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Eshoo, senators urge FTC probe of outlet stores

Rep. Anna Eshoo and three other members of Congress want a federal investigation of whether outlet stores are engaging in misleading marketing practices.

In a letter sent Thursday to Federal Trade Commission Chairwoman Edith Ramirez, Eshoo, D-Palo Alto, and U.S. Senators Sheldon Whitehouse, D-R.I.; Richard Blumenthal, D-Conn.; and Ed Markey, D-Mass., urged a probe into whether companies sell lower-quality items produced specifically for outlet stores without properly informing consumers about the difference between those items and the higher-quality products found in regular retail stores.

“Historically, outlets offered excess inventory and slightly damaged goods that retailers were unable to sell at regular retail stores,” the lawmakers wrote. “Today, however, some analysts estimate that upwards of 85 percent of the merchandise sold in outlet stores was manufactured exclusively for these stores. Outlet-specific merchandise is often of lower quality than goods sold at non-outlet retail locations. While some retailers use different brand names and labels to distinguish merchandise produced exclusively for outlets, others do not. This leaves consumers at a loss to determine the quality of outlet-store merchandise carrying brand-name labels.”

The lawmakers cite news reports estimating the nation’s more than 300 outlet malls were expected to generate $25 billion in sales last year.

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Brown, Feinstein seek action on gas prices

Gov. Jerry Brown and U.S. Sen. Dianne Feinstein today pushed for action and answers on California’s skyrocketing gas prices.

Brown directed the California Air Resources Board to take emergency steps to increase the state’s gasoline supply and bring down fuel prices by immediately taking “whatever steps are necessary” to let oil refineries to make an early transition to winter-blend gasoline, which typically isn’t sold until after October 31.

“Gas prices in the state have set new record highs, and gas is completely unavailable at some stations in southern California,” Brown wrote to CARB chairwoman Mary Nichols. “If this situation continues, it may cause unacceptable price impacts for consumers and small businesses, significant economic disruption, and serious harm to public safety and welfare.”

Winter-blend gasoline evaporates more quickly than the gas sold in summer months, which is better for air quality during the smog season. Allowing an early transition could increase California’s fuel supply by up to an estimated 8 to 10 percent with only negligible air quality impacts, Brown said.

Gas prices in California have skyrocketed over the past week due to a tightening of fuel supplies caused in part by shutdowns at Tesoro and Exxon refineries. The Exxon refinery came back online Friday and Tesoro is scheduled to resume production early next week.

Feinstein, meanwhile, sent a second letter to Federal Trade Commission chairman Jon Leibowitz – she sent the first in late August – asking for an immediate investigation of the price spike:

First, I request that the FTC immediately initiate an investigation to determine if the price spike in Southern California this week results from an illegal short squeeze. A Reuters investigation cites industry sources who believe that the 97-cent price spike in CARBOB gasoline this past week “has many of the hallmarks of a classic short squeeze.” Multiple trade sources say Tesoro Corporation was caught short on supply. In the severely concentrated Los Angeles gasoline market, the few sellers were reportedly able to squeeze Tesoro either through collusion or use of market power. An FTC investigation is likely the only way to determine whether this reported squeeze took place.

Publically available data appears to confirm that market fundamentals are not to blame for rising gas prices in California. Despite a pipeline and refinery shut down, gasoline production in the state last week was almost as high as a year ago, and stockpiles of gasoline and blending components combined were equal to this time last year, state data show.

Second, I ask that the FTC immediately seek data sharing agreements that will allow it to monitor gasoline and oil markets actively and effectively. Data on prices, trading activity, refinery output, demand, stocks, and other information are vital to determine if trading activities reflect fraud, manipulation, or other malicious trading practices. While much of this data is currently collected, but not released, by the CFTC, the Energy Information Administration, the California Energy Commission, and private sources, the FTC does not collect, compile, or analyze this information in any organized or ongoing way. I believe that obtaining relevant data is a basic prerequisite of effective consumer protection.

Third, I request that the FTC establish a permanent gasoline and oil market oversight unit modeled on the Federal Energy Regulatory Commission’s (FERC) Division of Energy Market Analytics and Surveillance. As you know, FERC’s anti-manipulation authority in natural gas and electricity markets mirrors the FTC oil market authority nearly word for word. With its authority, FERC has built an entire division of market monitoring professionals who oversee trading in real time to protect consumers from malicious trading practices. I fail to understand why the FTC has not yet set up its own unit to oversee oil markets.

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Feinstein urges FTC probe of CA’s high gas prices

Something’s fishy about the California’s recent spike in gas prices, U.S. Sen. Dianne Feinstein said today.

Feinstein, D-Calif., sent a letter to Federal Trade Commission Chairman Jon Leibowitz urging that the FTC launch an investigation of the sudden rise in prices at the pump.

“The recent price spike began on August 6th, when a refinery fire at Chevron’s Richmond Refinery reduced refining capacity at the state’s third largest refinery,” she wrote. “However, this dangerous incident has not resulted in a reduction of gasoline supply that would explain the recent rapid price increase.”

Feinstein noted gas prices have risen 30 cents per gallon since then, reaching $4.21. “As a result, California has the highest gas prices in the continental United States. The increase is more than double the increase in the national average over the same period.”

“It is important that the Commission use its statutory authority aggressively to pursue and remedy any market schemes or other market distorting activities that have led to either the August spike in California gas prices or the longer term trend of higher gas prices in California,” Feinstein wrote.

Read the entire letter, after the jump…
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Jackie Speier offers online, financial privacy bills

Worried that Facebook, Google or some other online entity is collecting, using and sharing data on your online activities? Rep. Jackie Speier says she has your back, with one of two bills she introduced today aimed at protecting people’s personal information.

The Do Not Track Me Online Act of 2011 (H.R. 654) aims to give consumers the ability to prevent the collection and use of data on their online activities, directing the Federal Trade Commission to develop standards for a “Do Not Track” mechanism so people can choose upfront to opt out of the collection, use or sale of their online activities, and require covered entities to respect the consumer’s choice. Failure to do so would be considered an unfair or deceptive act punishable by law. The covered entity would have to disclose its collection and sharing practices, including with whom the information is shared. The bill would allow the FTC to exempt commonly accepted commercial practices like the collection of information for billing purposes.

“People have a right to surf the web without Big Brother watching their every move and announcing it to the world,” said Speier, D-Hillsborough. “The internet marketplace has matured, and it is time for consumers’ protections to keep pace.”

Speier cited a USA Today poll released Tuesday that showed that 70 percent of Facebook members and 52 percent of Google users say they are either “somewhat” or “very concerned” about their privacy.

“It’s crucial that Americans have as much control over their online privacy as possible and this bill is a welcome and important first step toward that goal,” American Civil Liberties Union Legislative Counsel Christopher Calabrese said. “Signing on to the Internet shouldn’t mean signing away your privacy. Americans must have a mechanism in place to opt out of having their online habits tracked so that they can protect their most sensitive information. A ‘do not track’ list is a logical and common sense place to start. We urge the House to make this bill a priority.”

Speier also introduced the Financial Information Privacy Act of 2011 (H.R. 653), which aims to give consumers control of their own financial information. The bill mirrors a California law Speier steered to passage that prevents financial institutions from sharing or selling personally identifiable nonpublic information with affiliates without an opportunity to opt-out, or in the case of unaffiliated third parties, a requirement that consumers opt-in.

“Because of the law we passed in California, consumers now have the clear and simple ability to prevent financial institutions from sharing their personal information,” Speier said. “Every American deserves that right.”

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Barbara Lee gets new Appropriations assignment

Rep. Barbara Lee, D-Oakland, says she’s “extremely pleased” with her appointment yesterday to three key Appropriations subcommittees: She retained her position on the Labor, Health and Human Services and Education and the State, Foreign Operations subcommittees, and also gained a new assignment to the Financial Services Subcommittee.

That new assignment gives her a say in jurisdiction over appropriation of funds to key federal offices including the Office of Management and Budget, Department of the Treasury, Federal Trade Commission and the Small Business Administration.

Said Lee: “I look forward to continuing my work on the committee to address the challenges confronting our nation and world.”