Amazon/MGM Deal to Be Reviewed by Federal Trade Commission

Amazon’s $8.45 billion acquisition of Metro-Goldwyn-Mayer Studio, including the lucrative “James Bond” movie franchise, will reportedly be reviewed by the Federal Trade Commission and its just-confirmed chair Lina Khan.

Per policy, mega corporate mergers are scrutinized by federal antitrust divisions within either the Justice Department or the FTC. The latter reportedly sought review of the Amazon/MGM deal as part of a separate antitrust investigation of Amazon, according to The Wall Street Journal, which cited sources familiar with the situation.

The FTC has made no official announcement.

Prior to becoming chair of the FTC, Khan, 32, was an associate professor of Law at Columbia Law School. She also previously served as counsel to the U.S. House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law, legal adviser to FTC Commissioner Rohit Chopra, and legal director at the Open Markets Institute.

More importantly, Khan, who was born in London, has reportedly been a longtime critic of what she characterizes as lax antitrust enforcement within the technology market, especially among giants such as Facebook, Google and Amazon.

“Lina has been very clear-eyed in recognizing that the core questions have to do with power, with the ability of private entities to coerce and to bully,” Stacy Mitchell, co-director of the advocacy group Institute for Local Self-Reliance, told The Journal in May.

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How the Amazon/MGM merger might negatively affect consumers remains an unknown. The two companies do not deal with entities vital to consumers such as telecommunications or pay-TV — two issues former President Trump’s DOJ cited in their failed legal objections to AT&T’s acquisition of Time Warner.

In fact, the Amazon/MGM asset merger deals largely with the acquisition of catalog movies, TV shows and franchise rights — not the type of commodities that typically invite much regulatory concern. But with Amazon’s massive fiscal resources — founder/chairman Jeff Bezos is the world’s richest person — and forays into different markets worldwide, the ecommerce behemoth’s moves are apparently garnering increased scrutiny.

FTC Fines Google $170 Million for Profiting on YouTube Children’s Videos

Google and its subsidiary YouTube will pay a record $170 million to settle allegations by the Federal Trade Commission and the New York Attorney General that YouTube illegally collected personal information from children without their parents’ consent.

The settlement requires Google and YouTube to pay $136 million to the FTC and $34 million to New York for allegedly violating the Children’s Online Privacy Protection Act (COPPA) Rule.

The $136 million penalty is by far the largest amount the FTC has ever obtained in a COPPA case since Congress enacted the law in 1998.

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In a complaint filed against the companies, the FTC and New York Attorney General alleged that YouTube violated the COPPA Rule by collecting personal information — in the form of persistent identifiers that are used to track users across the Internet — from viewers of child-directed video channels, without first notifying parents and getting their consent.

YouTube, according to the FTC, earned millions of dollars by using the identifiers, commonly known as cookies, to deliver targeted ads to viewers of these channels, according to the complaint.

The COPPA Rule requires that child-directed websites and online services provide notice of their information practices and obtain parental consent prior to collecting personal information from children under 13, including the use of persistent identifiers to track a user’s Internet browsing habits for targeted advertising.

In addition, third parties, such as advertising networks, are also subject to COPPA where they have actual knowledge they are collecting personal information directly from users of child-directed websites and online services.

“YouTube touted its popularity with children to prospective corporate clients,” FTC Chairman Joe Simons said in a statement. “Yet when it came to complying with COPPA, the company refused to acknowledge that portions of its platform were clearly directed to kids. There’s no excuse for YouTube’s violations of the law.”

The YouTube platform allows Google account holders, including large commercial entities, to create “channels” to display their content.

According to the complaint, eligible channel owners can choose to monetize their channel by allowing YouTube to serve behaviorally targeted advertisements, which generates revenue for both the channel owners and YouTube.

In the complaint, the FTC and New York Attorney General alleged that while YouTube claimed to be a general-audience site, some of YouTube’s individual channels—such as those operated by toy companies—are child-directed and therefore must comply with COPPA.

The complaint notes that the defendants knew that the YouTube platform had numerous child-directed channels. YouTube marketed itself as a top destination for kids in presentations to the makers of popular children’s products and brands.

The FTC said Google and YouTube told Mattel, maker of Barbie and Monster High toys, that “YouTube is today’s leader in reaching children age 6-11 against top TV channels” and told Hasbro, which makes My Little Pony and Play-Doh, that YouTube is the “#1 website regularly visited by kids.”

Several channel owners told YouTube and Google that their channels’ content was directed to children, and in other instances YouTube’s own content rating system identified content as directed to children.

In addition, according to the complaint, YouTube manually reviewed children’s content from its YouTube platform to feature in its YouTube Kids app. Despite this knowledge of channels directed to children on the YouTube platform, YouTube served targeted advertisements on these channels.

According to the complaint, it even told one advertising company that it did not have users younger than 13 on its platform and therefore channels on its platform did not need to comply with COPPA.

In addition to the monetary penalty, the proposed settlement requires Google and YouTube to develop, implement, and maintain a system that permits channel owners to identify their child-directed content on the YouTube platform so that YouTube can ensure it is complying with COPPA.

In addition, the companies must notify channel owners that their child-directed content may be subject to the COPPA Rule’s obligations and provide annual training about complying with COPPA for employees who deal with YouTube channel owners.

The settlement also prohibits Google and YouTube from violating the COPPA Rule, and requires them to provide notice about their data collection practices and obtain verifiable parental consent before collecting personal information from children.

 

FTC Issues Netflix Phishing Scam Alert

The Federal Trade Commission has issued an alert to Netflix subscribers about an online phishing scam that attempts to extract personal information from unsuspecting subs, among other issues.

Phishing is when someone uses fake emails or texts to get users to share valuable personal information — such as account numbers, Social Security numbers, login IDs and passwords.

The FTC said scammers can use the personal information to steal money, identity, or both. They also use phishing emails to get access to an unsuspecting user’s computer or network. Clicking on a link can install ransomwareor other programs that can lock users out of their data.

Indeed, scammers often use familiar company names or pretend to be someone consumers know. Police in Ohio shared a Netflix screenshot of a phishing email designed to steal personal information. The email claims the user’s account is on hold because Netflix is “having some trouble with your current billing information” and invites the user to click on a link to update their payment method.

The FTC warns Netflix subs that If they have concerns about an email from the service, they should contact the company directly.

While some phishing emails look completely legit, bad grammar and spelling typically underscore phishing. Other clues include misspelled names, or you don’t even have an account with the company. In the Netflix example, the scammer used the British spelling of “center” (Centre) and used the greeting, “Hi Dear.” Listing only an international phone number for a U.S.-based company is also suspicious.

Netflix said subscribers unsure about emails from the service can access additional information at Netflix.com/security as well as contacting the customer service.

“We take the security of our members’ accounts seriously and Netflix employs numerous proactive measures to detect fraudulent activity to keep the Netflix service and our members’ accounts secure,” a rep said in a statement. “Unfortunately, scams are common on the internet and target popular brands such as Netflix and other companies with large customer bases to lure users into giving out personal information.”

The FTC said consumers concerned about possible phishing should forward the emails to spam@uce.gov (an address used by the FTC) and to reportphishing@apwg.org (an address used by the Anti-Phishing Working Group, which includes ISPs, security vendors, financial institutions, and law enforcement agencies). You can also report phishing to the FTC at ftc.gov/complaint. Also, let the company or person that was impersonated know about the phishing scheme. For Netflix, forward the message to phishing@netflix.com.