UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

COMMISSIONERS: Lina M. Khan, Chair 

Noah Joshua Phillips 

Rebecca Kelly Slaughter 

Christine S. Wilson 

Alvaro M. Bedoya 

In the Matter of 

HomeAdvisor, Inc., a corporation, 

d/b/a Angi Leads, DOCKET NO. 9407 

d/b/a HomeAdvisor Powered by Angi. 

OPINION FOLLOWING ORDER DENYING SUMMARY DECISION 

By Chair Lina M. Khan, for the Commission: 

On April 7, 2022, Complaint Counsel moved for summary decision on all counts of the 

Complaint in this matter alleging that Respondent engaged in unfair or deceptive acts or 

practices in violation of Section 5(a) of the Federal Trade Commission Act, 5 U.S.C. § 45(a). 

Respondent opposed the motion. On August 2, 2022, the Commission issued an Order denying 

summary decision. Below, we explain our reasoning for that denial and address certain of 

Respondent’s affirmative defenses raised in its opposition brief. 

I. BACKGROUND 

A. HomeAdvisor’s Business 

Respondent HomeAdvisor, Inc., also doing business as Angi Leads and HomeAdvisor 

Powered by Angi, is a Delaware corporation with its principal offices or places of business in 

Colorado. CCSF ¶ 2; RCCSF ¶ 2; Answer ¶ 1.1 It seeks to connect homeowners nationwide 

1 We use the following abbreviations: 

Compl. Complaint 

Answer Answer and Defenses of Respondent HomeAdvisor, Inc. 

1 
with local professional service providers across an aiTay ofhome service tasks, from handyman 

work and plumbing to landscaping and full-home remodels. See Answer at 2-3; RSF ,i 28. 

Stated briefly, HomeAdvisor collects info1m ation about otential customers for home se1vices 

(i.e., homeowners),2 runs that infonnation through , and then potentially sells 

the info1m ation to se1vice providers in its network m t e 01m ot a" ead." Answer ,i 4; RCCSF 

,i,i 11-13. 

CCSF ,r 4; RCCSF ii 4; 

Comp . ,i 10; Answer ,i 10; PX0028 At t e trme of the Complaint, 

HomeAdvisor's website homeadvisor.com stated: "Find trusted local pros for any home project" 

and prompted visitors to enter their contact info1mation and answer a series of questions about 

their potential projects. Compl. ,i 10; Answer ,i 10. Among the questions that users must 

typically answer are questions about their project status and timefram e. One question asks 

whether the project status is "Ready to Hire" or only "Planning & Budgeting." Compl. ,i 32; 

Answer ,i 32. Another asks when the user would like the project completed ( e.g., "Timing is 

flexible," "Within 1 week," " 1-2 weeks," or "More than 2 weeks"). Compl. ,i 32; Answer ,i 32. 

Yet another question asks whether the user is "the owner or authorized to make property 

changes." Compl. ,i 32; Answer ,i 32. 

HomeAdvisor also sells leads that are generated based on info1mation provided by 

homeowners over the phone. Com 1. 15; Answer 15; see also RSF 30. HomeAdvisor 's 

tele hone-oenerated leads 

PX0028 (Smith Tr. 26: 14-1 9); see also CCSF ii 4; RCSF ii 4. 

Mot. 

Opp. 

Reply 

CCSF 

RCCSF 

RSF 

OralArg. 

Memorandum in Support ofComplaint Counsel's Motion for Swumary Decision 

Respondent HomeAdvisor, Inc. 's Memorandum ofLaw in Opposition to Complaint 

Counsel's Motion for Summruy Decision 

Reply Memorandum in Support ofComplaint Counsel's Motion for Summruy Decision 

Complaint Cotuisel's Statement ofMaterial Facts as to Which There Is No Genuine Issue 

for Trial 

Respondent's Responses to Complaint Counsel's Statement ofPtupo1t edly Undisputed 

Facts (Prut Two ofRespondent's Statement ofMaterial Facts for Which There Is a 

Genuine Issue for Trial) 

Respondent's Cotuiterstatement ofMaterial Facts for Which There Is a Genuine Issue for 

Trial (Prut One ofRespondent's Statement ofMaterial Facts for Which There Is a 

Genuine Issue for Trial) 

Oral Argument Transcript (July 21, 2022) 

2 For ease ofreference, we refer to these potential customers for home services as "homeowners," although we 

recognize that not all ofthem actually own the home for which they may be seeking services. 

2 
In ad · · n, HomeAdvis · · · te fro · 

15% 

4; RSF ,r 150. 

HomeAdvisor sells several types ofleads, including Market Match leads, Exact Match 

and Instant Bookin leads. RCCSF 10. As HomeAdvisor ex lains, a Market Match lead 

PX0044-0007. 

, ' ' ,r 12. For an Instant Bookino lead, a visitor . . eb- . an appo· · · , 

· 

60 

10% 

CCSF ,r 10; RCCSF ,r 10. 

CCSF ,r 14; RCCSF ,r 14. With respect to Instant Booking leads, a 

service prov1 er 1s o 1gated to pay at the point the homeowner confinns a booked appointment 

with the service provider based on the service provider's availability calendar posted on 

HomeAdvisor's website. RCCSF ,r 14. 

Market Match lead fees vaiy depending on the type and geographic location ofthe 

project, but they generally cost less than Exact Match and Instant Booking leads. Compl. ,r 19; 

Answer ,r 19. Between July 2014 and September 2019, the average price of a lead, across lead 

types, tasks, and locations, was approximately {$30}. RCCSF ,r 16; Compl. ,r 19; Answer ,r 19. 

3 
The majority ofse1vice providers in HomeAdvisor's network are small businesses and 

local proprietorships. Answer ,r 5. Cf RCCSF ,r 36. A se1vice provider can only join 

HomeAdvisor's network by speaking to a HomeAdvisor sales agent over th e phone. Compl. 

,r 23; Answer ,r 23. HomeAdvisor explains that, during the em ollment call, se1vice providers 

create personalized HomeAdvisor online profile pages in which they select the specific tasks and 

geographic areas they wish to se1vice. RSF ,r 14. The online profile pages remain accessible to 

and under the control ofthe se1vice providers and can be changed at any time. RSF ,r 15. 

HomeAdvisor maintains a credit policy pursuant to which it may give service providers 

credits for " illegitimate leads." RSF ,r,r 71-72. According to HomeAdvisor, the credit policy is 

memorialized in its publicly-available Lead Credit Guidelines, which specify various situations 

that may be eligible or ineligible for a lead credit. RSF ,r 72; RX0l 13; RX0 l 14. If 

HomeAdvisor grants a se1vice provider's credit request, HomeAdvisor then applies the credit 

against the cost offuture leads. Compl. ,r 21; Answer ,r 21. 

HomeAdvisor advertises its roducts on its websites 

, . . . 

included conducting telephone sales outreach to se1v ice 

providers. CCSF ,r 27; RCCSF ,r 27; PX0105-0007. Per HomeAdvisor's corporate witness, as 

ofNovemb · ott 

B. The Allegations 

On March 11 , 2022, the Collllllission filed a Complaint alleging that HomeAdvisor 

engaged in unfair or deceptive acts or practices in violation of Section 5(a) ofthe Federal Trade 

Collllllission Act, 5 U.S.C. § 45(a), in connection with its marketing and sale ofits products to 

se1vice providers. The Complaint contains three counts. 

Count I alleges that HomeAdvisor misrepresented the quality, characteristics, and source 

ofits leads. In paiiicular, the Complaint asse1is that HomeAdvisor made false or misleading 

representations that the leads the se1vice providers would receive concern (a) individuals who 

intend to hire a se1vice provider soon, (b) projects that match th e types ofse1vices that se1vice 

providers have expressed they perf01m, (c) projects that match the geographic ai·eas the se1vice 

providers se1ve, or ( d) individuals who knowingly sought HomeAdvisor for assistance in 

4 
selecting a service provider. Compl. ,r,r 61-63. With respect to the first claim, the Complaint 

asseits that many of the leads sold by HomeAdvisor concerned people who did not intend to hire 

a service provider soon contra1 to HomeAdvisor's re resentations. Id. 31. The Com laint 

alle es that 

J. . T e Comp amt a so states t at many 

ofthe leads HomeAdvisor sold concerned people who actually indicated on their questionnaire 

that their project status was onl "Plannino & Budoetino "that the had an indefmite timeframe 

for project completion, Id. 

,r 32. With respect to representations t 1at HomeA visor wou mate t e types o services the 

provider offered in their geographic areas, the Complaint asserts that many service providers in 

fact received leads that concerned services they did not perfo1m or were outside the providers' 

geographic preferences. Id. ,r 39. Fmther, the Complaint asseits that contraiy to HomeAdvisor's 

representations that its leads concerned people who knowingly sought its assistance in selecting a 

service provider, - ofthe leads that HomeAdvisor sold were pm-chased from affiliates and 

concerned indivi~10 did not knowingly seek HomeAdvisor's assistance. Id. ,r,r 42, 45. 

Count II asserts that HomeAdvisor made false, misleading, or unsubstantiated 

representations to service providers that its leads conve1t into jobs at or above ceitain rates. Id. 

,r 64. Specifically, the Complaint asserts that, although HomeAdvisor's own calculations 

showed that the rate at which leads pm-chased by service providers turned into jobs ranged from 

{15 to 25 percent}, HomeAdvisor's sales agents frequently represented that those rates were 

much higher. Id. ,r,r 48-53. 

Finally, Count III alleges that HomeAdvisor made false or misleading representations 

that the first month of mHelpDesk was free. Id. ,r,r 66-68. In paiticular, the Complaint states 

that HomeAdvisor's sales agents represented to seivice providers that the cost of an annual 

membership was $347.98, including a free one-month subscription to mHelpDesk. Id. ,r 54. In 

fact, however, the cost ofthe annual membership was $287.99, and the $347.98 price 

represented the cost of an annual membership plus one month ofmHelpDesk, which was 

optional and cost an exti-a $59.99 per month. Id. ,r 58. Ifa se1vice provider did not want a onemonth subscription to mHelpDesk, the provider could have pm-chased the annual membership 

for the lower price. Id. 

HomeAdvisor denies any wrongdoing and asse1ts that the Complaint reflects a 

fundamental misunderstanding ofHomeAdvisor's business, its provider and homeowner 

network, and the lead-generation industty generally. Answer at l; Opp. at 2. Complaint Counsel 

have moved for Slllllll1aiy decision on the Complaint, and Respondent has opposed. For the 

reasons discussed below, the Commission has denied the motion. 

II. STANDARD FOR SUMMARY DECISION 

Rule 3 .24 of our Rules of Practice provides standai·ds analogous to those that apply to a 

Rule 56 motion for sununaiy judgment under Federal Rule ofCivil Procedure 56. See In re 

Mc Wane, Inc., Ltd., No. 9351, 2012 WL 4101793, at *5 (F.T.C. Sept. 14, 2012); In re Polygram 

5 
Holding, Inc., No. 9298, 2002 WL 31433923, at*1 (F.T.C. Feb. 26, 2002). A party moving for 

summa1y decision must show that "there is no genuine issue as to any material fact" and that it is 

"entitled to judgment as a matter oflaw." Fed. R. Civ. P. 56(a); 16 C.F.R. § 3.24(a)(2). 

As with a sunnna1y judgment motion, the party seeking summa1y decision "bears the 

initial responsibility of ... identifying those po1iions of [the record] which it believes 

demonstrate the absence of a genuine issue ofmaterial fact." Celotex C01p. v. Catrett, 477 U.S. 

317, 323 (1986) (internal quotations omitted). Provided the movant meets this burden, the "paiiy 

opposing the motion may not rest upon the mere allegations or denials ofhis or her pleading" but 

must instead "set fo1ih specific facts showing that there is a genuine issue of material fact for 

trial." 16 C.F.R. §3.24(a)(3); Celotex, 477 U.S. at 323. In evaluating the existence of a dispute 

for trial, we are required to resolve all factual ambiguities and draw all justifiable inferences in 

the light most favorable to the party opposing the motion. Anderson v. Liberty Lobby, Inc. , 4 77 

U.S. 242, 255 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 

(1986); Mc Wane, Inc., 2012 WL 4101793, at *5. 

III. ASSESSING THE ALLEGED VIOLATIONS UNDER SUMMARY DECISION 

STANDARDS 

A. Jurisdiction 

Under the FTC Act, the Co1mnission has jurisdiction over persons, paiinerships, and 

corporations using unfair or deceptive acts or practices "in or affecting commerce." 15 U.S.C. 

§ 45(a) (enumerating ce1iain exceptions, not relevant here, to the persons, paiinerships, and 

corporations covered). Respondent is a Delaware co1 oration that has its rinci al offices or 

laces ofbusiness in Colorado. Answer 1. 

See CCSF ,I 35; 

RCCSF ,r 35; RSF ,r 114. Accordingly, the Commission has jurisdiction over Respondent with 

respect to its alleged deceptive acts and practices. 

B. Legal Standard for Deception 

"An advertisement is deceptive ifit contains a representation or omission of fact that is 

likely to mislead a consumer acting reasonably under the circumstances, and that representation 

or 01nission is material to a consumer's purchasing decision." In re POM Wonderful, LLC, No. 

9344, 2013 WL 268926, at *18 (F.T.C. Jan. 16, 2013), aff'd sub nom. POM Wonde1ful, LLC v. 

FTC, 777 F.3d 478 (D.C. Cir. 2015); see also In re California Nature!, Inc., No. 9370, 2016 WL 

7228668, at *5 (F.T.C. Dec. 5, 2016); FTC Policy Statement on Deception, 103 F.T.C. 174, 175 

(1984), appended to Cliffdale Assocs., Inc., 103 F.T.C. 110 (1984) ("Deception 

Statement"). Thus, in dete1mining whether an advertisement is deceptive, the Commission 

considers (1) what claims are conveyed in the ad; (2) whether those claims are false or 

1nisleading; and (3) whether the claims are material. In re Health Rsch. Labs., LLC, No. 9397, 

2021 WL 5711355, at *5 (F.T.C. Nov. 19, 2021); In re Traffic Jam Events, No. 9395, 2021 WL 

5124183, at *12 (F.T.C. Oct. 25, 2021), pet.for reviewfiled, No. 21-60947 (5th Cir. Dec. 21, 

2021); California Nature!, 2016 WL 7228668, at *5. 

6 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Claims may be express or implied: express claims are those that directly state the 

representation at issue, while implied claims are any that are not express. Kraft, Inc., 114 F.T.C. 

40, 120 (1991), aff’d sub nom. Kraft, Inc. v. FTC, 970 F.2d 311 (7th Cir. 1992). Absent an 

explicit representation, the Commission may determine whether the advertisement in question 

makes a representation by considering whether, from the point of view of a reasonable 

consumer-viewer, the “net impression” of the advertisement is to make such a representation. 

Traffic Jam Events, 2021 WL 5124183, at *12; Jerk LLC, 159 F.T.C. 885, 891 (2015); FTC v. 

Direct Mktg. Concepts, Inc., 569 F. Supp. 2d 285, 298 (D. Mass. 2008); Removatron Int’l Corp. 

v. FTC, 884 F.2d 1489, 1497 (1st Cir. 1989) (looking to “common-sense net impression” of an 

advertisement). Extrinsic evidence is unnecessary if the claim is reasonably clear from the face 

of the advertisement. POM Wonderful, 2013 WL 268926, at *21. Both express and implied 

claims may be deceptive. Fedders Corp. v. FTC, 529 F.2d 1398, 1402-03 (2d Cir. 1976). 

“Deception may be accomplished by innuendo rather than by outright false statements.” FTC v. 

Wilcox, 926 F. Supp. 1091, 1098 (S.D. Fla. 1995) (quoting Regina Corp. v. FTC, 322 F.2d 765, 

768 (3d Cir. 1963)); FTC v. Cap. Choice Consumer Credit, Inc., No. 02-21050 CIV., 2003 WL 

25429612, at *4 (S.D. Fla. Jun. 2, 2003) (same). 

Turning to the second element, the determination of whether a representation or omission 

is deceptive turns on whether it is likely to mislead, not whether it has caused actual deception. 

Deception Statement at 176; Thompson Med. Co. v. FTC, 791 F.2d 189, 197 (D.C. Cir. 1986); 

Trans World Accts., Inc. v. FTC, 594 F.2d 212, 214 (9th Cir. 1979) (“[p]roof of actual deception 

is unnecessary to establish a violation of Section 5”). The question is whether the claim is likely 

to mislead a consumer acting reasonably under the circumstances. Southwest Sunsites, Inc. v. 

FTC, 785 F.2d 1431, 1436 (9th Cir. 1986); FTC v. Wilcox, 926 F. Supp. at 1098. 

The third element is materiality. A representation is considered “material” if it “involves 

information that is important to consumers and, hence, likely to affect their choice of, or conduct 

regarding, a product.” FTC v. Cyberspace.com, LLC, 453 F.3d 1196, 1201 (9th Cir. 2006) 

(quotation omitted); see also Kraft, 970 F.2d at 322; Jerk, 159 F.T.C. at 891. Express claims are 

presumed material, see FTC v. Pantron I Corp., 33 F.3d 1088, 1095-96 (9th Cir. 1994), and 

consumer action based on express statements is presumptively reasonable. See FTC v. Five-Star 

Auto Club, Inc., 97 F. Supp.2d 502, 528 (S.D.N.Y. 2000) (citations omitted). Where evidence 

exists that a seller intended to make an implied claim, the Commission will infer materiality. 

Deception Statement at 182. The Commission also presumes materiality where claims relate to 

central characteristics of the product or service such as its purpose, safety, efficacy, or cost. Id.; 

Thompson Med. Co., 104 F.T.C. 648, 816-17 (1984). 

C. Count I: Misrepresentations About the Intent to Hire, Type and Geographic 

Location of Projects, and Source of Leads 

The first count in the Complaint alleges that Respondent falsely represented that its leads 

concern (1) individuals who intend to hire a service provider soon, (2) projects that match the 

types of services that the service providers have expressed they perform in the geographic areas 

that they have expressed they serve, and (3) individuals who knowingly sought HomeAdvisor for 

assistance in selecting a service provider. Although styled as a single count, the allegations 

7 
involve separate representations and are effectively separate sub-counts, so we discuss them 

separately. 

1. Intent to Hire 

Complaint Counsel allege that Respondent made false or misleading, express and 

implied, representations that its leads concern homeowners who are ready to hire a se1vice 

provider soon. Mot. at 12-13; Compl. ,r 6. According to Complaint Counsel, express 

representations include statements indicating that the homeowners are "ready to hire" and "not 

just window shopping." Mot. at 13-14. Implied representations include assertions that the 

homeowners are "serious" or "project-ready" or other te1ms that strongly imply the same 

meaning. Id. 

To supp01t the claim that Respondent made the alleged representations about intent to 

hire, Complaint Counsel point to statements on HomeAdvisor's website and in its advertising, 

transcripts from a sample ofrecorded sales calls, as well as declarations from se1vice providers 

and former HomeAdvisor employees. See CCSF ,r,r 62, 65. These materials provide examples 

of HomeAdvisor or its sales reps describing its leads as concerning homeowners who are "ready 

to hire," "ready to buy," "project-ready," "serious," "actively seeking the se1vices ou rovide" 

or other similar hrases. Id. 62 65. Com laint Counsel also cite to 

I, . ,r 63; RCCSF ,r 63; PX0050-0003. Respondent contests 

much ofthis evidence, arguing that the cited de onents are not credible dis utino the 

significance and characterization of the , and 

asse1ting that the recorded sales calls have not een s own to e representative o t e hundreds 

of thousands ofsales calls that took place over the relevant period. Opp. at 7-12; RCCSF ,r,r 63, 

65. Respondent also asse1ts that Complaint Counsel have failed to establish what "net 

impression" would have come across the multitude of conversations between sales reps and 

se1vice providers. Opp. at 12. And, Respondent asserts that it is not clear how te1ms such as 

"serious" or "project-ready" would have been understood by se1vice providers, who it claims are 

sophisticated and understand the lead-generation indust1y and the product they are purchasing. 

Id. at 13, 17. 

With respect to falsity, Complaint Counsel present two basic arguments. The first is that 

Respondent sol 

See Mot. at 14.3 The second argument is that many of 

individuals who were not interested in the se1vice at all, such as leads 

leads with obviously fake info1111ation, or leads for homeowners who ms1ste ey were not 

looking for a se1vice provider. Id. at 14-15. As to this latter argument, Respondent claims that 

no filtering process is foolproof and that it is widely understood that some number ofillegitimate 

se1vice requests are likely to reach se1vice providers in any lead-generation company. Opp. at 

3 Complaint Cotmsel also state that HorneAdvisor { sells homeowners' information even when those homeowners 

indicate that they do not have a definite timeframe for completing their projects or are not authorized to hire 

someone at all.} Id. 

8 
20. Respondent also points to its credit policy, which it claims allows service providers to obtain 

credits for illegitimate leads not caught by the filtering system. Id. 

With respect to the materiality of the claims concerning readiness to hire, Complaint 

Counsel apply the presumptions for express representations and for representations that concern 

the central characteristics, purpose, and efficacy ofthe product. Mot. at 16. Complaint Counsel 

also point to, among other things_ 

We find that Respondent has raised genuine disputes offact with respect to the implied 

representations, including whether and how the alleged sophistication of service providers would 

have affected their understanding ofphrases like "serious" and "project-ready," as well as 

whether HomeAdvisor's homeowners could accurately be described by those tenns. Our 

determination regarding these issues would benefit from fuller development of the facts at trial. 

Complaint Counsel's claims regarding HomeAdvisor's express statements are stronger. 

Respondent's website describes its homeowners as "ready to hire" and not "just window 

shop[ping]." See PX0018-0073 ("HomeAdvisor connects contractors with homeowners who are 

ready to hire pros for their home projects[.]"); PX0019-0049 (same); PX0018-0025 ("You won't 

have to waste your time with customers who just window-shop. HomeAdvisor allows you to 

spend time with the ri ht 'read -to-bu 'customers." · PX0019-0012 similar . But Res ondent 

has admitted tha 

Respondent argues that Complaint Counsel must, but have failed to, show that the alleged 

misrepresentations were made "systemically or as a general or widespread pattern or practice." 

Opp. at 7. But the cases Respondent cites do not stand for such a broad proposition. In those 

cases, the Commission simply found that there was not substantial evidence of a deceptive 

statement having been made because the evidence consisted of only a few isolated instances of 

individual salespersons making the misrepresentation. See Benjamin L. Hill, 51 F.T.C. 48, 50 

9 
(1954); Nat'! Exec. Search, Inc. , 76 F.T.C. 962, 998 (1969). 4 That al'gument has no bearing on 

claims based on statements on HomeAdvisor's website; such statements are HomeAdvisor's own 

representations put fo1ward for public viewing. To be sure, it is conect that, in a case where 

representations are made only orally on a one-on-one basis in an unscripted environment, a 

handful ofisolated statements by a few individual sales representatives may not in and ofitself 

constitute substantial evidence ofmisrepresentation by the company. However, there is no 

general requirement that Complaint Counsel prove a pattern or practice of misrepresentation in 

order to show a violation ofSection 5 of the FTC Act. A single statement on a web page can 

suffice. See Fox Film C01p. v. FTC, 296 F. 353, 356 (2d Cir. 1924) ("One act that constitutes an 

unfair practice may of itselfbe offensive to the act."). 

Respondent does, however, make some factual contentions with respect to the express 

readiness-to-hire claim. Notably, Respondent argues that homeowners who indicated that they 

were only in the planning and budgeting phase could still accurately be described as "ready to 

hire" as that te1m would have been understood by sophisticated service providers. Oral Arg. at 

56:19-57: 1, 73:7-74:15; see also Opp. at 13-18 (discussing se1vice provider sophistication and 

understanding of the lead-generation industiy). Because at sllillffiaiy decision the Commission is 

bound to draw all justifiable inferences in favor of the non-moving paity, we have denied 

summa1y decision on the intent-to-hire sub-count; the question of whether the express ready-tohire claim is likely to mislead consun1ers could benefit from fuller development under the 

evidentiaiy standards applicable at tl'ial. 

2. Type and Geographic Location of Projects 

Complaint Counsel asse1i that HomeAdvisor has represented that se1vice providers will 

receive only those leads that match the type ofwork that they perfonn and the geographic areas 

where they want to work. Mot. at 16-17. Complaint Counsel contend, however, that 

HomeAdvisor's leads - have concerned tasks or geographic areas that do not match 

the se1vices or geogra~fthe se1vice providers. Id. at 18. With res ect to roject type, 

Com laint Counsel aroue that HomeAdvisor's latfonn 

's 

4 The federal case cited by Respondent, FTC v. Lucas/aw Ctr. "Jnco,porated", 2010 WL 11523900 (C.D. Cal. June 

21, 2010), is no different. That case, too, concemed the lack of evidence regarding individual statements made by 

call operators. Id. at *2. 

5 Com laint Counsel also assert, in a footnote. that 

r to address it. 
Respondent raises a number of arguments in defense, focusing in large part on disputing 

the alleged falsity ofHomeAdvisor's representations that its leads match se1vice providers' 

desired task types and geographic locations. First, Respondent notes that, during the enrollment 

process, se1vice providers themselves select their task and geographic preferences, which are 

then available on their profiles and can be changed at any time. Opp. at 21-22; RSF ,i,i 14-15, 

140. With respect to the allegation that HomeAdvisor's platfo1m 

, Respondent points out that HomeAdviso · h s 

Respondent further argues that 

claims about granularity are claims about competitive quality, not deception. Opp. at 23. As for 

mismatches that occur because ofhomeowner inaccuracy, Respondent asserts that homeowners 

are sometimes mistaken about the details of their projects (for example, whether a leaky roof 

needs to be replaced or merely repaired) or may make typographical eITors when entering 

location info1mation, but these are one-off events and do not amount to deception on the part of 

HomeAdvisor. Opp. at 22-23. 6 Respondent notes that 3.5%'-

Jd. at 24-25. Respondent further 

states that it is HomeAdvisor's policy to grant credits to se1vice providers if they receive a lead 

for a task or geographic area for which they are not profiled. Id. at 23; RSF ,i 141. In light of 

these various contentions, many of which go to the central question of whether HomeAdvisor's 

representations were false, we find that a decision on this sub-count should await the factual 

development of an evidentiaiy heai·ing. 

3. Source of Leads 

The last sub-count ofCount I alleges that HomeAdvisor falsely represented to 

prospective customers that its leads concern homeowners who have intentionally sought the 

company's help. Mot. at 19. To suppo1t the claim that HomeAdvisor made this representation, 

Complaint Counsel cite fo1mer employee and se1vice provider declai·ations as well as vai·ious 

statements from HomeAdvisor's sales training scripts, transcripts from recorded sales calls, and 

HomeAdvisor's website. See CCSF ,i,i 83-84, 86; PX0014-0001 (fo1mer employee declaration: 

"We told prospects that if they joined HomeAdvisor, they would receive high quality leads from 

homeowners who visited the HomeAdvisor website lookin for a contractor ..." · PX0051-0001 

o consumers use 

t e HomeA visor site? .. . In or er to qmc y md the best local se1vice professionals, customers 

submit a briefdescription of their se1vices using the HomeAdvisor interview on the Web site."); 

PX0018-0092 (website: "Consumers come to HomeAdvisor.com and give us detailed info about 

their projects. We match that info with your work and ai·ea preferences, and connect you with 

homeowners that match your needs."). 

6 Respondent also argues that, to the extent that service providers are affected by leads that include inaccurate 

info1mation from the homeowners, HomeAdvisor is immune from liability under the Communications Decency Act. 

That argument is discussed in Section IV.B. 

11 
, 

call; these leads certainly didn't have the same value as a lead who knew they had entered their . . . . . . . 

Respondent makes a variety offactual contentions with respect to all three elements of 

deception - the representation made, falsity, and materiality. First, Respondent disputes that it 

represented that all leads provided to service providers come from homeowners who submitted 

service requests on HomeAdvisor's online platfo1m or over the phone to a HomeAdvisor 

representative. RCCSF ,r,r 84, 86. Respondent asserts that declarants relied upon by Complaint 

Counsel are not credible and contends that the selected recorded sales calls were taken from an 

unrepresentative and unreliable sample. RCCSF ,r 86. Respondent objects to reliance on 

"scripts" because it asse1ts that sales agents do not use scripts or read them verbatim during sales 

calls with service providers. RCCSF ,r 84. Respondent also raises the question of whether one 

ofthe quoted webpages actually would have been accessible to service providers from its 

website. See Respondent HomeAdvisor, Inc. 's Demonstratives for the Commission's July 21, 

2022 Hearing at 36. Moreover, Respondent claims that HomeAdvisor's website publicly 

discloses the use of affiliates to generate leads. Opp. at 25; RSF ,r 148. 

Further, Respondent contends that the statements quoted by Complaint Counsel are trne. 

Respondent argues that those statements do not suggest that all leads would be from homeowners 

who submitted service re uests to HomeAdvisor directl and that in fact 85% 

See 

Opp. at 25; RCCSF ,r,r 83-84. Moreover, Respondent argues that affiliate websites identify their 

association with HomeAdvisor and therefore affiliate leads are actually from homeowners who 

have "intentionally sought HomeAdvisor's help." Opp. at 26. 

Respondent additionally disputes that the alleged misrepresentations are material. It 

points to alleged deficiencies in the various 

12 
· · · · · 1 iate websi 

, because affiliates are contractua y reqmre to 1sclose to 

omeowners t at t ell' requests w1 1be submitted to HomeAdvisor. Opp. at 26. Moreover, 

Respondent argues that, when emolling, se1vice providers often do not consider whether 

HomeAdvisor somces some ofits leads from third parties. Id.; RSF ,r 151 

Given the numerous disputes ofmaterial fact raised by Respondent, which we must view 

in the light most favorable to Respondent, we find that summa1y decision is not appropriate for 

this sub-count.7 

D. Count II: Misrepresentation About Rates at Which Leads Convert to Jobs 

For the second count, Complaint Counsel assert that HomeAdvisor sales agents have 

repeatedly told prospective customers that HomeAdvisor's leads converted to jobs at specific 

rates ("win rates"), but those rates were inflated and unsub · at . . . . 

Complaint Counsel further asse1i 

stantiate any wm rate claims, and what data it did 

7 To the extent Respondent argues that any alleged misrepresentation is mitigated or cured by disclosures on the 

HomeAdvisor website, we note that the Commission has previously held that disclaimers are ineffective when they 

are not in close proximity to the triggering representation. See California Nature/, 2016 WL 7228668, at *6 

("Adding a disclaimer to the bottom ofthe webpage that is well removed from proximity to the 'all natural' claims -

and, in fact, not visible at all without scrolling down - does not change the net impression conveyed to consumers 

that the product is 'all natural."'); see also FTC v. Washington Data Res., 856 F. Supp. 2d 1247, 1274 (M.D. Fla. 

2012), affd sub nom. FTC v. Washington Data Res., Inc., 704 F.3d 1323 (11th Cir. 2013) (rejecting defendants' 

argument that a disclaimer in the retainer agreement sufficiently dispelled a misrepresentation about whether a home 

loan was guaranteed); FTC v. Cyberspace.com LLC, 453 F.3d 1196, 1200 (9th Cir. 2006) (rejecting defendant's 

argument that tmthful fine print notices on reverse side of checks, invoices, and marketing inserts cured deception 

that check/invoice was a refund rather than offer for se1vices); Cap. Choice Consumer Credit, 2003 WL 25429612, 

at *5 (finding that "fine print on reverse side" of ad was inadequate to modify net impression), aff'd, 157 F. App'x 

248 (11th Cir. 2005); FTC v. Gill, 71 F. Supp. 2d 1030, 1044 (C.D. Cal. 1999), affd, 265 F.3d 944 (9th Cir. 2001) 

(granting FTC's motion for summaiy judgment and holding that a disclaimer in a contract consumers eventually 

signed was inadequate to overcome deceptive representations in defendants' adve1tisements); Resort Car Rental 

Sys., Inc. v. FTC, 518 F.2d 962, 964 (9th Cir. 1975) ("The Federal Trade Act is violated if [the seller] induces the 

first contact through deception, even ifthe buyer later becomes fully info1med before entering the contract."). 

13 
have contradicted the claims it made. Mot. at 21-22 24. Com laint Counsel note that 

Respondent disputes these claims. First, it disputes that these representations about win 

rate were widely made, asse1ting that they were neither coillillon nor approved. Opp. at 28. 

Respondent dismisses the sales call transcripts as a "handful of recorded sales calls" with respect 

to which Complaint Counsel have "failed to follow even basic statistical procedures to detennine 

the re resentativeness." Id. at 27. As for the Res ondent asserts that 

Respondent also takes issue with Complaint Counsel's assertions that the alleged 

statements are false and unsubstantiated. With res ect to Instant Bookin rates Res ondent 

claims tha 

Through these asse1tions, Respondent has disputed material facts underlying Complaint 

Counsel's claims. An evidentia1y hearing will allow the Administrative Law Judge to make 

initial rnlings on the merits of these disputes. We have therefore denied suill1Ila1y decision on 

the second count. 

14 
E. Count III: Misrepresentations Regarding mHelpDesk 

Com laint Counsel cite to amono other thin s sales call transcripts, 

Better Busmess Bureau 

complaints, in which customers expressed their belief that the first month was free, a form email 

to se1v ice providers confirming their purchase of an annual membership, which stated that 

$347.98 was the cost of the annual membershi and a "free" month ofmHel Desk as well as an 

Mot. at 26. Comp amt 

of mHelpDesk had they 

known it was not actually free but cost an additional $59.99. See id. 

Respondent disputes Complaint Counsel's allegations. It claims that the cited statements 

about the first month ofmHelpDesk being "free" were not encoura ed or condoned b 

HomeAdvisor mana ement. To the contra 

ent 

el 

173. 

With respect to the membership purch s co fn " free" month of 

mHelpDesk, Respondent claims that nd that Complaint 

Counsel offer no evidence it was used a er Febrnaiy 2016. RCCSF ,r 114. Moreover, 

Respondent appeai·s to deny that se1v ice provid e a 

, . ties in a 

light most favorable to Respondent, as we must, we find that this count too would benefit from 

the fuller factual development of an evidentia1y hearing. 

15 
 

 

 

 

 

 

 

 

 

 

 

 

Accordingly, we have denied summary decision on all counts of the Complaint in order 

to allow the parties’ respective factual contentions to be further developed and tested at trial. 

IV. AFFIRMATIVE DEFENSES 

Respondent has asserted several affirmative defenses that the parties have now briefed. 

We provide guidance below for the proceeding on remand. 

A. Proximate Cause 

In its Answer, Respondent asserts that “[t]he FTC’s claims are barred, in whole or in part, 

because the losses or injuries allegedly suffered were not proximately caused by any act or 

omission of HomeAdvisor.” Answer, Def. 7. Respondent explains that success with leads 

depends largely on the service provider’s own efforts to contact and nurture the leads it receives. 

Opp. at 31. Respondent asserts that discovery is needed to determine whether any given service 

provider’s success or failure with its leads was caused proximately by HomeAdvisor’s actions or 

the service provider’s own acts or omissions. Id. 

Respondent’s asserted defense relates to proximate cause of loss or injury and does not 

apply in a cease and desist proceeding. Complaint Counsel seek an order under Section 5 of the 

Act to halt alleged unfair or deceptive acts or practices by the Respondent. As discussed in 

Section III.B. above, the elements of such a claim are: (1) a representation or omission of fact (2) 

that is likely to mislead a consumer acting reasonably under the circumstances, and (3) that is 

material to a consumer’s purchasing decision. Neither proof of consumer reliance nor consumer 

injury is required to establish a Section 5 violation. FTC v. Freecom Commc’ns., Inc., 401 F.3d 

1192, 1203 (10th Cir. 2005). Proximate cause is therefore not an element of the claim.8 

B. Communications Decency Act 

Respondent asserts that, to the extent that service providers are affected by leads that 

include inaccurate information from the homeowners, as opposed to HomeAdvisor, 

HomeAdvisor is immune from liability under the Communications Decency Act (“CDA”). Opp. 

at 32, (citing 47 U.S.C. § 230(c)(1); FTC v. Match Grp. Inc., No. 3:19-CV-2281-K, 2022 WL 

877107, at *5-10 (N.D. Tex. Mar. 24, 2022)). 

Section 230(c)(1) of the CDA provides that “[n]o provider or user of an interactive 

computer service shall be treated as the publisher or speaker of any information provided by 

another information content provider.” 47 U.S.C. § 230(c)(1). With limited exceptions, the 

CDA confers immunity from federal and state claims for an interactive computer service 

provider’s or user’s “exercise of a publisher's traditional editorial functions—such as deciding 

8 Respondent’s citation to FTC v. Dantuma, 748 F. App’x 735, 738 n.1 (9th Cir. 2018), cert. granted, judgment 

vacated on unrelated grounds in light of AMG, sub nom. Publishers Bus. Servs., Inc. v. FTC, 141 S. Ct. 2589 

(2021), is not to the contrary. That case involved the FTC’s effort to recover equitable monetary relief in court 

under Section 13(b) of the Act, id. at 737, a context that required proof of harm to consumers. Such proof is not 

required here. 

16 
whether to publish, withdraw, postpone or alter content." Zeran v. Am. Online, Inc., 129 F.3d 

327, 330 (4th Cir. 1997). 

Complaint Counsel do not appear to dispute that HomeAdvisor qualifies as an interactive 

computer se1vice provider under the CDA. Mot. at 34; Reply at 22-23. However, Complaint 

Counsel point out that the CDA grants immunity only when a claim seeks to hold an entity 

responsible as the publisher or speaker ofcontent provided by another information content 

provider. Reply at 22; see also, FTC v. LeadClick Med;a, LLC, 838 F.3d 158, 174 (2d Cir. 

2016); FTC v. Accusearch, Inc., 570 F.3d 1187, 11 96 (10th Cir. 2009). Complaint Counsel 

argue that their claims are based on representations that Respondent made to prospective service 

providers on its website and via telephone sales calls. Reply at 22-23 (citing RCCSF ,r,r 24, 27). 

Thus, they argue, CDA immunity does not apply. 

As the proponent of an immunity defense, Respondent bears the burden to demonstrate 

the defense. Elliott v. Donegan, No. 18-CV-5680, 2022 WL 992527, at *2 (E.D.N.Y. Mar. 31 , 

2022) (quoting Gomez v. Toledo, 446 U.S. 635, 640 (1980)). Establishing immunity under the 

CDA is a highly fact-specific exercise. Greater factual development around HomeAdvisor 's 

lead-filtering process, for example is needed es eciall for the leads that involve task t e and 

eo1n-a hie location mismatches 

. Mot. at 18. As wit , 

per aps, many sue cases, a JU 1catmg CDA protection at t 1s pomt 111 the litigation, before 

substantial fact development, would foreclose close scrntiny of the actual nature of the 

relationship between Respondent and the allegedly illegal statements and conduct at issue. 

Of course, the law is clear that HomeAdvisor can be held liable for its own speech. 

Universal Commc'n Sys., Inc. v. Lycos, Inc., 478 F.3d 413, 419-20 (1st Cir. 2007) (citing 

Anthony v. Yahoo!, Inc. , 421 F. Supp. 2d 1257, 1262-63 (N.D. Cal. 2006)).9 The CDA does not 

grant HomeAdvisor a license to misrepresent lead quality and accuracy either in sales calls or on 

its website, nor do we understand Respondent to so argue. Opp. at 32 (limiting asse1i ion of 

immunity to infonnationfrom homeowners); see also Oral Arg. at 45 (Respondent is not 

asse1ting immunity for mHelpDesk claims or other matters that relate solely to Respondent's 

representations). Factual development at trial should help establish the prevalence of 

homeowner enors and misstatements and their relationship to Complaint Counsel's claims. 

C. Affirmative Misconduct 

9 As the Anthony court put it, "the CDA only entitles Yahoo! not to be 'the publisher or speaker' ofthe profiles. It 

does not absolve Yahoo! from liability for any accompanying misrepresentations. Because Anthony posits that 

Yahoo!' s mam1er ofpresenting the profiles - not the underlying profiles themselves - constitute fraud, the CDA 

does not apply." 421 F. Supp. 2d at 1263. 

17 
Oral Arg. at 78-79. Based on these allegations, Respondent 

asse1ts aftnmahve e enses o at umative misconduct, equitable estoppel, in pari delicto, and 

unclean hands. Answer, Defs. 13-15; Opp. at 32-33. Respondent states that it is pmsuing 

discove1y to dete1mine the full extent ofthe alleged impropriety. Opp. at 33. 

First, we find that Respondent has failed to demonstrate that the defenses of equitable 

estoppel or in pari delicto apply here. The traditional elements of equitable estoppel are: (1) 

false representation; (2) a purpose to invite action by the pa11y to whom the representation was 

made; (3) ignorance of the trne facts by that pai1y; and (4) reliance. United States v. Philip 

Morris, Inc., 300 F. Supp. 2d 61, 71 (D.D.C. 2004). Respondent alleges none ofthese elements. 

Fm1her, plaintiffs who are "trnly in pari delicto are those who themselves violated the law in 

cooperation with the defendant." Pinter v. Dahl, 486 U.S. 622, 636 (1988) (quotation omitted). 

Respondent makes no such allegation here. See United States v. Philip Morris, Inc., 300 F. 

Supp. 2d at 66. 

As to defenses of affmnative misconduct and unclean hands, the bar is high. See Masters 

Phann., Inc. v. DEA, 861 F.3d 206, 225 (D.C. Cir. 2017) ("The bar for establishing ' affmnative 

misconduct' is high, requiring a showing of 'misrepresentation or concealment, or, at least, 

behav[ior] ... that ... will cause an egregious~y unfair result"' (quoting GAO v. Gen. Acct. Off 

Pers. Appeal Bd., 698 F.2d 516, 526 (D.C. Cir. 1983)) (emphasis added). Some comts have 

found that the affomative defense of uncleai1 hands does not lie against the government when it 

brings an action in the public interest. See United States v. PhWp Morris, Inc., 300 F. Supp. 2d 

at 7 5 ( unclean hands defense unavailable as a matter oflaw when the government sues in the 

public interest); United States v. Neb. Beef, Ltd., No. 8:15CV370, 2016 WL 6088267, at *4 (D. 

Neb. May 6, 2016) (noting that "[c]omts are divided on the issue whether a pai1y may asse1t the 

affinnative defense of unclean hands against the government in an enforcement action pursuant 

to the public interest") (collecting cases). Where comts have pe1mitted equitable defenses to be 

raised against the government in a public interest suit, "they have required that the agency's 

misconduct be egregious and [that] the resulting prejudice to the defendant rise to a 

constitutional level." Bartko v. SEC, 845 F.3d 1217, 1227 (D.C. Cir. 2017), (quoting SEC v. 

Elecs. Warehouse, Inc. , 689 F. Supp. 53, 73 (D. Conn. 1988)); accord, SEC v. Cuban, 798 F. 

Supp. 2d 783, 794 (N.D. Tex. 2011). 

Respondent points to no evidence suggesting that it will be able to demonsh'ate the 

uired level of re·udice from the alleoed im ro rieties here. Com laint Counse 

10 See RX0142 at 1 (definition of "Parties"); ,r 14 ("Persons Bonnd by Order"). In the case that Respondent cites for 

the proposition that Complaint Counsel are bonnd, Martindell v. In t'! Tel. & Tel., Co,p. 594 F.2d 291, 296 (2d Cir. 

1979), the Second Circuit emphasized the importance of protective. orders and denied the govemment' s effo1t to 

modify such an order to obtain materials for use in a grand jury investigation. But Martindell did not hold that the 

government was bom1d as a party to the order. 

18 
- so long as any liability in this proceeding rests on dete1minations by the Commission 

supported by facts in the administrative record and applicable law. 

Nevertheless, we have detennined not to deny the affnmative misconduct and unclean 

hands defenses at this time because Respondent has indicated that discove1y regarding the 

allegations is ongoing. Opp. at 33. As to such future discove1y, we note that comts generally 

disfavor the practice of taking depositions ofopposing counsel. Theriot v. Par. ofJefferson, 185 

F.3d 477,491 (5th Cir. 1999); AbiomedInc. v. Maquet Cardiovascular LLC, No. CV 1:16-

10914-FDS, 2017 WL 11625640, at *2 (D. Mass. Oct. 6, 2017) ("Any time a deposition notice 

names an opposing paity's counsel, cun ent or fo1mer, as the deponent, red flags go up") (citing 

Bogosian v. Wolooholian Realty C01p., 323 F.3d 55, 66 (1st Cir. 2003). In Shelton v. American 

Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986), the comt explained: 

Taking the deposition of opposing counsel not only disrupts the adversarial 

system and lowers the standai·ds ofthe profession, but it also adds to the already 

bmdensome time and costs oflitigation. It is not hard to imagine additional 

pretrial delays to resolve work-product and attorney-client objections, as well as 

delays to resolve collateral issues raised by the attorney's testimony. 

See also W. Peninsular Title Co. v. Palm Beach Cnty., 132 F.R.D. 301, 302 (S.D. Fla. 

1990) ("Federal comts ... have held that depositions of attorneys inherently constitute an 

invitation to harass the attorney and paities, and to disrupt and delay the case."). The 

paity who wishes to depose opposing counsel should beai· the bmden to demonstrate 

good cause for such a deposition, including the exhaustion of alternative discove1y 

mechanisms such as intenogatories and document requests and the existence ofimpo1tant 

non-privileged info1mation to be discovered. See Shelton, 805 F.2d at 1327 (requiring 

that "no other means exist to obtain the infonnation," that "the info1mation sought is 

relevant and nonprivileged," and that "the info1mation is crucial to the preparation of the 

case"); Nationwide Mut. Ins. Co. v. Home Ins. Co., 278 F.3d 621, 628 (6th Cir. 2002) 

(same); Boughton v. Cotter Co1p., 65 F.3d 823, 830 (10th Cir. 1995) (approving of 

Shelton factors); W. Peninsular Title, 132 F.R.D. at 302 (recommending that written 

intenogatories be employed instead ofdeposing opposing counsel); Kelling v. 

Bridgestone/Firestone, Inc., 153 F.R.D. 170, 171 (D. Kan. 1994) (denying motion to 

compel deposition because "other methods, such as written intenogatories, requests for 

production, or requests for admission, which do not involve the same danoers as an oral 

de osition of o osin counsel should be em lo ed" · Oral Aro. at 80 

The Commission is not dismissing the affnmative 

efense m or er to a ow 1scove1y but reminds Respondent that it must meet the high 

standard set fo1th in these cases before being pe1mitted to depose Complaint Counsel. 

Specifically, Respondent must attempt to seek the discovery through other avenues and, 

if it believes it requires depositions ofComplaint Counsel, be prepared to demonstrate 

that the testimony is crucial and all other means employed proved insufficient to obtain 

the necessaiy info1mation. 

19 
 

 

 

 

 

 

 

 

 

D. Constitutional Defenses 

Respondent asserts several constitutional defenses to this proceeding in its Answer. 

Answer, Defs. 17-18, 20-24. It addresses the following affirmative defenses in its brief: 

1. a claim that the FTC Act, which provides that a Commissioner may be removed only for 

“inefficiency, neglect of duty, or malfeasance in office,” 15 U.S.C. § 41, violates the 

separation of powers and Article II’s Appointments Clause. Answer, Def. 20; Opp. at 33; 

2. a claim that the President’s authority to appoint Commissioners is unconstitutionally 

constrained by the political-party restrictions of 15 U.S.C. § 41, in violation of Article II 

of the Constitution and the First Amendment. Opp. at 33; 

3. a claim that adjudication of this matter by the ALJ and the Commission violates the right 

to due process under the Fifth Amendment, including because these proceedings 

assertedly lack a neutral decisionmaker and lack equal protection. Id.; Answer, Def. 23; 

and 

4. a claim that, to the extent that the findings in this proceeding are used in a potential legal 

action for damages under FTC Act § 19, such administrative fact-finding would violate 

Respondent’s right to have those facts found by a jury in an Article III court. Opp. at 

33.11 

Respondent’s brief requests denial of the motion for summary decision and raises these 

constitutional issues. Opp. at 34. However, at oral argument, Respondent’s counsel stated that 

Respondent presently seeks only denial of Complaint Counsel’s motion for summary decision 

and that such denial is the only issue that the Commission needs to decide now. Oral Arg. at 43-

44. We concur that the constitutional defenses need not be decided at this time. Respondent has 

preserved its constitutional defenses, and we reserve them for a future determination should it 

prove necessary. 

By the Commission. 

April J. Tabor 

Secretary 

SEAL: 

ISSUED: September 9, 2022

11 Respondent also expressly preserves an affirmative defense that having an administrative law judge preside over 

and administer this proceeding violates the separation of powers and Article II’s Appointments Clause. Opp. at 34 

n.144; see Answer, Def. 21. 

20