with Aaron Schaffer

The Federal Trade Commission is under pressure to crack down on a network of “pandemic profiteers,” who are allegedly using deceptive tactics to peddle products making health and wellness claims, events and subscriptions. 

This “network of savvy affiliate marketers” -- which includes many of the most high-profile spreaders of vaccine disinformation -- has allegedly engaged in multiple potential violations of consumer welfare law, according to a June memo submitted to the agency by former Democratic FTC commissioner Terrell McSweeny, which was viewed by The Technology 202. The memo outlines several ways the network members participated in alleged deceptive advertising or made unsubstantiated claims about the effect products could have on autism or cancer -- highlighting the financial motivations behind repeat spreaders of health disinformation. 

“Unfortunately, as the Federal Trade Commission and other consumer protection enforcers have noted, the pandemic has created an environment in which fraudsters have flourished by exploiting people’s natural concerns over their health and well-being,” McSweeny wrote in the memo. 

Connecticut attorney general William Tong, who also viewed the memo, is now calling on the FTC to look into the network. His office is also looking into the memo, as well as the spread of coronavirus disinformation. 

“We really need the FTC to engage strongly on this,” he said in an interview. “This is a national issue, and it's happening across state lines on social media platforms that know no borders.” 

McSweeny told me in an interview that the tactics she uncovered are part of “the fraudsters’ playbook.” 

“It's a very old-school style of fleecing people,” she told me in an interview, explaining that profiting without disclosures or using deceptive practices are ”pretty conventional consumer protection issues." 

She says the FTC can play a role in cracking down on coronavirus disinformation by focusing on potential violations of consumer protection law, where people might be profiting without proper disclosures. 

"Consumer protection enforcers have a pathway to assist in policing the disinformation to the extent that there are consumer protection violations, typical fraudster playbook kinds of things occurring around them," she said in an interview.

The FTC declined to comment on the memo. The agency recently moved to streamline investigations in certain critical areas, including harms related to the pandemic. That could potentially result in fewer delays or bureaucratic hurdles if the agency were to look into the matter. 

McSweeny’s memo identifies multiple instances where these individuals didn’t disclose their apparent financial connections to products or events they were promoting. 

That potentially violates FTC requirements for online influencers. 

In one example from the memo, Sherri Tenpenny, a Cleveland-based doctor who has falsely claimed that vaccines leave people “magnetized,” promoted the Health Freedom Summit with no disclosure. Yet organizers said that “a 50 percent commission on every purchase made with your unique link.”

Similarly, Erin Elizabeth, who is also known for spreading anti-vaccine content on social media, did not disclose an affiliate contract when promoting a series of videos from The Truth about Cancer, according to the memo. Yet The Truth About Cancer included her on a leaderboard of top marketers, the memo said. That list also included other prominent spreaders of baseless claims about vaccines, including Robert F. Kennedy Jr. 

In other instances, these same individuals made unsubstantiated claims about health and wellness benefits of their products. The FTC requires marketers to have a reasonable basis for advertising claims. 

Tenpenny did not immediately respond to requests for comment on the memo’s findings. Reza Sina, who represents Elizabeth, said the accusations were "false." "We look forward to defending all of the baseless accusations before any forum," Sina said in an email.

The allegations are coming to light amid the Biden administration’s most high-profile efforts to date on medical misinformation. 

Just yesterday, U.S. surgeon general Vivek Murthy issued an advisory, calling misinformation "a serious threat to public health.” In remarks at the White House, he pointed the finger at social media companies, as I reported yesterday with my colleague Felicia Sonmez. 

“They’ve allowed people who intentionally spread misinformation — what we call disinformation — to have extraordinary reach,” Murthy said of tech companies. 

The White House in that briefing also homed in on the so-called “disinformation dozen,” which includes Tenpenny, Elizabeth and Kennedy. The Center for Countering Digital Hate, which studies online misinformation and disinformation, reported earlier this year that accounts and pages affiliated with these dozen individuals are responsible for nearly two-thirds of the anti-vaccine misinformation on social media. Press Secretary Jen Psaki referenced those findings in a press briefing. 

The Center for Countering Digital Hate’s latest data shows that in recent months, tech companies have taken some action to limit the reach of the disinformation dozen, but they still have extensive reach across social media. Companies have removed 35 accounts, but at least 62 affiliated with these individuals remain active. They’ve lost about 41 percent of their followers, but still have 8.4 million across platforms.

Imran Ahmed, the CEO of the center, told me in an interview that it's time for governments to get more creative with the tools already available to them, like existing consumer protection rules, to respond to the “infodemic” of falsehoods on social media. 

“There's just been a serial failure to understand the nature of the problem,” he said. “This is not a free speech issue, this is about people making money.” 

He's optimistic that after four years of inaction, the FTC, state attorneys general and the White House are beginning to gear up to take more meaningful action on medical misinformation and disinformation. 

The government "seems to be sputtering into action slowly,” he said.

Our top tabs

Major technology trade groups are backing a bipartisan infrastructure proposal.

Ten technology groups urged lawmakers to back the $974 billion proposal in a letter exclusively viewed by The Technology 202. The groups which include ACT | The App Association, Chamber of Progress, the Internet Association and TechNet highlighted investments in broadband infrastructure, cybersecurity and electric vehicles.

Senate Majority Leader Charles E. Schumer (D-N.Y.) plans to hold a key chamber vote on deal next week, Tony Romm and Seung Min Kim report. But lawmakers are still struggling to hammer out a final deal, with a major sticking point being how to pay for the government spending plan.

Iranian hackers targeted U.S. military and aerospace contractors on Facebook.

The TortoiseShell hacking group cultivated fake personas on multiple social media sites purporting to be recruiters and employees at well-known firms before apparently moving them to email and collaboration sites, Facebook said. It’s a notable change in tactics for the hacking group, which previously focused its hacking efforts on Middle Eastern IT companies. Fewer than 200 people were targeted in the latest campaign on Facebook and its Instagram platform, Facebook head of cyberespionage operations Mike Dvilyanski said.

Facebook linked some of the malware used in the hacks to an Iranian company that it said had ties to Iran’s Islamic Revolutionary Guard Corps, which the Trump administration designated as a terrorist organization in 2019.

An Israeli firm helped governments spy on more than 100 victims worldwide, Microsoft said.

The firm, which goes by the name Candiru, probably sold spying tools to governments in the Middle East and Asia, with targets including politicians, dissidents and journalists, Joseph Marks reports. Candiru is part of a burgeoning spyware industry that is largely unregulated.

“A world where private sector companies manufacture and sell cyberweapons is more dangerous for consumers, businesses of all sizes and governments,” said Cristin Goodwin, general manager of Microsoft’s Digital Security Unit. Researchers at CitizenLab found victims in Israel and the Palestinian territories, Iran, Lebanon, Yemen, Spain, the United Kingdom, Turkey, Armenia and Singapore. Candiru did not respond to requests for comment.

Rant and rave

Blue Origin announced that 18-year-old Oliver Daemen will join Amazon founder Jeff Bezos, who owns The Washington Post, on his trip to space next week. The person originally slated to join Bezos, his brother and 82-year-old aviator Wally Funk postponed their trip due to “scheduling conflicts.” The 19th's Orion Rummler:

ProPublica reporter Alec MacGillis:

The New York Times's Lauren Kelley:

Inside the industry

Trending

Daybook

  • The House Financial Services Committee’s artificial intelligence task force convenes a hearing on identity verification technologies today at noon.
  • A House Intelligence Committee panel holds a hearing on microelectronics security and innovation on July 20 at 10 a.m. 
  • Patreon policy head Laurent Crenshaw discusses patent policy at an Engine seminar on July 20 at 4 p.m.
  • The Computer and Communications Industry Association hosts an event on the tenth anniversary of the America Invents Act on July 22 at 1 p.m.
  • Twitter discusses its second-quarter earnings on a call on July 22 at 6 p.m.
  • Rep. Suzan DelBene (D-Wash.) speaks at a Brookings Institution event on cross-border data transfers on July 23 at 12:30 p.m.

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