FTC Cases Scrutinize Digital Businesses' Promises and Practices
By PYMNTS | October 14, 2026 | Listen to Article
Digital businesses that fail to uphold their promises to consumers can face significant consequences if caught by the Federal Trade Commission (FTC). Enforcement actions against digital businesses for unfair and deceptive practices have resulted in substantial consumer redress, civil penalties, and operational restrictions. In some cases, these penalties have exceeded $100 million. Company officers may also face personal financial penalties.
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Compliance Framework for Digital Businesses
As highlighted in a September 28 alert by Hogan Lovells Cadwalader, businesses should assess their compliance programs based on a fundamental comparison:
Do their platforms deliver what they promise about prices, payments, subscriptions, and access?
The analysis identifies five recurring categories of conduct:
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Unauthorized Charges and Account Lockouts: Platforms that fail to verify account authority or deny access to purchased benefits. For example, Grubhub allegedly froze gift-card balances through fraud controls while charging subscription fees to blocked users.
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Subscription Enrollment and Cancellation: Issues include inadequately disclosed recurring charges, enrollment without informed consent, unexpected cancellation fees, and difficult exit procedures.
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Misleading Claims about Earnings and Work: Advertised pay rates that few workers achieved or job listings that overstated opportunities.
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Price and Fee Disclosures: Checkout charges inconsistent with advertised prices and fine print that fails to correct misleading impressions.
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Discrepancies Between Advertised Rules and Practices: Undisclosed benefit limits, eligibility restrictions, and other practices that deviate from advertised rules.