FTC Chair Calls for Modern Federal Privacy Law

LAS VEGAS — The Federal Trade Commission (FTC) has effectively taken enforcement actions against companies that violate antitrust, anticompetitive, and privacy laws, but the nation is long overdue for a more modern law on the books, FTC Chair Joseph Simons argued at CES 2020. LAS VEGAS — The Federal Trade Commission (FTC) has effectively taken enforcement actions against companies that violate antitrust, anticompetitive, and privacy laws, but the nation is long overdue for a more modern law on the books, FTC Chair Joseph Simons argued at CES 2020. “As we get further and further into the digital age, privacy concerns are obviously becoming more important, seemingly almost by the minute. And up to now, our primary privacy statute is a 100-year-old piece of legislation called the FTC Act,” he said. “I think it really is time for Congress to think about whether we should do something more modern. We’ve got a situation where the states are becoming very active, California is already in effect, and we should see whether it makes more sense to have a federal statute in some way and how that interacts with the states,” Simons said. “We think it’s time.” California’s new privacy law, the California Consumer Privacy Act, took effect this year and gives residents the right to learn what data companies collect about them. It also gives people the right to ask for their data to be deleted and not sold to others. FTC staff has engaged with members of Congress about implementing privacy legislation in a way that doesn’t reduce competition, Simons said. “One of the things we’re particularly worried about is legislation that would essentially entrench the big, dominant tech platforms and disadvantage the new players… There’s actually some evidence that GDPR (the European Union’s privacy law) is in fact having that impact.” It’s “not by chance” that most of the major internet platforms are based in the United States, he said. “I think our economic environment is conducive to that kind of growth, and so I think that’s why you see that over here and you don’t see it in other places.” Simons reiterated that the FTC doesn’t go after companies simply because they’re large and successful. “They actually have to commit an antitrust violation,” he said. “We don’t just break companies up because they’re big. We think that’s very bad policy.” If companies are required to obtain opt-in consent for every piece of personal information, it can dramatically impact the effectiveness of advertising and the ability of new entrants to gain access to data without doing it themselves, Simons argued. Moreover, he doesn’t agree with the idea that this would require a new federal privacy regulator, calling that “a huge mistake.” He claimed that the FTC is the “most active privacy enforcer on the planet and we’re doing that with that 100-year-old statute.” For the last two decades those actions have largely been driven by best practices and companies’ own privacy policies, Simons explained. “If you have a published privacy policy and you deviate from it in a significant way, then we can launch an enforcement action to stop that from happening and make sure you’re disclosing what you’re supposed to be disclosing,” he said. “The big tech platforms are becoming so consequential to our lives and so large that as an antitrust enforcer those are the areas you worry about where anti-competitive conduct could be occurring and those are areas which are fertile grounds for antitrust investigations,” Simons added. Indeed, Simons’ proudest achievements at the FTC to date include the $5 billion settlement it reached with Facebook and the $170 million settlement it reached with YouTube last year over those companies’ respective privacy practices. “Those settlements imposed requirements that are far and away greater than what the law itself requires, including transparency requirements… If they continue to do what they were doing in the past, and violate the privacy laws then they can expect that the repercussions will be even more severe.” Further enforcement could be on the horizon this year. He noted that the FTC’s Technology Enforcement Division is currently investigating Facebook for potential antitrust violations and there are other investigations underway as well.