In re Gateway Learning Corp., FTC Docket No. C-4120 (2004) (consent order). | mrisch | July 28, 2014

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In re Gateway Learning Corp., FTC Docket No. C-4120 (2004) (consent order).

by mrisch

This consent order is an example of an FTC action levied against a company that misrepresented how it was using data

EDIT ANNOTATED ITEM INFORMATION DELETE ANNOTATED ITEM
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Page 1 of 7

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UNITED STATES OF AMERICA 

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FEDERAL TRADE COMMISSION

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)

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In the Matter of ) FILE NO. 042-3047

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)

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GATEWAY LEARNING CORP., ) AGREEMENT CONTAINING

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 a corporation. ) CONSENT ORDER

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 )

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The Federal Trade Commission has conducted an investigation of certain acts and

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practices of Gateway Learning Corporation, a corporation, (“proposed respondent”). Proposed

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respondent, having been represented by counsel, is willing to enter into an agreement containing

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a consent order resolving the allegations contained in the attached draft complaint. Therefore,

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IT IS HEREBY AGREED by and between Gateway Learning Corporation, by its duly

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authorized officers, and counsel for the Federal Trade Commission that:

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1. Proposed respondent Gateway Learning Corporation is a Delaware corporation with its

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principal office or place of business at 2900 South Harbor Boulevard, Suite 202, Santa

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Ana, CA 92704. 

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2. Proposed respondent admits all the jurisdictional facts set forth in the draft complaint.

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3. Proposed respondent waives:

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(a) Any further procedural steps;

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(b) The requirement that the Commission’s decision contain a statement of findings

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of fact and conclusions of law; and

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(c) All rights to seek judicial review or otherwise to challenge or contest the validity

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of the order entered pursuant to this agreement.

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4. This agreement shall not become part of the public record of the proceeding unless and

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until it is accepted by the Commission. If this agreement is accepted by the Commission,

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it, together with the draft complaint, will be placed on the public record for a period of

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thirty (30) days and information about it publicly released. The Commission thereafter

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may either withdraw its acceptance of this agreement and so notify proposed respondent,

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in which event it will take such action as it may consider appropriate, or issue and serve

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its complaint (in such form as the circumstances may require) and decision in disposition

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of the proceeding.Page 2 of 7

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5. This agreement is for settlement purposes only and does not constitute an admission by

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proposed respondent that the law has been violated as alleged in the draft complaint, or

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that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true.

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6. This agreement contemplates that, if it is accepted by the Commission, and if such

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acceptance is not subsequently withdrawn by the Commission pursuant to the provisions

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of Section 2.34 of the Commission’s Rules, the Commission may, without further notice

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to proposed respondent, (1) issue its complaint corresponding in form and substance with

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the attached draft complaint and its decision containing the following order in disposition

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of the proceeding, and (2) make information about it public. When so entered, the order

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shall have the same force and effect and may be altered, modified, or set aside in the

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same manner and within the same time provided by statute for other orders. The order

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shall become final upon service. Delivery of the complaint and the decision and order to

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proposed respondent’s address as stated in this agreement by any means specified in

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Section 4.4(a) of the Commission’s Rules shall constitute service. Proposed respondent

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waives any right it may have to any other manner of service. The complaint may be used

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in construing the terms of the order. No agreement, understanding, representation, or

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interpretation not contained in the order or the agreement may be used to vary or

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contradict the terms of the order.

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7. Proposed respondent has read the draft complaint and consent order. It understands that

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it may be liable for civil penalties in the amount provided by law and other appropriate

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relief for each violation of the order after it becomes final.

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ORDER

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DEFINITIONS

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For purposes of this order, the following definitions shall apply:

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1. “Personally identifiable information” or “personal information” shall mean individually

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identifiable information from or about an individual including, but not limited to: (a) a

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first and last name; (b) a home or other physical address, including street name and name

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of city or town; (c) an email address or other online contact information, such as an

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instant messaging user identifier or a screen name that reveals an individual’s email

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address; (d) a telephone number; (e) a Social Security number; (f) a persistent identifier,

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such as a customer number held in a “cookie” or processor serial number, that is

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combined with other available data that identifies an individual; or (g) any other

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information from or about an individual that is combined with any of (a) through (f)

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above.Page 3 of 7

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2. Unless otherwise specified, “Respondent” shall mean Gateway Learning Corporation and

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its successors and assigns and its officers, and its agents, representatives, and employees.

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3. “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act,

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15 U.S.C. § 44.

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I.

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IT IS ORDERED that Respondent, directly or through any corporation, subsidiary,

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division, or other device, in connection with the collection of personal information from or about

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an individual, shall not misrepresent in any manner, expressly or by implication:

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A. That Respondent will not sell, rent, or loan to third parties such personal

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information;

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B. That Respondent will not provide to any third party personal information about

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children under the age of thirteen; 

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C. The manner by which Respondent will notify consumers of changes to its privacy

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policy; or 

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D. The manner in which Respondent will collect, use, or disclose personal

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information. 

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II.

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IT IS FURTHER ORDERED that Respondent, directly or through any corporation,

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subsidiary, division, or other device, shall not disclose to any third party any personal

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information collected on the www.hop.com Web site prior to the date Gateway posted its revised

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privacy policy permitting third-party sharing (June 20, 2003), unless Respondent obtains the

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express affirmative (“opt-in”) consent of the consumers to whom such personal information

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relates. 

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III.

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IT IS FURTHER ORDERED that Respondent, in connection with the posting of any

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privacy policy that contains a material change from the previous version of the policy, shall not

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apply such changes to information collected from or about consumers before the date of the

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posting, unless Respondent obtains the express affirmative (“opt-in”) consent of the consumers

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to whom such personal information relates. 

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IV.Page 4 of 7

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IT IS FURTHER ORDERED that within five (5) days of the date of service of this order,

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Respondent, its successors and assigns, shall pay $4,608 to the United States Treasury as

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disgorgement. Such payment shall be by cashier’s check or certified check made payable to the

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Treasurer of the United States. In the event of any default in payment, which default continues

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for more than ten (10) days beyond the due date of payment, Respondent shall also pay interest

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as computed under 28 U.S.C. § 1961, which shall accrue on the unpaid balance from the date of

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default until the date the balance is fully paid.

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V.

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IT IS FURTHER ORDERED that respondent Gateway Learning Corporation and its

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successors and assigns shall, for a period of five (5) years after the date of issuance of this order,

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maintain and upon request make available to the Federal Trade Commission for inspection and

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copying a print or electronic copy of all documents demonstrating their compliance with the

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terms and provisions of this order, including, but not limited to:

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A. a sample copy of each different privacy statement or communication

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relating to the collection of personally identifiable information containing

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representations about how personally identifiable information will be used

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or disclosed. Each Web page copy shall be dated and contain the full

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URL of the Web page where the material was posted online. Electronic

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copies shall include all text and graphics files, audio scripts, and other

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computer files used in presenting the information on the Web; provided,

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however, that after creation of any Web page or screen in compliance with

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this order, Respondent shall not be required to retain a print or electronic

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copy of any amended Web page or screen to the extent that the

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amendment does not affect Respondent’s compliance obligations under

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this order;

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B. a sample copy of each different document relating to any attempt by

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Respondent to obtain the express affirmative (“opt-in”) consent of

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consumers and copies of any documents demonstrating such consent

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provided by consumers, as required by Parts II and III of this order; and

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C. all invoices, communications, and records relating to the disclosure of

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personally identifiable information to third parties.

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VI.

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IT IS FURTHER ORDERED that respondent Gateway Learning Corporation and its

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successors and assigns shall deliver a copy of this order to all current and future principals,

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officers, directors, and managers, and to all current and future employees, agents, and

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representatives having responsibilities with respect to the subject matter of this order. 

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Respondent shall deliver this order to such current personnel within thirty (30) days after thePage 5 of 7

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date of service of this order, and to such future personnel within thirty (30) days after the person

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assumes such position or responsibilities.

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VII.

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IT IS FURTHER ORDERED that respondent Gateway Learning Corporation and its

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successors and assigns shall notify the Commission at least thirty (30) days prior to any change

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in the corporation(s) that may affect compliance obligations arising under this order, including,

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but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the

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emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or

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affiliate that engages in any acts or practices subject to this order; the proposed filing of a

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bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with

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respect to any proposed change in the corporation about which a respondent learns less than

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thirty (30) days prior to the date such action is to take place, the respondent shall notify the

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Commission as soon as is practicable after obtaining such knowledge. All notices required by

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this Part shall be sent by certified mail to the Associate Director, Division of Enforcement,

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Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

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VIII.

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IT IS FURTHER ORDERED that respondent Gateway Learning Corporation and its

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successors and assigns shall, within sixty (60) days after service of this order, and at such other

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times as the Federal Trade Commission may require, file with the Commission a report, in

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writing, setting forth in detail the manner and form in which it has complied with this order.

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IX.

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This order will terminate twenty (20) years from the date of its issuance, or twenty (20)

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years from the most recent date that the United States or the Federal Trade Commission files a

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complaint (with or without an accompanying consent decree) in federal court alleging any

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violation of the order, whichever comes later; provided, however, that the filing of such a

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complaint will not affect the duration of:

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A. Any Part in this order that terminates in less than twenty (20) years;

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B. This order’s application to any respondent that is not named as a defendant in

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such complaint; and

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C. This order if such complaint is filed after the order has terminated pursuant to this

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Part.

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Provided, further, that if such complaint is dismissed or a federal court rules that a respondent

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did not violate any provision of the order, and the dismissal or ruling is either not appealed or

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upheld on appeal, then the order will terminate according to this Part as though the complaintPage 6 of 7

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had never been filed, except that the order will not terminate between the date such complaint is

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filed and the later of the deadline for appealing such dismissal or ruling and the date such

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dismissal or ruling is upheld on appeal.

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Signed this __________day of _____________________________ , 2003.

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GATEWAY LEARNING CORPORATION

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By: _______________________________________

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JEAN MCKENZIE, 

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President

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_______________________________________

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D. REED FREEMAN, JR.,

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Collier Shannon Scott, PLLC

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Counsel for Respondent Gateway Learning

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Corporation Page 7 of 7

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FEDERAL TRADE COMMISSION

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_______________________________________

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LAURA MAZZARELLA

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LORETTA GARRISON

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Counsel for the Federal Trade Commission

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APPROVED:

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______________________________

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JOEL WINSTON

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Associate Director

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Division of Financial Practices

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______________________________

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J. HOWARD BEALES, III

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Director

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Bureau of Consumer Protection

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Annotated Text Information

August 20, 2014

In re Gateway Learning Corp., FTC Docket No. C-4120 (2004) (consent order).

In re Gateway Learning Corp., FTC Docket No. C-4120 (2004) (consent order).

Author Stats

mrisch

Professor of Law

Villanova University School of Law

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