Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
FTC Proposes New Business Opportunity Rule
On April 12, 2006, the Federal Trade Commission ('FTC') published in the Federal Register (Business Opportunity Rule 71 Fed. Reg. 19054 (proposed April 12, 2006) (to be codified at 16 CFR Part 437)) a Notice of Proposed Rulemaking for the FTC's long-awaited business opportunity rule ('Bus Opp Rule'). The Bus Opp Rule will cover business opportunity sellers who now are covered by the FTC's franchise trade regulation rule ('Franchise Rule'), as well as sellers of certain business opportunities who are not now covered by the Franchise Rule. The FTC has long believed that the same regulation was not the best way to regulate both business opportunity sellers and franchisors. More specifically, the FTC has concluded that each group's special characteristics (such as history of consumer protection problems, sophistication of its target purchasers, required investment commitment, and complexity of business system) required a different regulatory approach. The Bus Opp Rule is designed to create a regulatory scheme to focus on the special characteristics of business opportunities. Until the Bus Opp Rule is promulgated, business opportunity sellers must continue to comply with the current and, if and when adopted, amended Franchise Rule.
A review of the FTC enforcement history and consumer complaints reveals that business opportunities have been a significantly greater problem for consumers than franchises. In addition, several types of business opportunities are not covered by the existing business opportunity definition contained in the Franchise Rule. To cite some statistics, the FTC has initiated 1) 40 Franchise Rule cases against business opportunities covered by the Franchise Rule since 1990; and 2) 15 'sweeps' of business opportunity sellers (including businesses covered and not covered by the Franchise Rule) in conjunction with other federal and state law enforcement agencies. Moreover, with respect to certain types of businesses not currently covered by the Franchise Rule but which the FTC would cover in its proposed Bus Opp Rule, the FTC has 1) brought 60 enforcement actions against 'work-at-home' businesses (such as envelope stuffing and craft assembly programs) since 1990, has received 37,333 consumer complaints against work-at-home businesses from January 1997 through December 2005, and estimates that consumers have lost more than $15 million in purchasing fraudulent work-at-home businesses; and 2) brought 20 enforcement actions against 'pyramid' schemes since 1990 and received 17,858 consumer complaints during the period January 1997 through December 2005 in which consumers have alleged to have sustained more than $46 million in losses.
New York's Latest Cybersecurity Commitment
On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office
A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.
Bit Parts
Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.