Last week, the FTC announced settlements in two health-related proceedings: the first regarding company adherence to privacy practices regarding sensitive health data and the second surrounding false and deceptive COVID-19-related health care claims.
On March 2, the Federal Trade Commission announced the issuance of a Proposed Order banning BetterHelp, Inc., a provider of online counseling and therapy services, from sharing consumers’ health data, including sensitive mental health information. The Order would also require the company to pay $7.8 million to its customers, and it would settle charges that BetterHelp breached its privacy obligations by claiming that the health-related information its customers provided would not be shared. The Proposed Order alleges that BetterHelp subsequently shared that data with third-party platforms to assist in targeted advertising.
Consumers interested in receiving treatment through BetterHelp must fill out a questionnaire that asks for sensitive mental health information as well as personal identifying information. At several points in the signup process, BetterHelp promised consumers that it would not use or disclose their personal health data except for limited purposes, such as to provide counseling services. The FTC’s Complaint alleged that BetterHelp breached this promise.
This is the first time the Commission has ordered funds be returned to customers whose privacy has been compromised. It is also the latest in a recent string of FTC actions against health care companies and platforms, coming on the heels of the Commission’s February enforcement action against GoodRX, the first FTC action under its Health Breach Notification Rule.
Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said last week that “[w]hen a person struggling with mental health issues reaches out for help, they do so in a moment of vulnerability and with an expectation that professional counseling services will protect their privacy. Instead, BetterHelp betrayed consumers’ most personal health information for profit.” He added, “Let this proposed order be a stout reminder that the FTC will prioritize defending Americans’ sensitive data from illegal exploitation.”
On March 3, the FTC announced the culmination of three lawsuits, filed by the Department of Justice on its behalf, against high-level distributors of doTERRA International products. doTERRA is a multilevel marketing company whose distributors sell the company’s essential oils and dietary supplements. The three doTERRA distributors—all health care professionals—claimed the products they sold could help treat or prevent COVID-19, a claim the FTC maintains has no scientific basis. To settle the lawsuits, the three individuals have agreed to predicate future claims on FDA approval, to have scientific proof for any future health-related claims and to each pay a $15,000 monetary penalty.
This FTC has already been vigilant in policing false and deceptive health care claims such as those made by the doTERRA defendants. For example, the FTC settled claims last year with R360 LLC and its owner for nearly $4 million for making what the Commission asserted were deceptive claims regarding the efficacy of the opioid treatment centers to which it referred consumers. In another recent case, the FTC settled with a company and its executives after alleging the company made false and deceptive health claims related to its teas.
Why It Matters: As Manatt has said before, we are seeing the FTC increasingly focus on the privacy practices of digital health companies, stepping in to address perceived gaps in legal protection and regulation of data held outside the traditional health care system, and thus not covered by the Health Insurance Portability and Accountability Act (HIPAA), the primary federal health privacy law. The BetterHelp action is part of a broader trend toward more active regulation of third-party data sharing for digital advertising and other purposes, especially on the state level. The FTC also is continuing its crackdown on the accuracy of health efficacy claims.
These two actions serve as the latest warning to health care companies and those promoting them that they are under federal scrutiny.