers when they need it most. We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.”

Over the past four decades, the Commission has relied on Section 13(b) of the Federal Trade Commission Act to secure billions of dollars in relief for consumers in a wide variety of cases, including telemarketing fraud, anticompetitive pharmaceutical practices, data security and privacy, scams that target seniors and veterans, and deceptive business practices, among many others. More recently, in the wake of the pandemic, the FTC has used Section 13(b) to take action against entities operating COVID-related scams. Section 13(b) enforcement cases have resulted in the return of billions of dollars to consumers targeted by a wide variety of illegal scams and anticompetitive practices, including $11.2 billion in refunds to consumers during just the past five years.

Lanton Law is a national boutique law and lobbying firm that focuses on highly regulated industries such as technology, fintech, healthcare and clean energy. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 4/22/21 Ron Lanton 4/22/21

New Congressional Bi-Partisan Privacy Proposal Introduced

A new bi-partisan privacy bill has been introduced by Senators Wyden (D-OR) and Paul (R-KY) titled “The Fourth Amendment is Not For Sale Act.” The bill proposes to close a legal loophole and prevent law enforcement and intelligence agencies from obtaining subscriber or customer records in exchange for anything of value, and to address communications and records in the possession of intermediary internet service providers. Currently, this information can be bought and sold without judicial oversight.

According to the press release, some highlights of the proposal include:

Requires the government to get a court order to compel data brokers to disclose data — the same kind of court order needed to compel data from tech and phone companies.
Stops law enforcement and intelligence agencies buying data on people in the U.S. and about Americans abroad, if the data was obtained from a user’s account or device, or via deception, hacking, violations of a contract, privacy policy, or terms of service. As such, this bill prevents the government buying data from Clearview.AI.
Extends existing privacy laws to infrastructure firms that own data cables & cell towers.
Closes loopholes that would permit the intelligence community to buy or otherwise acquire metadata about Americans’ international calls, texts and emails to family and friends abroad, without any FISA Court review.
Ensures that intelligence agencies acquiring data on Americans do so within the framework of the Foreign Intelligence Surveillance Act and that when acquiring Americans’ location data, web browsing records and search history, intelligence agencies obtain probable cause orders. This language is similar to language that was in the 2020 Wyden-Daines amendment to legislation to reform Section 215.
Takes away the Attorney General’s authority to grant civil immunity to providers and other third parties for assistance with surveillance not required or permitted by statute. Providers retain immunity for surveillance assistance ordered by a court.

Ron Lanton 4/22/21 Ron Lanton 4/22/21

House Approves Legislation for Digital Asset Working Group

The Eliminate Barriers to Innovation Act otherwise known as H.R. 1602, sponsored by Rep. McHenry (R-NC) proposes to direct the Commodity Futures Trading Commission and the Securities and Exchange Commission to jointly establish a working group on digital assets.

Some of the bill’s highlights include directing the working group to:

Make an analysis of the legal and regulatory framework and related developments in the United States relating to digital assets
Recommend for the creation, maintenance, and improvement of primary and secondary markets in digital assets, including for improving the fairness, orderliness, integrity, efficiency, transparency, availability, and efficacy of such markets;
Make best practice recommendations to reduce fraud and manipulation of digital assets in cash, leveraged, and derivatives markets

If you are a fintech or technology stakeholder who has an interest in digital assets, planning for regulatory oversight should be a part of your business strategy.