In 100th Year, FTC Should Limit Expansion Except on Common Carrier Regulation, Ohlhausen Says
Congress should give the FTC authority to regulate common carriers under its consumer protection authority, said Commissioner Maureen Ohlhausen. If the agency expands its authority anywhere, it should be there, she said Friday at a TechFreedom event commemorating the agency’s 99th birthday, at which she emphasized areas in which the FTC should limit its regulatory efforts. But the FTC has the antitrust and consumer protection authority as well as the tools to address issues in that area, she said. If the U.S. Court of Appeals for the D.C. Circuit strikes down the FCC net neutrality order, the FTC would “certainly” have the authority and tools to take up the issue, she said. Others have said that as well, if Verizon wins its case that was heard Sept. 9 (CD Sept 9 p1).
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Ohlhausen outlined her goals for the FTC’s 100th year, saying she hopes the agency will work in the next year to tie its enforcement goals more clearly to its mission to protect consumers. She said the FTC should stay focused on its core competencies in antitrust and consumer protection enforcement. She cautioned that if it uses authority under the “unfair methods of competition” authority granted it in the FTC Act, which she doesn’t advocate, it should “give a clear statement of what that means” to improve transparency and predictability.
Ohlhausen, who in 2009 as Office of Policy Planning director was one of the primary authors of the “FTC at 100” report, said the agency should seek that transparency and predictability in all things, to foster consumer protection but also to reduce uncertainty in the market. But she said she’s not against expanding the FTC’s authority in all cases. “One of the things we've seen is a really big change in how communications take place” since the FTC’s inception, she said. The common carrier exception “doesn’t really make sense anymore,” she said. Ohlhausen has supported that expansion, though other stakeholders have cautioned that the FTC’s case-by-case approach could make it an inadequate protector of open Internet.
The FTC is well-positioned to deal with communications and technology issues, and should continue to “keep up,” said Ohlhausen. Its hiring of a chief technologist was directly aimed at that goal, she said. In the same way it must keep up with new technology, the FTC has an important role in educating industry and consumers as technology changes, she said. “It’s one of the most important tools the FTC can bring to bear.” She pointed to workshops, studies, reports and investigation tools that can provide a greater understanding and promote communications between researchers, industry participants and consumers.
The FTC must also remain flexible in the face of changing technology, said Ohlhausen, pointing to a Geocities case the commission took up in the late 1990s. “It would very difficult and really unworkable now if we had defined at that time” what certain technological terms or parameters meant, she said. “Technology is always a year or so ahead of what we're doing” at the regulatory level. The idea of what constitutes unfairness doesn’t change over time, but the facts to which unfairness is being applied change, she said. “It’s too difficult to list all the practices that would be unfair. It has to be an evolutionary understanding.”
When it comes to data privacy and security, the FTC’s job “is to make sure consumers have the information they need to make decisions,” Ohlhausen said. Once they have made their choices, those choices should be respected, she said. The FTC should emphasize its educational and outreach efforts, she said, but shouldn’t tell consumers what choices to make or preempt their choices based on a preconceived notion of consumer safety. When it comes to data security, companies must take reasonable steps to secure consumer information, she said. “We're not expecting that you can withstand Tom Cruise hanging from a rope with the CIA,” she said. But in a lot of cases, “basic precautions aren’t being taken,” she said. An FTC-sponsored workshop could be helpful to improve clarity on what the organization expects from businesses with regard to securing data, said Ohlhausen. Self-regulation efforts within industry can be “a very useful supplement” to the FTC’s enforcement authority, she said. “If there’s self-regulation that’s robust, that has some enforcement backup, that has teeth, that’s something the FTC has been supportive of in a wide variety of areas.” She pointed to voluntary efforts in advertising and privacy.