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Financial Services Law Insights and Observations

Courts order VoIP providers to give information to FTC

Federal Issues FTC Enforcement CIDs Robocalls

Federal Issues

On February 14, the FTC announced that two federal courts in California ordered two Voice-over-Internet Protocol (VoIP) service providers to produce information that the agency is seeking as part of a continuing investigation into possible illegal robocalls. According to the first order, the VoIP service provider is required to comply with a CID as part of an FTC investigation. According to the FTC, “[a]lthough the CID directed [the respondent] to produce selected information and documents by the end of February 2021, the company produced only a small fraction of the required information, even after receiving an extension of the response deadline from Commission staff.” The FTC filed a petition in federal court seeking to compel compliance with the CID when further efforts to cooperate with the respondent were “unsuccessful.” The assigned magistrate judge issued a report and recommendation in December 2021, finding “that the FTC is entitled to enforcement of the remainder of the CID,” and recommending that the district judge enter an order requiring the respondent to comply. The court accepted that recommendation, and issued an order compelling the respondent’s compliance with the CID. The second VoIP service provider was likewise ordered to turn over information required under an FTC CID, issued to in January 2021. After failing to respond to the CID, the FTC filed suit to enforce compliance and claimed that “neither the company nor its principals had responded to the CID, which ‘materially impeded the FTC’s investigation.’” According to the FTC, the court granted the FTC’s petition, and in response, the respondent turned over the required information.