96984 Federal Register / Vol. 89, No. 235 / Friday, December 6, 2024 / Notices 

se prohibition a restraint must have ‘manifestly 

anticompetitive’ effects and ‘lack . . . any 

redeeming virtue.’ ’’ (cleaned up)). 

14See, e.g., Aya Healthcare Servs., Inc. v. AMN 

Healthcare, Inc., 9 F.4th 1102, 1109 (9th Cir. 2021) 

(citing Rothery Storage & Van Co. v. Atlas Van 

Lines, Inc., 792 F.2d 210, 224 (D.C. Cir. 1986)). The 

Chair invokes Deslandes v. McDonald’s USA, LLC 

as ‘‘affirm[ing]’’ that ‘‘some no-poach or no-hire 

provisions may be analyzed as per se restraints 

under section 1 of the Sherman Act.’’ Chair’s 

Statement at 2 n.6. That is not quite right. 

Deslandes held only that a properly pleaded per se 

claim challenging no-hire clauses could survive a 

motion to dismiss because ‘‘the classification of a 

restraint as ancillary,’’ and therefore not subject to 

the per se standard, ‘‘is a defense, and complaints 

need not anticipate and plead around defenses.’’ 81 

F.4th 699, 705 (7th Cir. 2023), cert. denied, 144 S. 

Ct. 1057 (2024). Whether a restraint is ancillary, and 

therefore subject to the rule of reason, ‘‘requires 

discovery, economic analysis, and potentially a 

trial.’’ Ibid. 

15See, e.g., GTE Sylvania Inc., 433 U.S. at 49 & 

n.15 (citing Chi. Bd. of Trade v. United States, 246 

U.S. 231, 238 (1918) (Brandeis, J.)); Atl. Richfield 

Co. v. USA Petroleum Co., 495 U.S. 328, 342 (1990); 

Ohio v. Am. Express Co., 585 U.S. 529, 541–42 

(2018). 

16Am. Express Co., 585 U.S. at 542; Alston, 594 

U.S. at 100 (‘‘[A]nticompetitive restraints of trade 

may wind up flunking the rule of reason to the 

extent the evidence shows that substantially less 

restrictive means exist to achieve any proven 

procompetitive benefits.’’). 

17Compl. ¶ 14. Potential procompetitive 

justifications, i.e., legitimate objectives, in these 

circumstances could include Guardian seeking to 

recoup any costs for the training of and investment 

in its workers or for screening and background 

checks to employ these workers, or to protect any 

relevant trade secrets. 

18Matthew Gibson, Employer Market Power in 

Silicon Valley, IZA Discussion Paper No. 14843 

(Nov. 2021), https://docs.iza.org/dp14843.pdf 

(comparing workers’ salaries at Silicon Valley firms 

subject to DOJ’s no-poach investigation to worker 

salaries at other information-technology firms and 

concluding that the challenged no-poach 

agreements reduced salaries at colluding firms by 

4.8%). 

19Cf. Eichorn v. AT&T Corp., 248 F.3d 131 (3d 

Cir. 2001) (challenged no-hire agreement ‘‘not an 

antitrust violation under the rule of reason’’ where 

the particular provision at issue ‘‘did not have a 

significant anti-competitive effect on the plaintiffs’ 

ability to seek employment’’); Aya Healthcare 

Servs., 9 F.4th at 1110 (challenged non-solicitation 

agreement, involving employee outsourcing 

arrangement between healthcare staffing agencies 

collaborating to supply traveling nurses, not 

unlawful under rule of reason where restraint was 

reasonably necessary to ensure neither would lose 

personnel during collaboration); Giordano v. Saks 

Inc., 654 F. Supp. 3d 174, 201 (E.D.N.Y. 2023) 

(challenged no-poach agreement involving 

collaborative business arrangement not unlawful 

under rule of reason where luxury brands agreed 

not to poach Saks employees who were trained to 

sell brand products unless current managers 

consented or the employee had left Saks at least six 

months prior). 

20 15 U.S.C. 45(b). 

21 FTC v. Standard Oil of Cal., 449 U.S. 232, 241 

(1980); Boise Cascade Corp. v. FTC, 498 F. Supp. 

772, 779 (D. Del. 1980). 

22Standard Oil, 449 U.S. at 246 n.14; see also 

AMREP Corp. v. FTC, 768 F.2d 1171, 1177 (10th 

Cir. 1985). 

23The Chair presents this case as a choice 

between Guardian’s no-hire provisions ‘‘remain[ing] 

in place,’’ ostensibly presuming anticompetitive 

effects from their very existence, or continuing the 

investigation. Chair’s Statement at 2. That is not 

correct. I have seen no evidence of actual or 

threatened enforcement of these clauses. And even 

if Guardian did threaten or attempt to enforce such 

provisions, I have seen no evidence that such 

threatened or actual enforcement would violate the 

antitrust laws—the question before the Commission 

when deciding whether to issue a Complaint. The 

Chair’s citation of public comments submitted in 

response to the Commission’s separate, unrelated 

Non-Compete Clause Rule, id. at 2 n.9, does not 

change the facts, or lack thereof, in this matter. 

Moreover, I have no objection to the Commission 

agreeing not to bring an enforcement action so long 

as Guardian agrees not to enforce its no-hire 

provisions—akin to a non-prosecution agreement. 

But if the Commission invokes its power to issue 

a complaint, it must comply with the statute giving 

it that power—including the requirement that we 

have ‘‘reason to believe’’ that section 5 has been 

violated. 

here, the restraint is ancillary to an 

otherwise lawful and primarily vertical 

agreement.14 Under the rule of reason, a 

restraint violates section 1 if the 

anticompetitive effects of the restraint 

outweigh its procompetitive effects.15

Put slightly differently, the rule of 

reason forbids restraints for which the 

procompetitive justifications for the 

restraint could have been achieved 

through ‘‘less anticompetitive means’’ 

than those imposed by the restraint.16

Here, the Complaint alleges that 

‘‘[a]ny legitimate objectives of 

Guardian’s’’ use of the no-hire 

provisions ‘‘could have been achieved 

through significantly less restrictive 

means.’’ 17 This certainly may be true of 

some no-hire agreements. And no-hire 

clauses undoubtedly can have 

anticompetitive effects.18 In some 

circumstances, those anticompetitive 

effects will outweigh the procompetitive 

justifications for a no-hire clause.19

When those facts obtain, the no-hire 

provision violates the Sherman Act. 

But we cannot issue a Complaint 

against a company based solely on a 

theory about hypothetical effects of nohire agreements. To lawfully invoke our 

enforcement authority, we must have a 

‘‘reason to believe’’ that Guardian’s nohire provisions violate section 5, not 

that no-hire provisions generally could 

violate section 5.20 The Commission has 

a ‘‘reason to believe’’ the law has been 

violated only if it has evidence 

sufficient to make the ‘‘threshold 

determination that further inquiry is 

warranted.’’ 21 That reason must be 

‘‘well-grounded’’ in evidence that the 

Commission gleaned from its pre-filing 

investigation.22

Had the Complaint plausibly alleged 

anticompetitive effects outweighing 

procompetitive justifications, I would 

have voted for it. But the Complaint 

alleges nothing about the no-hire 

provisions’ effects. It does not allege 

direct evidence of anticompetitive 

effects, or of indirect, economic 

evidence of anticompetitive effects, like 

market power and harm to competition. 

It does not even allege that Guardian has 

ever tried to enforce any of these 

agreements, nor does it allege that a 

single Guardian customer or worker 

believed Guardian would enforce any of 

these provisions.23 Nor have I seen any 

such evidence that goes unmentioned in 

the Complaint. Indeed, I am at a loss 

about how my colleagues have formed 

their reason to believe that Guardian is 

violating the antitrust laws. 

The Commission ought to protect 

competition in the labor markets, but it 

cannot bend the law to do so. We must 

form a ‘‘well-grounded reason to 

believe’’ that the law has been violated 

before issuing an administrative 

complaint. Because we have no 

evidence of the effects of the no-hire 

agreements in this case, the Commission 

should not have issued this Complaint. 

I respectfully dissent. 

[FR Doc. 2024–28720 Filed 12–5–24; 8:45 am] 

BILLING CODE 6750–01–P 

FEDERAL TRADE COMMISSION 

[File No. 232 3023] 

IntelliVision Technologies Corp.; 

Analysis of Proposed Consent Order 

To Aid Public Comment 

AGENCY: Federal Trade Commission. 

ACTION: Proposed consent agreement; 

request for comment. 

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

Federal law prohibiting unfair or 

deceptive acts or practices. The attached 

Analysis of Proposed Consent Order to 

Aid Public Comment describes both the 

allegations in the complaint and the 

terms of the consent order—embodied 

in the consent agreement—that would 

settle these allegations. 

DATES: Comments must be received on 

or before January 6, 2025. 

ADDRESSES: Interested parties may file 

comments online or on paper by 

following the instructions in the 

Request for Comment part of the 

SUPPLEMENTARY INFORMATION section 

below. Please write ‘‘IntelliVision; File 

No. 232 3023’’ on your comment and 

file your comment online at https://

www.regulations.gov by following the 

instructions on the web-based form. If 

you prefer to file your comment on 

paper, please mail your comment to the 

following address: Federal Trade 

Commission, Office of the Secretary, 

600 Pennsylvania Avenue NW, Mail 

Stop H–144 (Annex F), Washington, DC 

20580. 


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Federal Register / Vol. 89, No. 235 / Friday, December 6, 2024 / Notices 96985 

FOR FURTHER INFORMATION CONTACT: 

Robin Rosen Spector (202–326–3740), 

Attorney, Division of Privacy and 

Identity Protection, Bureau of Consumer 

Protection, Federal Trade Commission, 

600 Pennsylvania Avenue NW, 

Washington, DC 20580. 

SUPPLEMENTARY INFORMATION: Pursuant 

to section 6(f) of the Federal Trade 

Commission Act, 15 U.S.C. 46(f), and 

FTC Rule § 2.34, 16 CFR 2.34, notice is 

hereby given that the above-captioned 

consent agreement containing a consent 

order to cease and desist, having been 

filed with and accepted, subject to final 

approval, by the Commission, has been 

placed on the public record for a period 

of 30 days. The following Analysis to 

Aid Public Comment describes the 

terms of the consent agreement and the 

allegations in the complaint. An 

electronic copy of the full text of the 

consent agreement package can be 

obtained at https://www.ftc.gov/newsevents/commission-actions. 

You can file a comment online or on 

paper. For the Commission to consider 

your comment, we must receive it on or 

before January 6, 2025. Write 

‘‘IntelliVision; File No. 232 3023’’ on 

your comment. Your comment— 

including your name and your State— 

will be placed on the public record of 

this proceeding, including, to the extent 

practicable, on the https://

www.regulations.gov website. 

Because of heightened security 

screening, postal mail addressed to the 

Commission will be subject to delay. We 

strongly encourage you to submit your 

comments online through the https://

www.regulations.gov website. If you 

prefer to file your comment on paper, 

write ‘‘IntelliVision; File No. 232 3023’’ 

on your comment and on the envelope, 

and mail your comment to the following 

address: Federal Trade Commission, 

Office of the Secretary, 600 

Pennsylvania Avenue NW, Mail Stop 

H–144 (Annex F), Washington, DC 

20580. 

Because your comment will be placed 

on the publicly accessible website at 

https://www.regulations.gov, you are 

solely responsible for making sure your 

comment does not include any sensitive 

or confidential information. In 

particular, your comment should not 

include sensitive personal information, 

such as your or anyone else’s Social 

Security number; date of birth; driver’s 

license number or other State 

identification number, or foreign 

country equivalent; passport number; 

financial account number; or credit or 

debit card number. You are also solely 

responsible for making sure your 

comment does not include sensitive 

health information, such as medical 

records or other individually 

identifiable health information. In 

addition, your comment should not 

include any ‘‘trade secret or any 

commercial or financial information 

which . . . is privileged or 

confidential’’—as provided by section 

6(f) of the FTC Act, 15 U.S.C. 46(f), and 

FTC Rule § 4.10(a)(2), 16 CFR 

4.10(a)(2)—including competitively 

sensitive information such as costs, 

sales statistics, inventories, formulas, 

patterns, devices, manufacturing 

processes, or customer names. 

Comments containing material for 

which confidential treatment is 

requested must be filed in paper form, 

must be clearly labeled ‘‘Confidential,’’ 

and must comply with FTC Rule 

§ 4.9(c). In particular, the written 

request for confidential treatment that 

accompanies the comment must include 

the factual and legal basis for the 

request and must identify the specific 

portions of the comment to be withheld 

from the public record. See FTC Rule 

§ 4.9(c). Your comment will be kept 

confidential only if the General Counsel 

grants your request in accordance with 

the law and the public interest. Once 

your comment has been posted on the 

https://www.regulations.gov website—as 

legally required by FTC Rule § 4.9(b)— 

we cannot redact or remove your 

comment from that website, unless you 

submit a confidentiality request that 

meets the requirements for such 

treatment under FTC Rule § 4.9(c), and 

the General Counsel grants that request. 

Visit the FTC website at https://

www.ftc.gov to read this document and 

the news release describing the 

proposed settlement. The FTC Act and 

other laws the Commission administers 

permit the collection of public 

comments to consider and use in this 

proceeding, as appropriate. The 

Commission will consider all timely 

and responsive public comments it 

receives on or before January 6, 2025. 

For information on the Commission’s 

privacy policy, including routine uses 

permitted by the Privacy Act, see 

https://www.ftc.gov/site-information/ 

privacy-policy. 

Analysis of Proposed Consent Order To 

Aid Public Comment 

The Federal Trade Commission 

(‘‘Commission’’) has accepted, subject to 

final approval, an agreement containing 

a consent order from IntelliVision 

Technologies Corp. (‘‘IntelliVision’’ or 

‘‘Respondent’’). The proposed consent 

order (‘‘Proposed Order’’) has been 

placed on the public record for 30 days 

for receipt of public comments from 

interested persons. Comments received 

during this period will become part of 

the public record. After 30 days, the 

Commission will again review the 

agreement, along with the comments 

received, and will decide whether it 

should make final the Proposed Order 

or withdraw from the agreement and 

take appropriate action. 

IntelliVision is a Delaware 

corporation with its principal place of 

business in San Jose, California. 

Respondent advertises and sells an 

artificial intelligence-based facial 

recognition software product to original 

equipment manufacturers, large 

integrators, and large end users. 

Respondent’s facial recognition software 

has been incorporated into two 

consumer products sold by its parent 

corporation Nice North America, LLC: 

the 2GIG Edge, a home security system; 

and the Elan Intelligent Touch Panel, a 

smart home touch panel. The software 

allows consumers to register their face 

and then scan their face to gain access 

to the 2GIG Edge home security system. 

Similarly, the software allows 

consumers to register their face and then 

scan their face to gain access to the 

smart home features of the Elan 

Intelligent Touch Panel. 

The Commission’s proposed threecount complaint alleges that 

Respondent represented that 

IntelliVision’s facial recognition 

software has one of the highest accuracy 

rates on the market and has been trained 

on millions of faces. The proposed 

complaint further alleges that 

Respondent represented that 

IntelliVision’s facial recognition 

software can detect faces of all 

ethnicities without racial bias, was 

developed with multi-ethnic and gender 

datasets to ensure no built-in bias and 

performs with zero gender or racial bias. 

In addition, the proposed complaint 

alleges that IntelliVision claimed its 

anti-spoofing technology ensures the 

system cannot be fooled by photo or 

video images. According to the 

proposed complaint, these claims are 

false or misleading or were not 

substantiated at the time the 

representations were made, in violation 

of section 5 of the FTC Act. 

The Proposed Order contains 

injunctive relief designed to prevent 

Respondent from engaging in the same 

or similar acts or practices in the future. 

Provision I prohibits Respondent from 

making any misrepresentation (1) about 

the accuracy or efficacy of its Facial 

Recognition Technology; (2) about the 

comparative performance of its Facial 

Recognition Technology with respect to 

individuals of different genders, 

ethnicities, and skin tones, or reducing 

or eliminating differential performance 


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96986 Federal Register / Vol. 89, No. 235 / Friday, December 6, 2024 / Notices 

1Complaint, In re IntelliVision Technologies 

Corp. 

2 Id. ¶ 11. 

3 Id. ¶ 14. 

4 Id. ¶ 13. 

5 Id. ¶ 11. 

6FTC Policy Statement on Deception, 103 F.T.C. 

174, 178 (1984) (‘‘When a seller’s representation 

conveys more than one meaning to reasonable 

consumers, one of which is false, the seller is liable 

for the misleading interpretation’’); FTC Policy 

Statement Regarding Advertising Substantiation, 

104 F.T.C. 839, 840 (1984) (‘‘Although firms are 

unlikely to possess substantiation for implied 

claims they do not believe the ad makes, they 

should generally be aware of reasonable 

interpretations and will be expected to have prior 

substantiation for such claims. The Commission 

will take care to assure that it only challenges 

reasonable interpretations of advertising claims.’’). 

based on such factors; or (3) about the 

accuracy or efficacy of its Facial 

Recognition Technology with respect to 

detecting spoofing or otherwise 

determining Liveness. (Facial 

Recognition Technology and Liveness 

are defined in the Proposed Order.) 

Provision II prohibits Respondent 

from making any representation about 

the effectiveness, accuracy, or lack of 

bias of Facial Recognition Technology, 

or about the effectiveness of such Facial 

Recognition Technology at detecting 

spoofing, unless Respondent possesses 

and relies upon competent and reliable 

testing that substantiates the 

representation at the time the 

representation is made. For the 

purposes of this Provision, competent 

and reliable testing means testing that is 

based on the expertise of professionals 

in the relevant area, and that (1) has 

been conducted and evaluated in an 

objective manner by qualified persons 

and (2) is generally accepted by experts 

in the profession to yield accurate and 

reliable results. Respondent also must 

document all such testing including: the 

dates and results of all tests; the method 

and methodology used; the source and 

number of images used; the source and 

number of different people in the 

images; whether such testing includes 

Liveness tests; any technique(s) used to 

modify the images to create different 

angles, different lighting conditions or 

other modifications; demographic 

information collected on images used in 

testing if applicable; information about 

the skin tone collected on images used 

in testing if applicable; and any 

information that supports, explains, 

qualifies, calls into question or 

contradicts the results. Provision III 

requires Respondent to obtain and 

submit acknowledgments of receipt of 

the Order. 

Provisions IV–VI are reporting and 

compliance provisions, which include 

recordkeeping requirements and 

provisions requiring Respondent to 

provide information or documents 

necessary for the Commission to 

monitor compliance. Provision VII 

states the Proposed Order will remain in 

effect for 20 years, with certain 

exceptions. 

The purpose of this analysis is to 

facilitate public comment on the 

Proposed Order, and it is not intended 

to constitute an official interpretation of 

the complaint or Proposed Order, or to 

modify the Proposed Order’s terms in 

any way. 

By direction of the Commission. 

April J. Tabor, 

Secretary. 

Concurring Statement of Commissioner 

Andrew N. Ferguson 

Today, the Commission approves a 

complaint and settlement against 

IntelliVision, a developer of facial 

recognition software.1 Count I charges 

IntelliVision with misrepresenting the 

efficacy of its software. IntelliVision 

claimed that its software had one of the 

highest accuracy rates in the world, but 

in reality it was not even among the top 

hundred best performing algorithms 

tested by the National Institute of 

Standards and Technology.2 Count I 

further accuses IntelliVision of claiming 

that its software was trained on 

‘‘millions’’ of faces, when the software 

was in fact trained on only 100,000 

faces.3 Count III accuses IntelliVision of 

claiming that its software could not be 

fooled by photo or video images even 

though it had insufficient evidence to 

support that categorical claim.4 I 

support these counts without 

reservation. 

I write briefly to explain why I also 

support Count II, which accuses 

IntelliVision of misrepresenting that its 

software performs with ‘‘zero gender or 

racial bias’’ when in fact its software 

exhibits substantially different falsenegative and false-positive rates across 

sex and racial lines.5 Treating 

IntelliVision as having committed a 

deceptive act or practice in these 

circumstances could lead one to believe 

that the Commission is taking the 

position that to be ‘‘unbiased,’’ a 

software system must produce equal 

false-negative and false-positive rates 

across race and sex groups. 

I do not read the complaint that way, 

and I today do not vote to fix the 

meaning of ‘‘bias.’’ Statistical disparity 

in false-positive and false-negative rates 

is not necessarily the only or best 

definition of what it means for an 

automated system to be ‘‘biased.’’ The 

question is open to philosophical and 

political dispute. Other definitions 

might consider the discriminatory 

intentions of the developers, the 

developers’ diligence in avoiding 

artificial disparities while training the 

automated system, or whether any 

statistical disparities reflect the 

underlying realities the system is 

designed to reflect or epistemological 

limitations in that underlying reality 

that are impossible or uneconomical to 

overcome. This complaint does not 

choose from among these competing 

definitions and considerations. 

But IntelliVision used the word 

‘‘bias.’’ If it intended to invoke a specific 

definition of ‘‘bias,’’ it needed to say so. 

But it did not say so; it instead left the 

resolution of this ambiguity up to 

consumers. IntelliVision must therefore 

bear the burden of substantiating all 

reasonable interpretations that 

consumers may have given its claim that 

its software had ‘‘zero gender or racial 

bias.’’ 6 A reasonable consumer could 

interpret ‘‘zero gender or racial bias’’ in 

this context to mean equal rates of false 

positives and false negatives across 

those lines. I therefore have reason to 

believe that IntelliVision’s claims were 

false or unsubstantiated because its 

software did not have equal falsepositive and false-negative rates across 

those lines. 

Pursuant to that understanding, I 

concur in the filing of the complaint and 

settlement. 

[FR Doc. 2024–28716 Filed 12–5–24; 8:45 am] 

BILLING CODE 6750–01–P 

FEDERAL TRADE COMMISSION 

[File No. 212 3035] 

Gravy Analytics, Inc.; Analysis of 

Proposed Consent Order to Aid Public 

Comment 

AGENCY: Federal Trade Commission. 

ACTION: Proposed consent agreement; 

request for comment. 

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

Federal law prohibiting unfair or 

deceptive acts or practices. The attached 

Analysis of Proposed Consent Order to 

Aid Public Comment describes both the 

allegations in the complaint and the 

terms of the consent order—embodied 

in the consent agreement—that would 

settle these allegations. 

DATES: Comments must be received on 

or before January 6, 2025. 


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