FTC Seeks New Privacy Authority

Ramirez said in fiscal year 2013, the agency brought 72 new consumer protection complaints in federal district court and obtained 100 permanent injunctions and orders, forcing defendants to pay $198 million in consumer redress or disgorgement of ill-gotten gains. Last year, the agency also brought 27 new competition law enforcement actions ' and closed 37 investigations where no threat to competition was found.

'The FTC has worked to keep pace with the vast changes of the past 100 years, including those resulting from technological advances and our increasingly global economy,' Ramirez said. 'The agency must remain nimble to anticipate and respond to future marketplace changes and other challenges.'

The FTC was created when President Woodrow Wilson signed the FTC Act and the Clayton Act in 1914 ' the same year the Panama Canal opened and the air conditioner was patented, Rep. Pete Olson (R-TX) noted at the hearing. Over the years, the agency's docket has evolved, with privacy emerging as a major issue. Ramirez told committee members that she supports enactment of 'baseline' federal privacy legislation. 'There are limits to what the FTC can do under our authority,' she said. 'We can't do everything when it comes to privacy.'

In response to a series of questions from Rep. John Dingell (D-MI), some of the contours of potential legislation became clear.

Ramirez said she favors making the FTC the sole federal agency in charge of enforcing a uniform set of national data breach notification requirements. Such requirements would compel businesses to notify consumers of a data breach promptly, and also to notify credit bureaus. The FTC has urged Congress to give the agency civil penalty authority against companies that fail to maintain reasonable security.

Ramirez also said she supported making the federal rules supersede state requirements ' and to make the rules enforceable by both the FTC and state attorneys general. Further, she said a violation of data breach requirements should be deemed an unfair or deceptive act in commerce, and thus subject to FTC authority under the FTC Act.

She also agreed such a law would provide a significantly greater level of consumer protection than that which now exists. Ramirez also said the FTC would not need more funding to enforce such requirements.

Dingell said he looked forward to writing a 'common sense law' to establish the standards.

Net Neutrality

The FTC's two Republican commissioners, Ohlhausen and Wright, urged Congress to give the FTC authority to oversee net neutrality. Net neutrality regulations by the Federal Communications Commission (FCC) barring Internet service providers from blocking websites are currently being challenged by Verizon Communications in the U.S. Court of Appeals for the D.C. Circuit.

Ohlhausen argued that giving FTC authority in this area 'would be in the public interest.' The agency by statute has no jurisdiction over communications common carriers.

This exemption 'frustrates effective consumer protection with respect to a wide variety of activities, including privacy, data security and billing practices,' Ohlhausen said. 'With the convergence of telecom, broadband and other technologies, I urge Congress seriously to consider removing this antiquated limitation on our jurisdiction and putting these competing technologies on an equal footing.'

Rep. Marsha Blackburn (R-TN) asked Wright why 'antitrust is a better way to address net neutrality concerns and why you think the FTC is the appropriate agency to handle' enforcement.

Wright responded that most net neutrality concerns 'involve what antitrust economists and lawyers call vertical agreements or vertical contracts between complement providers.'

Such arrangements have been scrutinized by the FTC for nearly 100 years, he continued, and the agency has 'developed a set of tools for identifying which of these agreements pose problems and actually harm consumers and which can be beneficial ' and quite a few can be beneficial to consumers rather than harm. So the FTC and the antitrust institutions generally I believe have a framework that from an analytical perspective is asking the right questions,' he said. 'That's a better framework.'

Jenna Greene is a Senior Reporter with the National Law Journal, an ALM affiliate of Internet Law & Strategy. She can be reached at [email protected].

The Federal Trade Commission (FTC) is about to turn 100, and agency leaders have some gift suggestions for Congress ' new privacy legislation plus a statutory change that would position the FTC as the net neutrality cop.

In Dec. 3 testimony during a House subcommittee hearing ' 'The FTC at 100: Where Do We Go From Here?' ' Chairwoman Edith Ramirez and fellow commissioners Julie Brill, Maureen Ohlhausen and Joshua Wright touted the 1,200-person agency's track record protecting consumers and safeguarding competition.

The FTC has saved consumers an estimated $3 billion in economic harm over the past three years, Ramirez told members of the Energy and Commerce's Committee's Subcommittee on Commerce, Manufacturing and Trade.

Ramirez said in fiscal year 2013, the agency brought 72 new consumer protection complaints in federal district court and obtained 100 permanent injunctions and orders, forcing defendants to pay $198 million in consumer redress or disgorgement of ill-gotten gains. Last year, the agency also brought 27 new competition law enforcement actions ' and closed 37 investigations where no threat to competition was found.

'The FTC has worked to keep pace with the vast changes of the past 100 years, including those resulting from technological advances and our increasingly global economy,' Ramirez said. 'The agency must remain nimble to anticipate and respond to future marketplace changes and other challenges.'

The FTC was created when President Woodrow Wilson signed the FTC Act and the Clayton Act in 1914 ' the same year the Panama Canal opened and the air conditioner was patented, Rep. Pete Olson (R-TX) noted at the hearing. Over the years, the agency's docket has evolved, with privacy emerging as a major issue. Ramirez told committee members that she supports enactment of 'baseline' federal privacy legislation. 'There are limits to what the FTC can do under our authority,' she said. 'We can't do everything when it comes to privacy.'

In response to a series of questions from Rep. John Dingell (D-MI), some of the contours of potential legislation became clear.

Ramirez said she favors making the FTC the sole federal agency in charge of enforcing a uniform set of national data breach notification requirements. Such requirements would compel businesses to notify consumers of a data breach promptly, and also to notify credit bureaus. The FTC has urged Congress to give the agency civil penalty authority against companies that fail to maintain reasonable security.

Ramirez also said she supported making the federal rules supersede state requirements ' and to make the rules enforceable by both the FTC and state attorneys general. Further, she said a violation of data breach requirements should be deemed an unfair or deceptive act in commerce, and thus subject to FTC authority under the FTC Act.

She also agreed such a law would provide a significantly greater level of consumer protection than that which now exists. Ramirez also said the FTC would not need more funding to enforce such requirements.

Dingell said he looked forward to writing a 'common sense law' to establish the standards.

Net Neutrality

The FTC's two Republican commissioners, Ohlhausen and Wright, urged Congress to give the FTC authority to oversee net neutrality. Net neutrality regulations by the Federal Communications Commission (FCC) barring Internet service providers from blocking websites are currently being challenged by Verizon Communications in the U.S. Court of Appeals for the D.C. Circuit.

Ohlhausen argued that giving FTC authority in this area 'would be in the public interest.' The agency by statute has no jurisdiction over communications common carriers.

This exemption 'frustrates effective consumer protection with respect to a wide variety of activities, including privacy, data security and billing practices,' Ohlhausen said. 'With the convergence of telecom, broadband and other technologies, I urge Congress seriously to consider removing this antiquated limitation on our jurisdiction and putting these competing technologies on an equal footing.'

Rep. Marsha Blackburn (R-TN) asked Wright why 'antitrust is a better way to address net neutrality concerns and why you think the FTC is the appropriate agency to handle' enforcement.

Wright responded that most net neutrality concerns 'involve what antitrust economists and lawyers call vertical agreements or vertical contracts between complement providers.'

Such arrangements have been scrutinized by the FTC for nearly 100 years, he continued, and the agency has 'developed a set of tools for identifying which of these agreements pose problems and actually harm consumers and which can be beneficial ' and quite a few can be beneficial to consumers rather than harm. So the FTC and the antitrust institutions generally I believe have a framework that from an analytical perspective is asking the right questions,' he said. 'That's a better framework.'

Jenna Greene is a Senior Reporter with the National Law Journal, an ALM affiliate of Internet Law & Strategy. She can be reached at [email protected].