Federal Trade Commission Responses to Questions Regarding Electronic Commerce The Honorable Tom Bliley, Chairman, U.S. House Committee on Commerce 1. Over the past several years, the Internet has begun to demonstrate the potential for the development of electronic commerce. However, just as this marketplace has come into existence, criminals have also emerged to use the electronic marketplace as a new venue for fraudulent activities. Given the Commission's role as the nation's lead consumer protection agency, how does it view its role both in development and protection of the electronic marketplace? The Commission recognizes that we stand at a critical juncture in the development of electronic commerce. We view our role as one of continuing to foster the development of electronic commerce by acting to prevent fraud and deception, which otherwise may deter consumers from using the Internet to transact business. It is therefore crucial that the Commission address Internet fraud now, before it undermines consumer confidence and chokes off the impressive growth of the Internet and its potential for innovation. To combat Internet fraud, the Commission has developed a three pronged strategy that emphasizes targeted law enforcement action, education of new Internet entrepreneurs, and consumer education. These efforts have included forming new partnerships with private industry and other government agencies, and using new technologies to promote our goals. To date, the Commission has brought over 25 law enforcement actions against entities engaged in alleged deceptive or fraudulent practices using or involving the Internet. These enforcement actions were directed toward practices such as business opportunity scams, credit repair scams and pyramid schemes. In addition, the Commission has conducted a number of "Surf Days" aimed at detecting deceptive practices and providing information to new entrepreneurs who may unwittingly violate the law. On "Surf Days," Commission staff surf the Web to identify sites that make apparently deceptive claims. The staff then e-mails a warning message to the sites, explaining the law and suggesting that they visit the FTC's Web site for more information. These "Surf Days" serve important deterrent and educational purposes. The Commission has also developed a "Rules of the Road" business guide to help educate Internet entrepreneurs who may have no prior business or advertising experience. In addition, the agency has designed a continuing legal education course for lawyers who counsel new Internet businesses. To complement these efforts, we have reached out directly to Internet industry members to enlist their contacts and marketing expertise in educating new Internet entrepreneurs. The Commission's Web site, www.ftc.gov, makes advice, news releases, and other information instantly available to businesses as well as consumers.(1) Building on the success of the Commission's Web site, we have also taken the lead in developing, with sister agencies,(2) www.consumer.gov - a "one-stop shopping" site for federal information on a broad spectrum of consumer issues, ranging from auto recalls to drug safety and investor alerts. In addition, Internet companies and trade groups have partnered with us to circulate public service announcements over the Internet. These announcements provide links back to the Commission's Web site where consumers can find "Cybershopping" guides, "Safe Surfing" tips, and other Internet related information such as the newly-released publication, "Trouble @ the In-Box," offering advice about fraudulent e-mail solicitations. The Commission is using new technologies to reach and educate consumers using the Internet. For example, staff has posted "teaser" web sites that mimic fraudulent advertising sites, such as pyramid schemes or business opportunities. These "pseudo-sites" include many of the false promises and glowing testimonials that are found in a typical scheme. The final page of the "teaser" site, however, warns consumers that if they "responded to an ad like [this]," they could get scammed. It then advises how to avoid scams and provides a hyper-link back to www.ftc.gov where consumers can get more information.(3) In another use of new technology, Commission staff partnered with the North American Securities Administrators Association to hold an online chat with consumers on how to invest wisely in new business ventures or franchises. Recognizing that "[c]onsumer protection is most effective when businesses, government and consumer groups all play a role,"(4) the Commission continues its efforts to fight fraud and deception online in partnership with industry, consumer groups and other government agencies where appropriate. 2. What statutory authority is used by the Commission to regulate activities on the Internet and in electronic commerce? Section 5 of the FTC Act prohibits unfair or deceptive acts or practices in or affecting commerce. Furthermore, Section 12 of the FTC Act prohibits dissemination of false advertisements concerning food, drugs, devices, services, or cosmetics. With the exception of certain industries, these statutory provisions provide the Commission with law enforcement authority over virtually every sector in our economy.(5) Electronic commerce and commercial activities on the Internet fall within the scope of this statutory mandate. The Commission is presently using its authority under the FTC Act to bring administrative actions against unfair or deceptive online activities. These actions can result in the issuance of cease and desist orders.(6) In cases of fraud and other serious misconduct, the Commission uses its statutory authority to file suit in federal district court to obtain preliminary and permanent injunctive relief, redress for injured consumers, or disgorgement of ill-gotten gains.(7) The Commission also may seek the assistance of the Department of Justice in filing contempt proceedings against persons who violate court orders issued at the behest of the Commission, or in filing criminal actions in egregious fraud cases. 3. How many FTEs are dedicated to monitoring and enforcing fraudulent or anti-competitive behavior in electronic commerce? In fiscal year 1998, the Commission has dedicated a minimum of 66 FTEs to electronic commerce and Internet-related issues. The Bureau of Consumer Protection has dedicated 56 FTEs, or approximately 16% of its budget, to monitoring consumer protection concerns related to electronic commerce and bringing enforcement actions, as appropriate. The Bureau of Competition has dedicated 10 FTEs, or approximately 4.4% of its budget, to monitoring possible anticompetitive behavior involving computer related matters and bringing enforcement actions to assist consumers as they engage in electronic commerce.(8) 4. In fiscal year 1997, what portion of the agency's budget was dedicated to enforcement and regulation of electronic commerce? In fiscal year 1996? In fiscal year 1997, the Commission devoted a minimum of 42 FTEs to enforcement and regulation of electronic commerce issues, including the review of possible anticompetitive behavior in the computer and other high tech industries. The Bureau of Consumer Protection dedicated 35 FTEs to these issues, or approximately 11% of its budget, while the Bureau of Competition dedicated 7 FTEs to these concerns, or 3.2 % of its budget.(9) In fiscal year 1996, the Commission devoted a minimum of 22 FTEs to enforcement and regulation of electronic commerce issues. The Bureau of Consumer Protection devoted 14 FTEs to these issues, or approximately 4% of its budget, while the Bureau of Competition devoted 8 FTEs to these concerns, or approximately 3.7% of its budget.(10) 5. Please provide the Committee with a list and short description of all activities--regulatory, administrative, and judicial--undertaken by the Commission regarding fraud in electronic commerce since the beginning of fiscal year 1997. To deter and halt fraud and deception in Internet Commerce, the FTC's Bureau of Consumer Protection, in 1994, initiated an aggressive program of training, monitoring, consumer education and law enforcement. Since the beginning of fiscal year 1997, the FTC has done the following:
6. Has the Commission developed or announced specific standards used to evaluate behavior in the electronic marketplace for potential violations of Section 5 of the Federal Trade Commission Act? As stated previously, the prohibition in Section 5 against unfair or deceptive acts or practices gives the Commission broad authority over the advertising and marketing of products and services and other commercial activities online. The Commission exercises such authority carefully and judiciously. In many cases, the Commission follows the same standards used in evaluating conduct in traditional media, such as radio or television, to evaluate conduct in the electronic marketplace.(11) Interestingly, most of the Commission's Internet fraud enforcement actions have involved old-fashioned scams dressed up in high-tech garb. For example, scams such as pyramid schemes, where victims have little or no chance of receiving the promised profits, are unlawful whether victims are recruited by mail, by telephone, or on the Web.(12) Some fraudulent or deceptive activities, however, are unique to the Internet. For example, in FTC v. Audiotex Connection, Inc., CV-97-0726 (DRH) (E.D.N.Y., filed Feb. 13, 1997), the Commission took action to halt a scheme that allegedly "hijacked" consumers' computer modems by surreptitiously disconnecting them from their local Internet Service Provider (such as AOL) and reconnecting them to the Internet through an international modem connection that led to Moldovan phone charges. This resulted in very expensive international charges on consumers' phone bills. As technology evolves, we will continue to monitor Internet activities and address new forms of fraudulent behavior on a case by case basis. Thus far, however, the Commission's experience indicates its general standards for evaluating behavior on the Internet currently are working well. A number of the Commission's rules and guides apply to electronic commerce. For example, the Mail and Telephone Order Merchandise Rule, 16 CFR Part 435, applies to orders for merchandise using the telephone. The Rule defines the term "telephone" broadly, so that the Rule covers orders placed by facsimile or by computer through telephone modems. In addition, many of the Commission's rules and guides(13) apply to advertising representations in general, and therefore, the Commission believes that they apply to representations or commercial activities in any medium, including the Internet. In 1992, the Commission adopted a regulatory review plan to review each of its rules and guides at least once every 10 years. These periodic reviews give the Commission the opportunity to consider whether a rule or guide should be amended to reflect changes in technology.(14) In a broader context, Internet advertising and other technology developments can pose new issues for businesses in complying with section 5 and Commission rules and guides.(15) For example, Web sites can contain multiple screens, viewable in almost any order by consumers, and can be designed to display pop-up advertisements between user clicks. Such features present new opportunities and challenges for ensuring that material information, necessary to avoid making misleading claims, is clearly and conspicuously disclosed. Nonetheless, Commission precedent involving other media continues to be useful for Internet sellers seeking to evaluate the legal adequacy of their Internet disclosures. Moreover, as mentioned previously in response to Question 1, the Commission has developed business education tools to provide guidance to Internet marketers on basic advertising principles and relevant FTC rules and guides. [The continuation of this response contains non-public information. This information is included in a separate document.] Question 7. I understand that the Commission recently has been instrumental in a number of industry efforts to engage in self-regulatory activities regarding so-called "look-up" services. Please describe the Commission's role and the outcome. In response to growing public and Congressional concern, the Commission examined the availability of sensitive personal identifying information through computerized database services that are used to locate, identify, or verify the identity of individuals, often referred to as individual reference services or look-up services. The Commission's study of look-up services culminated in a report to Congress in December 1997. The report summarized what the Commission had learned about the individual reference services industry; examined the benefits, risks, and potential information controls associated with these services; assessed the viability of an industry self-regulatory proposal; and concluded with recommendations that address concerns left unresolved by the self-regulatory proposal. The Commission found that a vast amount of information about consumers is available to customers of individual reference services through the services' proprietary computer networks. Similarly, this information is increasingly available over the Internet. Gleaned from various public and proprietary sources, information available through the services ranges from purely identifying information, e.g., name and phone number, to much more extensive data, e.g., driving records, criminal and civil court records, property records, and licensing records. The Commission also learned that convenient access to this type of information confers a myriad of benefits on users of these services and on society. The look-up services enable law enforcement agencies to carry out their missions, parents to find missing children, journalists to report the news, and consumers to find lost relatives. At the same time, the increasing availability of this information poses various risks of harm to consumers' privacy and financial interests, including the possibility of increasing the incidence of identity theft. At a June 1997 workshop focusing on privacy issues, a group of industry members, the Individual Reference Services Group ("IRSG"), announced its intent to address concerns associated with its industry through self-regulation. Commission staff worked with this group to encourage it to adopt an effective self-regulatory program. In December 1997, 14 companies, a substantial majority of the individual reference service industry, agreed to abide by the "IRSG Principles," a set of principles that addresses the availability of information obtained through individual reference services. The IRSG Principles restrict access to certain information obtained from "non-public" sources contained in each signatory's database. This non-public information includes what is called "credit header" information, which is that portion of a credit report purchased from a credit reporting agency that contains an individual's name, address, aliases, Social Security number, current and prior addresses and telephone number. The restrictions vary according to the category of customer. Customers that have less restricted access to non-public information are subject to greater controls. It is noteworthy that the IRSG Principles prohibit distribution to the general public -- over the Internet or otherwise -- of certain non-public information, including Social Security number, mother's maiden name, and date of birth. In addition, consumers will be able to access the non-public information maintained about them in these services and to prevent the sharing (i.e., "opt out") of the non-public information distributed to the general public. The IRSG Principles show particular promise because they include a compliance assurance mechanism and are likely to influence virtually the entire individual reference services industry. First, signatories must undergo an annual compliance review by a professional third party such as an accounting firm, the results of which will be made public. Public examination of the results of compliance reviews and the possibility of liability under the FTC Act and similar state statutes should create an incentive for compliance by signatories. Second, signatories that are information suppliers (e.g., the three national credit reporting agencies) are prohibited from selling information to entities whose practices are inconsistent with the IRSG Principles. Therefore, non-signatories whose practices are inconsistent with the IRSG Principles likely will be unable to obtain non-public information easily for redissemination through their services. Thus, the IRSG Principles should substantially lessen the risk that information held by these services will be misused, and they should address consumers' concerns about the privacy of their non-public information. The Commission concluded that the IRSG Principles address many of the concerns associated with the increased availability of non-public information through individual reference services while preserving important benefits conferred by this industry. However, important issues related to individual reference services remain. For example, the IRSG Principles do not give consumers access to the "public information" (e.g., real estate, motor vehicle, and court records) maintained about them and disseminated by the look-up services. Accordingly, consumers will not be able to check for inaccuracies resulting from transcription or other errors occurring in the process of obtaining or compiling the public information by the look-up services. IRSG members have agreed to revisit this issue by June 1999, and to consider whether to conduct a study quantifying the extent of any such inaccuracies. The Commission has urged the IRSG to conduct an analysis to determine whether the frequency of inaccuracies and the harm associated with them are such that consumer access to public record information or other safeguards are in fact unnecessary. In its report to Congress, the Commission also encouraged public agencies to consider the potential consequences associated with the increasing accessibility of public records when formulating or reviewing their public records collection and dissemination practices. Finally, the Commission has acknowledged and encouraged the ongoing efforts of many privacy advocates, consumer groups, government agencies, and the IRSG to educate the public about information privacy issues. 8. To what extent have the antitrust laws been identified as a barrier to self-regulation of electronic commerce? Are changes needed in antitrust enforcement to promote self-regulation? As discussed above, self-regulation can offer several advantages over government regulation or legislation. It is often more prompt, flexible, and effective than government regulation. Self-regulation can bring the accumulated judgment and experience of an industry to bear on issues that are sometimes difficult for the government to define with bright line rules. In the past, antitrust concerns may have been perceived by some as a barrier to self-regulation. Nonetheless, we do not believe that view accurately reflects current antitrust realities. To the contrary, self-regulatory efforts that are serious, legitimate, and fair are not prohibited by the antitrust laws. Antitrust laws restrict self-regulation only where it used to disadvantage rivals or new forms of competition. The antitrust agencies have rarely challenged self-regulatory efforts, and then, only in those cases where it was clear that consumers would suffer from illegitimate self-regulation. The FTC staff has provided guidance on the issue raised by this question. For example, the Direct Marketing Association (DMA) last year sought to provide consumers with the ability to restrict unsolicited mail and telemarketing calls through use of "do not call" lists maintained by all DMA members. The DMA submitted a proposal to the FTC that would require all DMA members to maintain such a list and to notify consumers of the company's information practices (for example, that the company sometimes sells its customer lists to other firms) and to allow consumers to prevent the sale or disclosure of their personal information. In an advisory opinion, the FTC staff noted that the DMA's proposal was not vulnerable to antitrust challenge. In fact, the restriction improved the information available to consumers. Similar efforts to provide truthful information to consumers and to expand consumers' choices are likely to be found legal, as they would advance the purposes of both the antitrust and consumer protection laws. 9. The Internet and the electronic marketplace are, by their nature, global in scope. What kinds of challenges does the Commission face in protecting U.S. consumers from international threats? The globalization of the marketplace poses new and difficult challenges for consumer protection law enforcement. The Commission held hearings on this and related issues in 1995, followed by the issuance of a staff report, "Consumer Protection Policy in the New High-Tech, Global Marketplace." This report details the issues raised during those hearings, and has served as the blueprint for subsequent FTC efforts to combat cross-border, high-tech fraud. Cross-border consumer fraud has grown in the past several years as a result of more sophisticated and less expensive telecommunications technology. For example, Consumer Sentinel, the FTC-operated U.S./Canadian database on telemarketing fraud, shows complaints about telemarketers calling from the Province of Quebec to have overtaken complaints about telemarketers calling from Las Vegas, Nevada and several other U.S. cities typically associated with this type of fraud. Our work with Canadian federal, provincial and municipal law enforcement authorities and policy-makers has revealed obstacles to efficient, effective investigation and prosecution of these cross-border fraud artists. While we are concerned about the difficulties encountered in addressing the cross-border telemarketing fraud problem with Canada, we are reasonably confident that we will be able to develop procedures and strategies that can be applied to cross-border fraud involving other countries and technologies. Although we have seen relatively little in the way of Internet fraud coming into the United States from other countries, we expect this situation to change as electronic commerce becomes more common. Furthermore, we expect our experience in the telemarketing area will provide us with the necessary tools to address similar fraudulent activity on the Internet. Globalization gives fraud artists an apparent early advantage in thwarting law enforcement, but we are working cooperatively with other countries to meet this challenge. An additional obstacle to successful law enforcement in a global environment is that many firms operating on the Internet may be beyond the reach, at least practically if not legally, of the Federal Trade Commission because they are located in another country. As a result, the need for greater international cooperation and agreement is essential. This is necessitated, in part, due to the lack of widespread international recognition of civil judgments from other countries. Therefore, even if the Commission were to assert U.S. jurisdiction over a foreign firm, based on its contacts with this country, and obtain a judgment for consumer redress, the validity of that judgment could be challenged in the firm's home country, often frustrating any ability to collect redress for consumers. The Commission, however, is pleased with one recent example of international cooperation in the case of Internic Software, Inc., an Australian organization copying the official domain name registration services of Network Solutions. Network Solutions, a U.S. company, registers domain names (e.g., FTC.gov, Consumer.gov) through its InterNIC service at its web site: http://www.internic.net. The cost of registering a name is $100 for two years. Internic Software, the Australian-based organization, created a "copy cat" web site at http://www.internic.com, at which it offered to act as a broker for registering domain names at a charge of $250. Because Internic Software is located in Australia, a U.S. order against the company would not necessarily be enforceable. For this reason, FTC staff, in response to a complaint from Network Solutions, issued an advisory opinion letter concluding that consumers and businesses might be misled by Internic Software's copy cat site into believing that they were actually registering with the official site operated by Network Solutions. FTC staff referred the matter to the Australian Competition and Consumer Commission, which is now investigating Internic Software for possible violations of the Australian Trade Practices Act. 10. Does the Commission believe that it has sufficient statutory authority to carry out its current mission in the electronic marketplace? Are new regulatory tools necessary? The Commission's statutory authority under Sections 5 and 13 of the FTC Act gives it broad authority to halt deception and fraud and to obtain appropriate remedies. As described in our response to Question 5, the Commission has used its existing authority to deal effectively with a variety of fraudulent schemes operating on the Internet. Some electronic commerce, however, is telephone rather than Internet-based, and the vendor or provider of commercial services is a telephone "common carrier." Because of statutory limitations, the Commission has traditionally not attempted to assert jurisdiction over common carriers.(16) Given the numerous changes occasioned by the growth of electronic commerce and emerging technologies, it may be useful for the Committee to consider possible changes regarding these issues in the future. 11. A concern on the part of both consumers and businesses is the degree to which businesses will be able to use marketing data captured from a consumer's use of the Internet. Consumers are concerned that marketers will unfairly use information from a consumer's usage patterns, while businesses are concerned that regulations may impede their ability to engage in legitimate target marketing activities. a. To what extent are Internet marketers able to generate target marketing information that they would not otherwise be able to generate from more traditional methods? Internet marketers have a unique ability to gather information about consumers as they surf the Internet. This information can be used to individually tailor each person's Web experiences as well as for future target marketing. Clickstream information, i.e., the sequence and identity of Web pages an individual has visited, at what time, and for how long, can be gathered. This is the equivalent of being able to determine that someone visited a bookstore and which books he or she browsed, even if a purchase was not made. This information can be used to display new publications in areas the consumer has visited, and potentially even to send E-mail to that consumer alerting him or her of new arrivals. There is not yet consensus among consumers as to whether they find this service beneficial or intrusive. b. How does the Commission's § 5 "unfairness" analysis apply to electronic marketing efforts? What kinds of Internet target marketing activities would the Commission scrutinize as possibly being "unfair?" An act or practice is unfair under Section 5 if it causes, or is likely to cause, substantial injury to consumers that is not reasonably avoidable and is not outweighed by countervailing benefits to consumers or competition.(17) While the Commission has not yet considered electronic marketing cases where the application of the unfairness doctrine might be appropriate, on July 15, 1997, the Commission staff issued an opinion letter in response to a petition from the Center for Media Education requesting the Commission to take action against a Web site directed to children. The letter describes potential unfair practices in connection with the online collection of information from children. In sum, it indicates the staff's view that, under certain circumstances, it may be an unfair practice in violation of Section 5 to collect personally identifiable information from children and sell or otherwise disclose that information to third parties without providing parents with appropriate notice and an opportunity to control the collection and use of the information. The letter explains that one such circumstance would be the release of personally identifiable information to third parties in a way that created a risk of injury or exploitation of the children so identified.(18) Thus, in the view of Commission staff, the release of children's personally identifiable information online, without providing parents with adequate notice and an opportunity to control the information, may result in sufficient injury or risk of injury to meet the Section 5 unfairness standard. With regard to Web sites targeted to adults, the Commission could assert its jurisdiction under a deception theory where the Web site misrepresents the purpose for which it is collecting an adult's personally identifiable information. For example, if a Web site posts a "Privacy Policy" on its home page stating that personally identifiable information provided by visitors to the site will not be disclosed to third parties without the consent of the consumer, and such a disclosure is made without the consumer's consent, such conduct would be actionable under Section 5. c. I understand that a major concern has been Internet target marketing activities directed at children. How is the Commission looking to address these problems? The FTC has traditionally viewed children as a special population and believes that it has a significant role to play in protecting children from advertising and marketing practices that are deceptive or unfair. As media change, the FTC's role changes also. We are finding that the Internet has changed the way marketers can deal with children, raising some important questions for the FTC, marketers and parents. The FTC has taken a number of steps to address concerns about marketing to children on the Internet and to encourage the development of self-regulatory responses to these concerns, including:
Endnotes 1. The Commission receives approximately 60,000 to 75,000 "hits," or access requests, per day on this home page. 2. A total of 10 federal agencies are now participating in the www.consumer.gov site - including the Securities and Exchange Commission, the U.S. Consumer Product Safety Commission, the Food and Drug Administration, the National Highway Traffic Safety Administration, Environmental Protection Agency, the Department of Agriculture, the Treasury Department, the Federal Communications Commission, and the Federal Deposit Insurance Corp. 3. The Commission's staff has registered each "teaser" site with major search engines and indexing services on the Internet. Thus, consumers may encounter the site when they are perhaps most receptive, just when they may be about to become ensnared in a fraud by responding to a plausible but deceptive come-on. Private online service companies have worked with the Commission's staff to highlight various teaser pages and have billed some as the "new" or "cool" site of the week. 4. Bureau of Consumer Protection, Federal Trade Commission, Anticipating the 21st Century: Consumer Protection in the New High-Tech, Global Marketplace, iii (May 1996). This report summarizes public hearings held by the Commission to explore business and consumer issues arising from technological innovation and increasing globalization. Over 200 company executives, business representatives, legal scholars, consumer advocates, and state and federal officials presented testimony. 5. Certain entities, such as banks, savings and loan associations, and common carriers, as well as the business of insurance are wholly or partially exempt from Commission jurisdiction. See Section 5(a)(2) of the FTC Act, 15 U.S.C. § 45(a)(2) and the McCarran-Ferguson Act, 15 U.S.C. § 1012(b). 6. 15 U.S.C. § 45. In addition, the Commission may request the Attorney General to file an action in the appropriate federal district court seeking civil penalties for violations of the Commission's administrative orders or trade regulation rules, and may file those actions on its own behalf if the Department of Justice declines to do so in the name of the United States. 15 U.S.C. § 56. 7. 15 U.S.C. § 53(b). 8. These estimates do not include a minimum of 3 FTEs that the agency anticipates devoting to cable industry competition issues, which also affect consumers' ability to engage in electronic commerce. 9. These numbers do not include the approximately 20 FTEs that the agency devoted to cable industry competition issues. This number reflects agency resources devoted to the investigation and resolution of a highly contested merger of Time-Warner and Turner Broadcasting, Inc., involving a number of industries, including telecommunications, cable, and entertainment. 10. These numbers do not include the approximately 2.5 FTEs that the agency devoted to cable industry competition issues. 11. The Commission has issued policy statements to provide guidance on how it evaluates whether acts or practices are unfair or deceptive under Section 5. Federal Trade Commission Policy Statement on Deception, appended to Cliffdale Associates, Inc. 103 F.T.C. 110, 174 (1984); Federal Trade Commission Policy Statement on Unfairness, appended to International Harvester Co., 104 F.T.C. 949, 1070 (1984). 12. See, e.g., FTC v. Fortuna Alliance, Civ. No. C96-799M (W.D. Wash., filed May 23, 1996) (alleged misrepresentations on Web sites on the Internet that for a $250 payment, consumers would receive profits of over $5,000 per month). In Global World Media Corp. and Sean Shayan, Docket No. C-3760 (consent order, Oct. 9, 1997), the alleged misleading claims about health products were made in television, radio, print and Internet advertising. Other examples of old-fashioned scams now being perpetrated on the Internet, and the subject of FTC action, include credit repair scams, business opportunity scams and the non-delivery of ordered merchandise. 13. Commission rules prohibit specific unfair or deceptive acts or practices. The Commission's guides are administrative interpretations of the laws administered by the Commission and are designed to assist the public in complying with the law. 14. See, e.g., Rule Review Pursuant to the 900-Number Rule and Request for Comment Regarding Possible Modification of Definition of "Pay-Per-Call Services" Pursuant to the Telecommunications Act of 1996, 62 FR 11750 (March 12, 1997). 15. The Commission's recent "Rules of the Road" business guide for Internet sellers describes a seller's responsibility to ensure that representations are truthful and substantiated. In addition, it describes those Commission rules and guides most pertinent to activities and representations likely to be made online. 16. "Common carriers" are statutorily excepted from the Federal Trade Commission's jurisdiction. See, fn. 5, infra. 17. 15 U.S.C. § 45 (n). 18. Of greatest concern would be uses of information that create the possibility of access by child predators. According to the FBI, commercial online services and the Internet provide the opportunity for pedophiles and other sexual predators to meet and converse with children, and that this contact often takes place through "chat rooms." Statement of Stephen R. Wiley, Chief, Violent Crime and Major Offenders Section, FBI, Before the House Judiciary Committee, Subcommittee on Crime (November 7, 1997). The FBI has investigated more than 70 cases involving pedophiles traveling interstate to meet undercover agents or officers posing as juveniles for the purpose of engaging in an illicit sexual relationship. Id. |