There's only one choice for FTC chair, and she's already got the job
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One of the most important and powerful agencies in Washington is the Federal Trade Commission (FTC), which is specifically charged with protecting consumers from both deceptive practices and unfair methods of competition under Section 5 of its eponymous FTC Act.

To his credit, President Trump has appointed sitting Commissioner Maureen Ohlhausen as acting chair of the FTC. Given all of the things on the FTC's plate, Trump would be wise to make Ohlhausen's appointment permanent.

Like her newly appointed counterpart, Chairman Ajit Pai at the Federal Communications Commission (FCC), Ohlhausen is one of those few public servants who truly is a "lawyer's lawyer," with a profound respect for the bounds of her agency's statutory mandate.

Indeed, while often cast as a regulatory agency, the FTC is better described as a law-enforcement agency. And, given such great power, the FTC must wield it judiciously.

Unfortunately, under the Obama administration, the FTC's Democratic majority was hardly a model of government constraint.

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Ohlhausen, however, has a different philosophy. As Ohlhausen argued in a recent speech to the American Bar Association, unlike the Obama FTC that tended to focus on speculative injury or on subjective types of harm, the better approach must be for the FTC to focus on practices that inflict a tangible "substantial harm" upon consumers.

 

Moreover, Ohlhausen does not want to take a subjective approach to substantial harm; as she rationally suggested recently at the State of the Net conference, before the agency brings further litigation, perhaps the FTC should develop a workable definition of "substantial harm" first?

Ohlhausen's rigorous analytical approach will be particularly crucial as the FTC tries to grapple in the coming months with the mess former FCC Chairman Tom Wheeler left over how the federal government should deal with digital privacy.

As I have noted multiple times in this space, the common currency of the Internet Age is information — that is, the ability to collect, track and ultimately monetize a plethora of information in order to provide consumers with enhanced online experiences.

Indeed, it is the ability to monetize information successfully that will encourage, at least in part, the investments by both the edge and core to support the bourgeoning internet of things and expand broadband deployment to all Americans.

Accordingly, the big policy question — as always — is how best to protect consumers' private information while not stifling innovation and broadband expansion.

Traditionally, the FTC has taken the lead on digital privacy. Yet, in a remarkable piece of regulatory hubris last year, the FCC under Wheeler took it upon itself to write its own set of draconian, ex ante privacy rules exclusively for broadband service providers, thus creating a dysfunctional asymmetrical privacy regime for a major sector of the internet ecosystem.

In so doing, it is now difficult, if not impossible, to formulate an industry-wide solution to an industry-wide problem.

The good news is that Ohlhausen and Pai have a close relationship forged in the fire after having provided principled conservative responses to the Obama administration's regulatory excesses. Trump would be wise to recognize the importance of this relationship as we try to fix the Obama administration's mess and bring a cohesive policy approach to digital privacy.

Like Pai, Ohlhausen needs no training. She will be able to implement thoughtful policy on day one. But that is not all.

Not satisfied with the intellectual status quo, Ohlhausen stated in a recent speech that one of her major priorities over the next few months would be to deepen the FTC's understanding of the complex economics of digital privacy, particularly the relationship between access to consumer information and innovation.

As a genuine respect for economics is in very short supply in Washington policy circles — although lip service regrettably is always in abundant supply — it's important for us to give credit where credit is due.

Finally, Ohlhausen will be fair. While it was an open secret in Washington that the Obama administration would go out of its way to serve select pet political constituencies, Ohlhausen brings no such bias to the table. In her view, everyone is equal before the law.

So while Ohlhausen will work hard to reduce unnecessary regulatory burdens and provide additional transparency to businesses, one should not equate her philosophy of "regulatory humility" with being soft on those who would harm consumers. As Ohlhausen has bluntly stated on the record, "[i]f there's evidence of anticompetitive conduct and consumer harm, I want to hear about it."

Like it or not, the issues facing the FTC are complex and need to be approached with analytical rigor and honesty. President Trump has already made an excellent pick with Ajit Pai as chairman of the FCC. He should bookend the set by making Maureen Ohlhausen permanent chair of the FTC.

Lawrence J. Spiwak is the President of the Phoenix Center for Advanced Legal & Economic Public Policy Studies, a nonprofit research organization that studies broad public-policy issues related to governance, social and economic conditions, with a particular emphasis on the law and economics of the digital age.


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