[Federal Register Volume 84, Number 68 (Tuesday, April 9, 2019)]
[Notices]
[Pages 14115-14117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06956]
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FEDERAL TRADE COMMISSION
[File No. 172 3028]
UrthBox, Inc. and Behnam Behrouzi; Analysis of Proposed Consent
Order To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis of Proposed Consent Order to Aid
Public Comment describes both the allegations in the draft complaint
and the terms of the consent order--embodied in the consent agreement--
that would settle these allegations.
DATES: Comments must be received on or before May 9, 2019.
ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write: ``Urthbox, Inc.'' on
your comment, and file your comment online at https://www.regulations.gov by following the instructions on the web-based
form. If you prefer to file your comment on paper, mail your comment to
the following address: Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D),
Washington, DC 20580, or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC
20024.
FOR FURTHER INFORMATION CONTACT: Kerry O'Brien (415-848-5100), Western
Region, Federal Trade Commission, 901 Market Street, Suite 570, San
Francisco, California 94103.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis of Proposed Consent Order to Aid Public Comment
describes the terms of the consent agreement and the allegations in the
complaint. An electronic copy of the full text of the consent agreement
package can be obtained from the FTC Home Page (for April 3, 2019), on
the World Wide Web, at https://www.ftc.gov/news-events/commission-actions.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before May 9, 2019.
Write ``Urthbox, Inc.; File No. 1723028'' on your comment. Your
comment--including your name and your state--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the https://www.regulations.gov website.
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online through the https://www.regulations.gov website.
If you prefer to file your comment on paper, write ``Urthbox, Inc.;
File No. 1723028'' on your comment and on the envelope, and mail your
comment to the following address: Federal Trade Commission, Office of
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D),
Washington, DC 20580; or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC
20024. If possible, submit your paper comment to the Commission by
courier or overnight service.
Because your comment will be placed on the publicly accessible FTC
website at https://www.regulations.gov, you are solely responsible for
making sure that your comment does not include any sensitive or
confidential information. In particular, your comment should not
include any sensitive personal information, such as your or anyone
else's Social Security number; date of birth; driver's license number
or other state identification number, or foreign country equivalent;
passport number; financial account number; or credit or debit card
number. You are also solely responsible for making sure that your
comment does not include any sensitive health information, such as
medical records or other individually identifiable health information.
In addition, your comment should not include any ``trade secret or any
commercial or financial information which . . . is privileged or
confidential''--as provided by Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including in
particular competitively sensitive information such as costs, sales
statistics, inventories, formulas, patterns, devices, manufacturing
processes, or customer names.
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Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on the public FTC website--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from the FTC website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at http://www.ftc.gov to read this Notice and
the news release describing it. The FTC Act and other laws that the
Commission administers permit the collection of public comments to
consider and use in this proceeding, as appropriate. The Commission
will consider all timely and responsive public comments that it
receives on or before May 9, 2019. For information on the Commission's
privacy policy, including routine uses permitted by the Privacy Act,
see https://www.ftc.gov/site-information/privacy-policy.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an agreement containing a consent order as to
UrthBox, Inc. (``UrthBox'') and Benham Behrouzi (``respondents'').
The proposed consent order (``order'') has been placed on the
public record for 30 days for receipt of comments by interested
persons. Comments received during this period will become part of the
public record. After 30 days, the Commission will again review the
order and the comments received, and will decide whether it should
withdraw the order or make it final.
This matter involves respondents' endorsement and marketing
practices relating to UrthBox's snack box subscription service. UrthBox
has offered consumers monthly subscriptions (one-, three-, and six-
month subscriptions) to receive its snack boxes. Urthbox has required
its customer to pre-pay the entire cost of the subscription term.
The complaint alleges that respondents violated Section 5(a) of the
FTC Act by misrepresenting that positive customer reviews of UrthBox
and its snack boxes on the Better Business Bureau's website and other
third-party websites reflected the independent experiences or opinions
of impartial customers, and by deceptively failing to disclose that
some of those customers received compensation, including free snack
boxes, to post those positive reviews. The complaint also alleges that
respondents violated Section 5(a) of the FTC Act and Section 4 of the
Restore Online Shoppers Confidence Act (``ROSCA'') by failing to
adequately disclose key terms of its ``free'' snack box offer to
prospective customers. Specifically, when the free trial period
expired, UrthBox would automatically enroll consumers in a six-month
subscription plan and would charge them the total amount owed for six
months of shipments of snack boxes. The complaint also alleges that
respondents violated ROSCA by failing to obtain consumers' express
informed consent prior to charging them for that ongoing subscription.
The order includes injunctive relief that prohibits these alleged
violations and fences in similar and related conduct.
Part I prohibits misrepresenting an endorser of any good or service
is an independent user or ordinary consumer of the good or service.
Part II prohibits respondents from making misrepresentations in
connection with the marketing or sale of any good or service with a
negative option feature. The order defines the term ``Negative Option
Feature.''
Part III prohibits any representation about any consumer, reviewer,
or other endorser of any good or service without disclosing, clearly
and conspicuously, and in close proximity to that representation, any
unexpected material connection between such endorser and (1) any
respondent, (2) any other individual or entity affiliated with the good
or service, or (3) the good or service. The order defines the terms
``Clearly and Conspicuously'' and ``Unexpected Material Connection.''
Part IV requires respondents to take all reasonable steps to remove
any demonstration, review, or endorsement, by any endorser with a
material connection to any respondent, of any good or service currently
viewable by the public that does not comply with Provisions I and III.
Part V requires respondents, when they use endorsers to advertise
or sell a good or service, to take certain steps to make sure the
endorsements comply with Parts I and III of the order. Such steps
include clearly notifying endorsers of their representation and
disclosure responsibilities and creating a monitoring system to review
endorsements and disclosures.
Part VI requires respondents to make certain disclosures when they
market or sell any good or service with a negative option feature.
Part VII prohibits respondents from using billing information to
obtain payment for a good or service with a negative option feature
without first obtaining the consumer's express informed consent to do
so. The order describes the steps respondents must take to obtain that
expressed informed consent and also defines the term ``Billing
Information.''
Part VIII requires respondents to provide consumers with a simple
mechanism to avoid charges for a good or service with a negative option
feature. The order describes what constitutes a simple mechanism,
including that such mechanism must not be difficult, costly, confusing,
or time consuming, and must be at least as simple as the mechanism the
consumer used to initiate the charge.
Parts IX and X require the corporate respondent, UrthBox, Inc., to
pay $100,000 to the Commission, which the Commission will use to
administer a fund for relief, including consumer redress unless direct
redress to consumers is impracticable.
Part XI requires respondents to provide customer information to the
Commission so that it may efficiently administer consumer redress.
Parts XII to XVI are reporting and compliance provisions. Part XII
requires respondents to distribute the order to certain persons and
submit signed acknowledgments of order receipt. Part XIII requires
respondents to file compliance reports with the Commission, and to
notify the Commission of bankruptcy filings or changes in corporate
structure that might affect compliance obligations. Part XIV contains
recordkeeping requirements for personnel records, advertising and
marketing materials, and all records necessary to demonstrate
compliance with the order. Part XV contains other requirements related
to the Commission's monitoring of the respondents' order compliance.
Part XVI provides the effective dates of the order, including that,
with exceptions, the order will terminate in 20 years.
The purpose of this analysis is to facilitate public comment on the
order, and it is not intended to constitute an official interpretation
of the complaint
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or order, or to modify the order's terms in any way.
By direction of the Commission.
April J. Tabor,
Acting Secretary.
[FR Doc. 2019-06956 Filed 4-8-19; 8:45 am]
BILLING CODE 6750-01-P