On September 15, 2022, the Federal Trade Commission (FTC) held an  open Commission meeting  that covered three agenda items: 1) a  rulemaking  on impersonation scams, 2) a  policy statement  on enforcement related to gig work, and 3) a  staff report  on dark patterns. While items (1) and (3) moved forward with a bipartisan 5-0 vote, the policy statement on the gig economy was adopted with a 3-2 vote along party lines. This alert provides some insight into the implications for future FTC activity in these areas.

Notice of Proposed Rulemaking on Impersonation Scams

During the meeting, the FTC voted 5-0 to issue a notice of proposed rulemaking codifying the established principle that impersonation scams violate the FTC Act. The proposed rule would also allow the FTC to recover money from, or seek civil penalties against, scammers who impersonate businesses or governments.

Analysis/Takeaways:  This proposed rulemaking is not particularly controversial. Although some have  expressed  skepticism about the FTC’s exercise of its so-called Magnuson-Moss rulemaking authority in other contexts, there appears to be bipartisan support for using it for this type of narrow issue. This stands in sharp contrast to the disagreements surrounding the FTC’s other recent  proposed rulemaking  on privacy, which moved forward on a 3-2 vote, asked for public comment in 95 areas affecting the entire economy, and generated  concerns  about the FTC potentially exceeding its statutory authority.

Policy Statement on Enforcement Related to Gig Work

The FTC set forth multiple areas for enforcement priority with respect to the gig economy:

Commissioners Noah Phillips and Christine Wilson dissented. Both commissioners suggested that the FTC should focus its activities on enforcement efforts, rather than policy statements. Commissioner Wilson expressed concern that the FTC was overstepping its mission by addressing worker harms, as opposed to consumer harms.

Analysis/Takeaways:  The discussions at the meeting confirmed what has been clear to FTC watchers: competition, consumer protection, and privacy issues in the gig economy will continue to be a major focus for Chair Lina Khan’s agenda.

Staff Report on Dark Patterns

The FTC voted 5-0 to issue a staff report on dark patterns, stemming from an April 2021 FTC  workshop  on the same topic. The FTC defined dark patterns as “design practices that trick or manipulate users into making choices they would not otherwise have made and that may cause harm,” and stated that it would take enforcement action when companies use these patterns to deceive consumers. In its report, the FTC provided many examples of problematic dark patterns. Some examples are well grounded in the law and precedent, such as use of deceptive testimonials or endorsements, the formatting of advertisements to falsely appear to be independent journalism or other content, and the failure to inform consumers of recurring subscription charges or allow easy cancellation of subscriptions. But the FTC also highlights newer and more unexpected examples of dark patterns, such as the following: 

Analysis/Takeaways:  Although it is questionable whether the FTC would be able to prove that some of their specific examples rise to the level of deceptive or unfair practices, many of these examples mirror examples of dark patterns provided in the proposed California Privacy Protection Agency  Regulations  issued this summer. Given regulatory scrutiny of these issues, companies should review their consumer interfaces in light of these examples to make sure their practices will not catch the eye of these regulators. 

Wilson Sonsini Goodrich & Rosati routinely helps companies navigate complex privacy, data security, and consumer protection issues and respond to FTC and other regulatory investigations. For more information on privacy issues, please contact  Maneesha Mithal,  Lydia Parnes,  Roger Li, or another member of the firm’s  privacy and cybersecurity  practice. For more information on antitrust issues, please contact  Michelle Yost Hale, or another member of the firm’s  antitrust and competition  practice.