FTC fines Razer for every cent made selling bogus “N95 grade” RGB masks

“[Razer] falsely claimed, in the midst of a global pandemic, that their face mask was the equivalent of an N95 certified respirator,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement.

Razer never got the Zephyr tested by the National Institute for Occupational Safety and Health or the US Food and Drug Administration and the Zephyr never received N95 certification.

The FTC’s complaint against Razer, which is best known for high-priced, RGB-riddled PC gaming peripherals, claimed that Razer continued promoting the Zephyr despite consultants highlighting the mask’s lack of certification and protection.

Razer reportedly refunded fewer than 6 percent of Zephyr purchases in the US.

However, the proposed settlement against Razer includes a $100,000 civil penalty, plus $1,071,254.33, which the FTC said is equal to the amount of revenue Razer made from the Zephyr and will go toward refunding “defrauded consumers.”

SeaJ,

Fine them múltiples of whatever money they made from this. The only way companies stop doing things like this is if fine multiplied by the probability of being caught is more than what they stand to gain. Otherwise it is just a cost of doing business.

Maeve,

"Go toward" but never actually get there.

Subverb,

Razer designing and selling a piece of medical equipment is an idea that should never have survived the brainstorming session.

Serra,

As far as I am aware Naomi Wu was one of the first people to file an FTC complaint. She has a video about the mask on YouTube.

Sadly she is being silenced by the Chinese government. Probably because she reported privacy problems with smartphone keyboards. Privacy that can be very important. For example if you are LGBT and your partner is of the Uyghur minority.

JakenVeina,

I feel like this is the first time I’ve EVER heard of a fine being “all the profits you made from the fraud.” Is this for real? Why the hell is it Razer, of all companies, that’s getting a proper punishment?

RecluseRamble,

It says revenue, not profit, so even better.

jkrtn,

Good start but still not enough.

abhibeckert,

Here in Australia it’s standard practice to use “how much profit did you make” as the basis for a fine against a corporation.

Except we normally multiply that number by 3x or 5x in order to make it properly punitive.

The upside is companies tend to obey the law. The downside is every now and then an honest mistake ends in bankruptcy. And in fact, most people fined are making a mistake, because why would any corporation take on that much risk intentionally?

I’m OK with all the fines being a bit unfair. If you’re incompetent then GTFO of the market and allow someone who does a better job to replace you.

trolololol,

That’s not a downside, that’s consequences of their mistakes. If they’re not caught, honest mistake or not, they’re not giving it back to the community.

psycho_driver,

In the US companies will knowingly do shitty things and break established rules and laws if they feel the profit will outweigh the resulting fines. It happens all the time.

Sometimes they will just have people killed too and face zero repercussions.

P1nkman,

It’s the cost of doing business. Hell, if I could rob a bank for 10 million dollars, and the fine was a million dollars (or 9 million), I’d probably do it too!

If the cost for breaking the law is a set amount, it technically only affects poor people. There’s a rich guy in Bergen, Norway who received more than 50 parking fines in less than a year, because for him, the fine is the parking cost. It would be like I’d pay 1 cent for parking wherever I want. I wish the government would be able to take away his driver’s license for this. He’s also blocked trans from being able to continue their drive. Fucking asshole.

ColeSloth,

Is that gross, or net, sales revenue? It’s a small enough number I’m guessing it’s net, which means their “punishment” is nothing more than they didn’t make any profit, but also didn’t lose any. Big woop.

xthexder,
@xthexder@l.sw0.com avatar

The article says revenue near the end. I find that a little hard to believe though, unless they sold barely any of them.

ColeSloth,

Yes, but there’s two tours of “revenue”. There’s net revenue, and there’s gross revenue. One is how many dollars worth they sold, and the other is how much they actually profited from it.

xthexder,
@xthexder@l.sw0.com avatar

I think you’re confusing net income with net revenue. As far as I know, net revenue is just gross revenue minus discounts and refunds. All other expenses such as cost of materials are then subtracted after that to get net income (their actual profit).

Either way, revenue represents how much money they actually received from customers.

ColeSloth,

Yes, exactly. Except you’re wrong.

investopedia.com/…/what-are-difference-between-gr…

There are many other links. That one I just grabbed from top spot of Google search when I typed in “net revenue”.

KairuByte,
@KairuByte@lemmy.dbzer0.com avatar

They likely sold barely any of them. They were nigh impossible to get during the pandemic, and virtually no one wanted them after the fact.

AlligatorBlizzard, (edited )

Also they were rather expensive, even if they had done what they claimed to. They became more available about the same time you could get N95s easily. I’m the kind of weirdo who thinks an RGB face mask would be cool, but I didn’t want to spend $150 (iirc) on one.

EDIT: based on comments on the article, they were $99. Still more than I’d want to spend on something this silly, but not that unreasonable - if the mask did what it said it did.

applepie,

After using their producta. This doesn't surprise me.

Who DA FAQ wants their accessories to collect telemetry ...

Rottcodd,
Rottcodd avatar

This shouldn't be an exception - it should be the rule.

At the very least, companies should be fined every single cent that they made off of something criminal, and really, they should be fined much more than they made.

If they're fined less than they made off of it, it's not even really a fine. It's just the government taking a cut of the action.

exanime,

Agreed… However I want to point out that in this case they are to return the revenue plus $100k fine. The fact they went after revenue (not profit) leaves Razer to carry the bag for the cost of production and distribution of the fraudulent crap they peddled.

This should be the deafult… In egregious cases, a fine should be applied on a multiplier basis, that is, your revenue is $1 million, you get a fine of x0.5 so you now must return $1.5 million… Eat the cost of all the stuff plus $500,000 fine (for example)

If the fraud was criminal, then do the fines AND include jail time

Basically, skirting or breaking the law should be a scary proposition… Presenting a shady business plan internally should result in people getting fired on the spot

jkrtn,

I want to see the jail time when they knowingly commit fraud which harms people more than the cost of the product. I’d like to see jail time for wage theft, too.

Rottcodd,
Rottcodd avatar

Nicely clarified.

Yes - the way I said it leaves the possibility that they have to pay at minimum their profit, and no - that should not be the case. They should have to pay at minimum their total revenue.

thoralf,
@thoralf@discuss.tchncs.de avatar

I’m more surprised that anyone bought this nonsense.

Veraxus,

Holy cow, I tried to buy one of these. Glad I wasn’t able to. I thought “Yeah, why not lean into the cyberpunk dystopia look, right now?”

Little did I realize that it was a product of a literal cyberpunk dystopia. Corpos, man.

brotkel,

Yeah, I was on the fence and now I wish I had bought it. I’d still get my money back and I’d have a cool cosplay prop.

db2,

Now start fining hedge funds and big banks the same way. What garbage.

TheHotze,

I like it, charge them more than what they made off of a dangerous product.

Drunemeton,
@Drunemeton@lemmy.world avatar

What a great look for such a deserving company.

Silinde,

A Razer product that doesn’t work as advertised? Consider me shocked.

Sabata11792,
Sabata11792 avatar

No, your honor, The filters worked but the users were not logged into the Razer software.

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