Digital businesses that don’t keep their promises to consumers can pay a heavy price if caught by the Federal Trade Commission (FTC). Enforcement actions in cases involving unfair and deceptive practices by digital businesses have produced tens of millions of dollars in consumer redress or civil penalties, sometimes exceeding $100 million, alongside operational restrictions and ongoing monitoring. Company officers can also face personal monetary penalties.

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According to a Sept. 28 alert by Hogan Lovells Cadwalader, businesses should build compliance programs around a basic comparison. Do their platforms deliver what they promise about prices, payments, subscriptions and access? Reviewing advertisements alone is insufficient when software, billing systems or internal rules produce a different result.

The analysis identifies five recurring categories of conduct, providing a framework for assessing exposure under the FTC Act and related consumer-protection laws.

The first involves unauthorized charges and account lockouts. Complaints challenged payment services that failed to verify authority over accounts and platforms that denied access to purchased benefits. Grubhub allegedly froze gift-card balances through fraud controls while continuing to charge some blocked users subscription fees.

The second concerns subscription enrollment and cancellation, including inadequately disclosed recurring charges, enrollment without informed consent, unexpected cancellation fees and difficult exit procedures. The third covers misleading claims about earnings and available work, such as advertised pay rates few workers achieved or job listings that overstated actual opportunities.

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