Lawsuits & Settlements

Attorney General Bonta Issues Statement Following Conclusion of Kroger, Albertsons Antitrust Hearing

September 18, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

OAKLAND — California Attorney General Rob Bonta today issued a statement following the conclusion of the preliminary injunction hearing in the state’s lawsuit challenging Kroger’s proposed $24.6 billion purchase of Albertsons:

"This week, California’s antitrust hearing against Albertsons and Kroger came to an end. My office proudly joined the Federal Trade Commission, seven other states, and the District of Columbia in a lawsuit that we believe is critical to protecting California consumers, workers, and competitive markets here and across the country," said Attorney General Bonta. “If these two giants of the retail grocery industry combine forces, it’s likely that we’ll see reduced competition, a blow to unions looking to negotiate better working conditions, and higher food prices at a time when so many families are struggling to get food on the table. We must ensure corporations follow the rules — as the People’s Attorney, I am committed to fighting unlawful corporate consolidation that threatens to increase prices and reduce good jobs.”

Background

In February 2024, Attorney General Bonta joined the Federal Trade Commission and a bipartisan coalition of states in filing a lawsuit seeking to block the proposed Albertsons-Kroger merger, alleging that it is in violation of the federal Clayton Act. Businesses facing less competition have the ability to charge higher prices. Anticompetitive supermarket mergers can result in other harms, including reduced labor market competition, which may lower wages or slow wage growth, worsen benefits or working conditions.

In California, Kroger’s $24.6 billion purchase of Albertsons is expected to further consolidate the highly concentrated retail grocery market in Southern California, leading to fewer choices and higher prices. The merger is also expected to reduce the ability of unions to negotiate working conditions at these stores, impacting thousands of employees in California. In August 2024, Attorney General Bonta issued a statement on the first day of trial. 

In October 2022, Attorney General Bonta and five other state attorneys general sent a letter to Albertsons and Kroger demanding that Albertsons delay a $4 billion payout to stockholders until state attorneys general and the FTC complete their review of its proposed merger with Kroger, to ensure that the proposed action would not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects. In November 2022, Attorney General Bonta, along with the attorneys general of the District of Columbia and Illinois, asked the D.C. District Court to temporarily block Albertsons' planned $4 billion payment amid concerns that the payment would dramatically hamper Albertsons' ability to compete. Also in November 2022, Attorney General Bonta, along with the attorneys general of the District of Columbia and Illinois, filed a motion for a preliminary injunction to block Albertsons' planned $4 billion payment of a "special dividend" to shareholders.

Attorney General Bonta Issues Statement on First Day of Trial in Challenge to Kroger and Albertsons Megamerger

August 26, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

Merger to impact consumers and workers in Southern California 

OAKLAND — California Attorney General Rob Bonta today issued a statement on the first day of trial in the state’s lawsuit challenging Kroger’s $24.6 billion purchase of Albertsons. Kroger and Albertsons are the two largest national supermarket chains in the country and this merger presents a significant risk of reduced competition and higher food prices nationwide. In California specifically, the Albertsons-Kroger merger is expected to further consolidate the highly concentrated retail grocery market in Southern California, leading consumers to face fewer choices and higher prices. The merger is also expected to reduce the ability of unions to negotiate working conditions at these stores, impacting thousands of employees in California.

In February 2024, Attorney General Bonta joined the Federal Trade Commission and a bipartisan coalition of states in filing a lawsuit that seeks to block the proposed Albertsons-Kroger merger, alleging it is in violation of the federal Clayton Act. 

“Across California, families are struggling to make ends meet and wincing at the price of everything from groceries to gas. As the People’s Attorney, it is my honor to stand up to big corporations who only care about their bottom line and directly contribute to this unaffordability. That is exactly what we are doing with this lawsuit,” said Attorney General Bonta. “This merger will leave Californians with fewer choices over where to shop – and for workers in this industry, where to work. We are in court today to prevent this unlawful attempt by Kroger and Albertsons to merge their operations and reduce competition in the marketplace.”

 

Attorney General Bonta Files Lawsuit Against RealPage for Unlawfully Enabling Landlords to Raise Rents of Californians

August 23, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

Pricing alignment schemes contributed to higher rent prices throughout Southern California 

OAKLAND — California Attorney General Rob Bonta today, alongside the U.S. Department of Justice, and a bipartisan coalition of eight attorneys general, filed a lawsuit against RealPage, a revenue management software company used by landlords to price multifamily rental housing units. The lawsuit alleges RealPage enabled landlords to artificially raise rents by participating in a pricing alignment scheme that increased their rent revenue across the board, enabled by the illegal sharing of confidential pricing and supply information. This harmed consumers by decreasing competition, limiting price negotiation, and increasing prices in the rental housing industry. Pricing alignment schemes affected rental housing throughout California, especially in multifamily buildings in Southern California including in Orange County, Anaheim, Santa Ana, Irvine, Riverside, San Bernardino, Ontario, Rancho Cucamonga, Temecula, Murrieta, San Diego, and Carlsbad.

“Anticompetitive agreements are illegal, whether done by a human or software program. RealPage misused private and sensitive consumer data to take the competition out of the rental industry, leaving renters no other choice but to pay the intentionally high prices that landlords agreed to set,” said Attorney General Bonta. “This means that even if rental home supply was high, rent prices stayed the same, and in some cases, rents went up. This conduct is unacceptable and illegal, and given California’s current housing shortage and affordability crisis, it is causing real harm. Every day, millions of Californians worry about keeping a roof over their head and RealPage has directly made it more difficult to do so.”

RealPage is in the business of generating rent increases and growing revenue for landlords by using algorithmic models to recommend price increases to subscribers. It does so by amassing competitively sensitive data from competing landlords through its pricing algorithms and sharing this data among subscribers. Landlords understand that their nonpublic data will be used to recommend prices not just for their own units, but also for competitors who use the programs. Landlords agree to provide this information because they understand they will benefit from the information of their rivals. In other words, RealPage knows what competing landlords are charging and can increase profits for landlords by using that information to recommend landlords set or raise their prices uniformly, thereby eliminating competition, and leaving renters no choice but to pay artificially high prices.

Over the last four decades, housing needs have significantly outpaced housing production in California. Housing costs have skyrocketed, making it harder for Californians to keep a roof over their heads. California's 17 million renters spend a significant portion of their paychecks on rent, with an estimated 700,000 Californians at risk of eviction.   

The lawsuit filed today alleges RealPage violated Sections 1 and 2 of the Sherman Antitrust Act, which prohibits anticompetitive agreements, monopolization, and attempted monopolization. Monopolization offenses occur when a single firm maintains a monopoly unlawfully, by using its control of the market to exclude rivals and harm competition. RealPage’s unlawful sharing of nonpublic, competitively sensitive data aligns landlords’ pricing and effectively removes the competitive pressure that benefits renters. Without competitive pressure, landlords have no incentive to decrease prices or offer discounts common in rental markets, like a free month or waived fees. RealPage’s rivals who lawfully compete on merits cannot guarantee landlords the increased profits that RealPage can provide, this maintains and protects RealPage’s monopoly power. 

The lawsuit seeks to end:

  • The anticompetitive agreements between RealPage and its landlord customers to share confidential, competitively sensitive information.
  • A pricing alignment scheme to raise rents for the American public.
  • RealPage’s illegal monopoly in revenue management software built on the competitors’ data that it collects and uses.

In filing the lawsuit, Attorney General Bonta joins the U.S. Department of Justice and the attorneys general of Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington.

A copy of the complaint can be found here

 

Attorney General Bonta Announces $50 Million Settlement with Vitol and SK as Part of Ongoing Enforcement Against Big Oil

July 10, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

OAKLAND — California Attorney General Rob Bonta today announced a $50 million settlement with gas trading firms, resolving allegations that Vitol, Inc. (Vitol) and SK Energy Americas, Inc., along with its parent company SK Trading International (SK), secretly worked together to tamper with and manipulate spot market prices for California gasoline. The settlement reflects Attorney General Bonta’s larger effort to hold Big Oil accountable for unlawful price increases and anticompetitive behavior. SBX1-2 (Skinner), which passed last spring and was co-sponsored by Attorney General Bonta and Governor Newsom, established new oversight over petroleum markets.

 “Petroleum companies should not get to reap mass profits out of the pockets of hardworking Californians through illegal market manipulation,” said Attorney General Rob Bonta. “Market manipulation and price gouging are illegal and unacceptable, particularly during times of crisis when people are most vulnerable. That's why California passed the nation-leading legislation SBX1-2, which improves transparency in the oil industry so we can root out the causes of price irregularities and take action if we find companies violating the law. Today's settlement is an important reminder that no one is above the law.”

“When oil companies manipulate markets to line their own pockets, California will hold them accountable, and I commend my former colleagues in the Department of Justice on seeing this landmark case through to a successful conclusion,” said Tai Milder, Director of the Division of Petroleum Market Oversight. “Today, with Senate Bill X1-2 — the Gas Price Gouging and Transparency Law — California has even stronger tools to monitor the oil industry, expose bad actors, and protect consumers. These tools make it harder for industry actors like these firms to engage in this kind of misconduct in the first place."

This settlement resolves allegations brought in the California Department of Justice's lawsuit filed in May 2020. The lawsuit alleged that Vitol and SK took advantage of the market disruption following a February 2015 explosion at a gasoline refinery in Torrance, California to engage in a scheme to drive up gas prices for their own profit. These alleged actions illegally suppressed competition within the gasoline market and forced California consumers to pay more for gasoline.

To qualify for a settlement payment, you must submit a claim. Once the court authorizes the issuance of notice to California residents, you can submit a claim online at www.CalGasLitigation.com

Under the settlement and SBX1-2, if the firms resumed operations in California, Vitol and SK would be required to submit:

  • A daily report to the Energy Commission containing certain information for each transaction occurring in the preceding day.
  • Weekly reports to the Energy Commission that include the weekly inventory volume, by type, such as gasoline, gasoline blending components, diesel fuel, or renewable fuels, for each position holder by name of company, and copies of all contracts or agreements entered into with any refiners, oil producers, petroleum product transporters, petroleum product marketers, petroleum product pipeline operators, terminal operators, or any other entity that trades in petroleum products whether or not those entities take possession of those products, as designated by the Energy Commission.

SBX1-2, authored by Senator Nancy Skinner (D-Berkeley), co-sponsored by Attorney General Bonta and Governor Newsom, and approved by a supermajority in both the Senate and Assembly, created a dedicated independent watchdog to root out market manipulation and price gouging by oil companies. The law went into effect on June 26, 2023.  

Attorney General Bonta is committed to holding Big Oil accountable. Last September, Attorney General Bonta and Governor Newsom filed a lawsuit against five of the largest oil and gas companies in the world — Exxon Mobil, Shell, Chevron, ConocoPhillips, and BP — and the American Petroleum Institute for allegedly engaging in a decades-long campaign of deception and creating climate change-related harms in California. Last month, Attorney General Bonta filed an amended complaint in this case, adding a remedy that would require the defendants to give up the profits gained through their illegal conduct. The amended complaint also includes additional examples of recent false advertising and greenwashing by the oil companies.

This settlement is in addition to a settlement of a private class action lawsuit filed in federal court. 

A copy of the Attorney General’s complaint is available here. For settlement information, please see here and here

Attorney General Bonta, L.A. City Attorney Feldstein Soto, Announce $500,000 Settlement with Tilting Point Media for Illegally Collecting and Sharing Children’s Data

June 18, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

Another important action to protect kids’ online data

OAKLAND — California Attorney General Rob Bonta, along with Los Angeles City Attorney Hydee Feldstein Soto, announced a $500,000 settlement with Tilting Point Media LLC (Tilting Point) resolving allegations that the company violated the California Consumer Privacy Act (CCPA) and the federal Children’s Online Privacy Protection Act (COPPA) by collecting and sharing children’s data without parental consent in their popular mobile app game “SpongeBob: Krusty Cook-Off.” In addition to $500,000 in civil penalties, Tilting Point must comply with injunctive terms ensuring legal data collection and disclosure, including obtaining parental consent and diligence in configuring third-party software in their mobile games.

“Businesses have a legal obligation to protect kids’ data and to comply with important state and federal privacy laws designed to protect children online. Failing to do this puts our kids at risk, leaving them vulnerable to having their personal data collected, tracked, and sold,” said Attorney General Bonta. “As children spend an increasing amount of time online, both on websites and using mobile apps, we will use every enforcement tool to ensure compliance with the law and that companies exercise diligence with privacy law requirements. I thank the Los Angeles City Attorney’s Office for their work on this issue and look forward to continuing to work collaboratively with local, state, and federal partners to protect children’s privacy.”

“The “SpongeBob: Krusty Cook-Off” game is based on some of the most beloved and recognizable characters in children’s entertainment. Tilting Point Media is alleged to have collected and shared its young players' personal data, violating consumer privacy laws and industry guidelines,” said Hydee Feldstein Soto, Los Angeles City Attorney. “Protecting our children has been a top priority for my administration. I am proud to partner with Attorney General Bonta to protect children throughout our State and am grateful to the lawyers in the Public Rights Branch in my office for initiating this action to stop data harvesting of minors.” 

“SpongeBob: Krusty Cook-Off” (SpongeBob) is a popular cooking simulation game that includes both targeted advertising and in-app purchases and is directed to children under the age of 13 as well as targeted to older teens and adults. The app was first investigated by the Children’s Advertising Review Unit (CARU), a division of the Better Business Bureau National Programs that investigates potential deceptive or inappropriate data collection from children online. CARU found that the privacy and advertising practices of the SpongeBob app failed to comply with COPPA and CARU’s industry guidelines. Although Tilting Point took some corrective action, a joint investigation by the California Department of Justice and Los Angeles City Attorney’s Office found that Tilting Point was in violation of the CCPA and COPPA in connection with how the mobile app handled children’s data. Tilting Point’s age screen did not ask age in a neutral manner, meaning children were not encouraged to enter their age correctly to be directed to a child-version of the game. Additionally, Tilting Point inadvertently misconfigured third-party software development kits (SDKs), resulting in the collection and sale of kids’ data without parental consent.

In addition to paying $500,000 in civil penalties, Tilting Point media must comply with strong injunctive terms. Tilting Point must:

  • Comply with the CCPA and COPPA related to children’s data in the SpongeBob game and all of its games directed to children.
  • Not sell or share the personal information of consumers less than 13 years old without parental consent, and not sell or share the personal information of consumers at least 13 and less than 16 years old without the consumer’s affirmative “opt-in” consent.
  • In instances where Tilting Point sells or shares the personal information of children, provide a just-in-time notice explaining what information is collected, the purpose, if the information will be sold or shared, and link to the privacy policy explaining the parental or opt-in consent required.
  • Use only neutral age screens that encourage children to enter their age accurately.
  • Appropriately configure third-party SDKs to comply with legal requirements related to children’s data.
  • Implement and maintain a SDK governance framework to review the use and configuration of SDKs within its apps.
  • Comply with laws and best practices related to advertising to minors, and minimize data collection and use from children.
  • Implement and maintain a program to assess and monitor its compliance with the judgment, including annual reports to the California Department of Justice and Los Angeles City Attorney’s Office.

COPPA AND CCPA

COPPA is a federal law that requires operators of websites and online services that are either directed to children under 13, or that have actual knowledge that they are collecting personal information from children under 13, to provide notice to parents and obtain parental consent before collecting, using, or disclosing personal information from children. The CCPA is a landmark state law that secures increased privacy rights for California consumers, including the right to know how businesses collect, share, and disclose their personal information and the right to opt-out of the sale or sharing of their personal information. The CCPA imposes on businesses specific responsibilities related to children’s data, including requiring parental consent before selling or sharing personal information from children under 13 years old, and obtaining the consumer’s affirmative opt-in consent for users at least 13 and under 16 years old.  

Attorney General Bonta is committed to enforcing both COPPA and the CCPA to improve children's online safety. Today's settlement represents Attorney General Bonta's third enforcement action under the CCPA, and his continued priority to protect children online:

  • In March, Attorney General Bonta joined a bipartisan multistate letter to the Federal Trade Commission proposing updates to regulations implementing COPPA and advocating for further clarity and specification for proposed rules. 
  • In February, Attorney General Bonta announced a settlement with DoorDash, resolving allegations that the company violated the CCPA and COPPA, by selling California customers’ personal information without providing notice or an opportunity to opt out of that sale. 
  • In January, Attorney General Bonta, Assemblymember Buffy Wicks, and Senator Nancy Skinner introduced the California Children’s Data Privacy Act (AB 1949), and the Protecting Our Kids from Social Media Addiction Act (SB 976), landmark legislation seeking to protect youth online. These two bills would, respectively, limit the harms associated with social media addiction and provide more robust protections for kids’ data privacy.
  • In October 2023, Attorney General Bonta co-led a bipartisan coalition of 33 attorneys general in filing a federal lawsuit against Meta Platforms, alleging among other things, that Meta designed and deployed harmful features on Instagram and Facebook that addict children and teens to their mental and physical detriment. The lawsuit alleges that Meta violated federal and state laws, including COPPA, California's False Advertising Law, and California’s Unfair Competition Law.
  • In 2022, Attorney General Bonta announced a settlement with Sephora, resolving allegations that the company violated the CCPA by failing to disclose to consumers that it was selling their personal information, and failing to process user requests to opt out of these sales. 

A copy of the complaint and the final judgment can be found here and here.

Attorney General Bonta Secures $700 Million Settlement with Johnson & Johnson for Misrepresenting Safety of Talc-Based Products

June 10, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

OAKLAND — California Attorney General Rob Bonta today, as part of a bipartisan coalition of 42 state attorneys general, announced a $700 million multistate settlement with Johnson & Johnson (J&J) resolving claims that the company violated consumer protection laws by misrepresenting the safety of its talc-based products. Specifically, J&J failed to disclose if asbestos was present in its talc products and that any asbestos present in the products is harmful and may lead to cancer. The proposed settlement, subject to court approval, bars J&J from resuming the manufacture, marketing, promotion, sale, and distribution of talc-based products. J&J stopped selling these products in the United States and Canada in 2020.

“Johnson & Johnson knew that it could not ensure the safety of its products for women and children and chose to prioritize profit over honesty. It's unacceptable, and for the people who were harmed, it's devastating,” said Attorney General Bonta. “Today and every day, I take pride in serving the people of California and holding those who compromise consumer safety accountable.”

Since 1992, J&J sold over 600 million talc products nationwide, marketed primarily as baby powder for infants and genital hygiene products for women. Talc products were marketed as safe and pure despite J&J knowing that it could not ensure the talc used in its powders was free of asbestos.

Long-standing studies have suggested a possible association between the use of powders containing talc in the genital area and the incidence of ovarian cancer. Both talc and asbestos are naturally occurring minerals that may be found in close proximity in the earth. The contamination of talc with asbestos is possible and at times, difficult to determine. Asbestos — a carcinogen that kills more than 12,000 people in the U.S. per year — is linked to diseases that are life threatening, or cause substantial pain and suffering, including mesothelioma, fibrosis, lung cancer, gastrointestinal cancer, as well as other lung disorders and diseases. There is no safe level of exposure to this highly toxic material.

In securing today’s settlement, Attorney General Bonta joins the attorneys general of Texas, Florida, North Carolina, Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and the District of Columbia. 

Attorney General Bonta is committed to investigating and remedying harm to consumers affected by unlawful and deceptive business practices. In May, Attorney General Bonta announced a $10.25 million settlement with major U.S. wireless carriers resolving allegations that the carriers violated consumer protection laws by engaging in deceptive and misleading advertising. Also in May, Attorney General Bonta announced a settlement with Liberty Tax for running deceptive advertisements that misled consumers into thinking they were getting a free advance on their tax refund when they were actually taking out a high-cost loan.

A copy of the proposed stipulated judgment, subject to court approval, can be found here

 

 

Attorney General Bonta, District Attorney Jenkins Announce Final Judgments Barring Manufacturers and Retailers from Selling Ghost Guns in California

June 4, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

Blackhawk Manufacturing, Glockstore, and MDX permanently prohibited from manufacturing or selling ghost guns in or into California

OAKLAND — California Attorney General Rob Bonta and San Francisco District Attorney Brooke Jenkins, who were assisted by volunteer counsel from Giffords Law Center to Prevent Gun Violence, and Keker, Van Nest & Peters, LLP, today announced that final judgments were entered against Blackhawk Manufacturing (Blackhawk), GS Performance LLC (Glockstore), and MDX Corporation (MDX) as part of a settlement with the companies. Pursuant to the judgments, the companies will be permanently prohibited from manufacturing or selling unserialized ghost gun kits and firearm precursor parts in California. Firearm precursor parts are items that may be easily converted into a frame or receiver of a firearm, or that are marketed as such. The companies will also pay civil penalties in the following amounts: $500,000 from Blackhawk, $120,000 from Glockstore, and $55,000 from MDX. The judgments resolve allegations that the companies violated California and federal law in their manufacturing, advertising, and sale of ghost gun kits and firearm precursor parts.  

“The manufacture and sale of ghost gun kits has created a largely chaotic industry that is a massive threat to public safety,” said Attorney General Rob Bonta. “As firearm-related deaths and injuries rise, we must look for upstream interventions that get to the crux of the gun violence epidemic. Getting these manufacturers and retailers to keep untraceable ghost guns off the market is a big win for public health and safety in California.”

“The influx of unlawful and untraceable ghost guns poses a serious public safety issue to residents of San Francisco and the State at large,” said District Attorney Brooke Jenkins. “This lawsuit should serve as a reminder that firearms laws must be followed, particularly with respect to the importation and sale of firearm precursor parts into California. I am pleased to have worked with Attorney General Bonta and our pro bono partners to achieve this important result and will not hesitate to take action in the future to enforce state and federal gun laws.” 

“This is huge for California and the national fight against ghost guns.These reckless ghost gun sellers were selling ghost gun kits to California consumers who could not lawfully assemble them. Keeping these untraceable guns out of the state will save lives," said Esther Sanchez-Gomez, Litigation Director, GIFFORDS Law Center. "We were proud to work with Attorney General Bonta, San Francisco District Attorney Jenkins, and Keker, Van Nest & Peters, LLP to secure this critical win for the people of California.”

“We are proud to work alongside Attorney General Bonta, District Attorney Jenkins, and the Giffords Law Center to help end the manufacture, distribution, and sale of ghost gun kits in California,” said Brook Dooley, a partner with the law firm Keker, Van Nest & Peters. “These manufacturers have circumvented California’s gun safety laws for far too long, helping to promote an alarming public safety crisis. The unchecked proliferation of ghost guns will no longer undermine the safety of our communities.”

Ghost gun kits, which commonly contain firearm precursor parts, pose a serious public safety threat. The kits can be used to self-assemble a fully functional weapon in less than 30 minutes and are typically sold without a serial number or background check. As a result, people legally prohibited from purchasing or possessing firearms could obtain ghost guns. The lack of serial numbers on these firearms also render them essentially untraceable, making them attractive to criminals and impeding law enforcement’s ability to prevent and solve crimes. According to data reported by the California Department of Justice, Bureau of Firearms, the number of ghost guns recovered by law enforcement in California increased by more than 49,000% from 2015 to 2021. 

The complaint, which was filed in 2021, alleges that the defendants violated California consumer protection laws, and state and federal laws governing firearms. According to the complaint, the defendants violated and undermined the federal Gun Control Act by selling ghost gun kits and firearm precursor parts that are not serialized and by failing to comply with point-of-sale requirements, including background checks and recordkeeping requirements. As alleged in the complaint, the defendants also violated California’s Unsafe Handgun Act by selling kits and firearm precursor parts that produce handguns that lack required safety features, and two of the defendants violated California’s Manufacture of Firearms Law by manufacturing unfinished frames and receivers without serializing them. The complaint further alleges that the defendants misled consumers about serialization, eligibility, and safety requirements for legally assembling a firearm under California law and falsely led them to believe that the firearms built from the defendants’ products were legal.

Under the terms of the judgments, Blackhawk, Glockstore, and MDX are each permanently prohibited from manufacturing or selling any unserialized firearm precursor parts in or into California. They are also prohibited from making any statements that falsely suggest it is legal to purchase, sell, assemble, or own ghost guns or firearm precursor parts in California. The companies must also prevent future violations of California’s firearms laws by training and educating employees and providing notices to customers.

Since the complaint was filed, California’s AB 1621 was passed in 2022, which made the sale of unserialized firearm precursor parts generally illegal in the state and has helped to stem the tide of ghost guns. These judgments hold the defendants accountable for their conduct prior to the enactment of AB 1621; they do so under longstanding federal and state laws governing firearms, unsafe handguns, and fair business practices, and reinforce the applicability of those laws to the ghost gun industry.

Attorney General Bonta is committed to keeping Californians safe and stands with partners throughout the state to continue tackling the issue of gun violence strategically and aggressively by:

A copy of the complaint is available here. A copy of the judgment as to Blackhawk is available here, and a copy of the judgment as to Glockstore and MDX can be found here.

Attorney General Bonta Files Lawsuit Against Live Nation, Ticketmaster

May 23, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

OAKLAND — California Attorney General Rob Bonta today, alongside the U.S. Department of Justice (U.S. DOJ), and a bipartisan coalition of 30 attorneys general, filed a lawsuit against Live Nation, the parent company of Ticketmaster, alleging unlawful conduct that has hampered competition in the ticketing and promotions of live music concerts. Live Nation’s strong domination over ticketing and promotions markets has allowed it to engage in a wide variety of anticompetitive behaviors.

“As the fifth largest economy in the world, California knows that vigorous competition is essential to a well-functioning economy,” said Attorney General Bonta. “Live Nation imposed its dominance of the live concert industry by manipulating the marketplace — sending ripples of economic injustice throughout our state. While this illegal conduct benefits Live Nation’s bottom line — it hurts artists, their fans, and our economy. This lawsuit sends a clear message: Here in California, we’re committed to protecting consumers, holding industry accountable, enforcing antitrust laws, and ensuring a fair and competitive market.”

The lawsuit alleges Live Nation violated Sections 1 and 2 of the Sherman Antitrust Act, which prohibits anticompetitive agreements, monopolization, and attempted monopolization. Monopolization offenses occur when a single firm maintains a monopoly unlawfully, by using its control of the market to exclude rivals and harm competition. In addition, the complaint alleges violation of California’s Unfair Competition Law. 

The complaint filed today alleges that Live Nation protects its monopoly by using both exclusive contracts with promoters and venues to protect its dominant position in the live music industry to force artists and venues to use both its ticketing and concert promotion services. Live Nation uses their market dominance to leverage its power over all other aspects of the live music entertainment industry: from artist management, to ticketing, and promotions. For example, Live Nation has used their dominance in promotions to force venues to use Ticketmaster’s ticketing services, thereby blocking innovation and unfairly competing with competitors in the music concert business.

In the lawsuit, Attorney General Bonta, U.S. DOJ, and coalition states allege that Live Nation has:

  • Harmed fans through higher fees. Fans’ ticketing experience — from buying a ticket to showtime — is also worse than it would be if the industry was competitive.
  • Maintained its monopoly in ticketing markets by locking up venues through restrictive long-term, exclusive agreements and threats that venues will lose access to Live Nation-controlled tours and artists if they sign with a rival ticketer.
  • Leveraged its extensive network of venues to force artists to select Live Nation as a promoter instead of its rivals, maintaining its promotions monopoly.  

The lawsuit asks the court to restore competition in the live entertainment industry by:

  • Prohibiting Live Nation from engaging in its anticompetitive practices.
  • Ordering Live Nation to divest Ticketmaster.
  • Securing financial compensation for California, as well as for fans who were overcharged by Live Nation, leading them to pay more than they would have in a competitive market for tickets.

In filing the lawsuit, Attorney General Bonta joins the U.S. Department of Justice and the attorneys general of Arizona, Arkansas, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia. 

Attorney General Bonta is committed to enforcing anticompetitive laws to ensure fair prices, innovation, and consumer choice.

In March, Attorney General Bonta, alongside U.S. DOJ, and a coalition attorneys general, filed a lawsuit challenging Apple’s anticompetitive behavior related to iPhone smartphones. The lawsuit alleges Apple deliberately made it more difficult for third-party apps and products to operate with the iPhone, resulting in higher prices for consumers and harm to competition in the smartphone industry. In February, Attorney General Bonta, the Federal Trade Commission, and a bipartisan coalition of states, announced filing a lawsuit that challenges the proposed merger of Kroger and Albertsons; this merger presents a significant risk of reduced competition and higher food prices nationwide. In December 2023, Attorney General Bonta announced a $700 million multistate settlement with Google resolving allegations that the company violated state and federal laws by monopolizing the Android smartphone application market. In November 2023, Attorney General Bonta and three other attorneys general announced joining U.S. DOJ’s lawsuit against Agri Stats, Inc., a company that organizes and manages anticompetitive information exchanges for meat processors and facilitated the unlawful increase of chicken, pork, and turkey prices across the U.S.

A copy of the complaint is available here.

Attorney General Bonta Secures Settlement Requiring Liberty Tax to Stop Deceptive Advertising

May 20, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

OAKLAND — California Attorney General Rob Bonta today announced a settlement with Liberty Tax (Liberty) for running deceptive advertisements that misled consumers into thinking they were getting a free advance on their tax refund when they were actually taking out a high-cost loan. These actions violated California law and a 2009 injunction obtained by the California Department of Justice following trial, which required Liberty to clearly disclose in every refund loan advertisement that the product is a loan. Under today’s settlement, which the court will enter as an amended judgment, Liberty must pay $150,000 in civil penalties and comply with enhanced disclosure requirements about its loan products.

“Liberty tax deceived hardworking families, eager for their tax refunds, into falling for high-priced loans. This is illegal and as the People’s Attorney, I will not stand for it,” said Attorney General Bonta. “This settlement prevents Liberty Tax from lying and misleading their customers in the future and serves as a warning to other tax preparation servicers: My office is watching, and we are prepared to go to the mat for California consumers."

Liberty provides tax preparation services directly to consumers, and as part of that, sells refund anticipation loan products, which are short-term loans with applicable fees secured by a consumer’s anticipated tax refund. 

In 2007, then Attorney General Brown sued Liberty, alleging that it deceptively advertised its refund anticipation loans by failing to clearly disclose that they were costly loans and not advances on consumers’ actual tax refunds. In 2009, Liberty was ordered to pay $1,161,699 in civil penalties and $135,866 in restitution and submit strong injunctive terms barring Liberty from deceptive advertising. Specifically, Liberty was ordered to clearly and “conspicuously” disclose in every refund loan advertisement that the product is a loan, and that fees and interest may apply.

Despite this court order, Liberty again began advertising “Easy Advance” and “Holiday Advance” refund anticipation loans online and in its stores without adequately disclosing that the products are loans. Today’s settlement imposes civil penalties for those violations and strengthens Liberty’s disclosure requirements. The new injunctive terms specifically define “conspicuous” in a number of advertising contexts, require Liberty to include the word “loan” in the name of each refund anticipation loan product, and require that Liberty use the full name of the loan product whenever the product is mentioned. This is intended to prevent marketing that might mislead consumers into thinking they are getting an advance on their tax refund when they are actually applying for a loan.

Attorney General Bonta is committed to standing up for Californians’ financial protection and their right to file taxes safely.

Last March, Attorney General Bonta issued a consumer alert with tips on preparing taxes safely, and Californians to file early, take actions to protect themselves online, and learn about free or low-cost tax filing opportunities. In May 2022, Attorney General Bonta, as part of a coalition of 51 attorneys general and with the Los Angeles City Attorney and Santa Clara County Counsel, announced a $141 million settlement against Intuit, resolving allegations that the California-based company deceptively advertised its “free” online TurboTax products. In May 2023, Attorney General Bonta  announced that consumers who were tricked by TurboTax’s owner Intuit into paying for free tax services would begin receiving checks. Californians received more than $12.2 million, distributed to the more than 400,000 consumers who were eligible for a free tax filing program and were instead deceived into paying to file their federal tax return.

The proposed judgment, which remains subject to court approval, is available here

Attorney General Bonta, District Attorney Stephan Announce Sentencing of Travel Agent for Embezzling Funds from School Trips Canceled Due to COVID-19 Pandemic

May 15, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

Martin paid $256,997.65 in restitution to victims

SAN DIEGO — California Attorney General Rob Bonta and San Diego District Attorney Summer Stephan this week announced that defendant Marie Martin, a San Diego-based travel agent and registered seller of travel, was sentenced to six months of home confinement and six months of felony probation for embezzling travel funds from more than 150 parents who paid for eighth-grade school trips to the East Coast. After the school trips were cancelled due to the COVID-19 pandemic, Martin refused to provide refunds to the parents, instead spending funds on personal expenses. Following her guilty plea in January, as part of the sentencing, Martin paid $256,997.65 in restitution to victims.

“Parents all over California are willing to spend their time and money to give their children a better life. Marie Martin financially took advantage of more than 150 families during an already traumatic and financially challenging time,” said Attorney General Rob Bonta. “I am proud to fight for the rights of consumers and thank the San Diego District Attorney’s Office for their partnership in investigating and prosecuting this case.”

“This defendant’s disgraceful crimes cheated parents who are working to give their children expanded educational opportunities that would broaden their horizons,” said San Diego County District Attorney Summer Stephan. “Together with the Attorney General, our Consumer Protection Unit delivered justice and restitution to the families who were defrauded out of their hard-earned income.” 

In early 2019, Martin solicited funds from parents at nine schools in Los Angeles and Orange counties for eighth-grade school trips to Washington, D.C., and the East Coast. The school trips were supposed to take place in 2020, but were canceled due to the COVID-19 pandemic. When the parents who paid for these trips requested refunds, Martin declined. Instead, she allegedly used client funds for personal expenses, including credit card purchases, rent, and artwork. The investigation revealed that even before the pandemic, Martin was experiencing cash flow problems and commingling client funds. Because Martin had used the parents’ funds for personal expenses, she was unable to refund parents when the pandemic halted all travel. 

The Attorney General’s Office operates the Seller of Travel Program, which registers travel agents and certain other travel businesses operating in California. The Attorney General, local district attorneys, and city attorneys can bring enforcement actions against sellers of travel for violations of the law. Any Californian who believes they have been wronged by a seller of travel is encouraged to contact their local district attorney and/or local law enforcement agency, and file a complaint with our office at ‪www.oag.ca.gov/report. California consumers who suffer losses due to a registered seller of travel’s failure to provide travel services or refunds may be eligible to file a restitution claim with The Travel Consumer Restitution Corporation.