The FTC Isn’t A Ghost Town Anymore. What’s Next?

Federal Trade Commission (FTC) can finally take down its vacancy sign. More than a year into Trump’s presidency, five new commissioners were approved by the Senate late last week.

The brand-new commission, comprising three Republicans and two Democrats, are tasked with tackling consumer protection and privacy at a time when consumers are more aware – and warier – than ever than about how their data is being used.

“There’s pressure on the FTC to be a strong check-and-balance to the online giants,” said Dave Grimaldi, EVP of public policy at the Interactive Advertising Bureau.

But what tone will the new commissioners take?

In light of the Equifax breach and Facebook’s Cambridge Analytica scandal, they’ll want to prove that they aren’t toothless or being too lax.

During Mark Zuckerberg’s testimony in early April, numerous members of Congress questioned whether the FTC has the proper procedural tools to be an effective cop on the beat, Grimaldi said.

For example, the FTC gave Facebook an all-clear during a mandated audit of its privacy policies in 2017, failing to uncover that Facebook knew about but didn’t disclose what had happened with Cambridge Analytica.

Expect the group to be vocal on the topics of data breach and the harms that can come from cavalierly using a consumer’s personal information, particularly related to financial services.

But don’t expect reactionary enforcement actions.

“The commissioners have a good mix of antitrust and business backgrounds,” said Dan Jaffe, group EVP of government relations at the Association of National Advertisers. “They’re likely to continue former chairman [Maureen] Ohlhausen’s insistence on solid data-based evidence and proof in harm in deciding when the FTC should impose sanctions.”

Who’s in the new crew?

This is the first time in recent memory that the FTC experienced 100% turnover between administrations.

Joseph Simons, a Republican and Trump’s pick for chairman, is a hardline antitrust attorney and a seasoned DC veteran who led the FTC’s competition bureau under George W. Bush. He’s well versed in how the commission functions, and he’s a familiar face to industry and privacy advocates, so he’ll be able to hit the ground running, Grimaldi said.

During his confirmation hearing in February, Simons told senators that he wouldn’t be opposed to breaking up big tech giants like Google and Facebook if they break antitrust laws.

The new chairman’s supporting cast is rounded out by two Republicans, Noah Phillips and Christine Wilson, and two Democrats, Rohit Chopra and Rebecca Slaughter.

Phillips and Slaughter, both former Senate staffers, are “substantive and shrewdly political,” Grimaldi said. Chopra, a former Consumer Financial Protection Bureau official, brings the consumer perspective. Wilson, a former Delta Airlines executive, comes with experience in industry and business.

Their backgrounds are diverse and the debate will likely be lively, but big rulings will probably break along party lines.

The Democrats “will be robust consumer advocates and push for strong oversight,” Grimaldi said, while “chairman Simons and his two Republican colleagues will need to demonstrate their independence from the Trump administration’s de-regulatory approach to industry and conduct investigations and enforcement proceedings with scrutiny and vigor.”

But can the FTC keep up with tech?

The FTC employs a chief technologist whose job is to keep commissioners in the loop on the inner workings of emerging online platforms.

Even so, regulating the privacy minefield around big tech platforms won’t be easy.

“While most markets innovate at a speed that makes it tough for regulators to keep up, technology is far and away the fastest and most challenging from an oversight perspective,” Grimaldi said.

But the incoming commissioners do have one major advantage: They can observe what happens in the General Data Protection Regulation (GDPR) test kitchen before advocating for any privacy changes of their own. GDPR is set to take effect in Europe in less than four weeks.

“Overly inclusive and overly restrictive rules are likely to miss the mark,” Jaffe said. “But all parties are going to be provided with a great deal of important information in the near future about the effectiveness of the privacy approach championed by the EU. This data will certainly provide all of us with a much better sense of what works and what may not in regard to regulation in this area."

 

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