FTC chief: On-demand economy may need 'targeted' regs

The chairwoman of the Federal Trade Commission said Friday that on-demand economy companies like Uber and and Airbnb may require “targeted regulatory measures” to protect consumers.

FTC Chairwoman Edith Ramirez cautioned that regulators should be careful not to over-regulate the growing businesses, and argued that a balance needs to be struck.

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“We must allow competition and innovation in the form of these new peer-to-peer business models to flourish,” she said while speaking at an antitrust conference hosted by Fordham University School of Law in New York, according to the prepared text of her speech. “At the same time, where necessary, targeted regulatory measures may be needed to ensure that these new business models have appropriate consumer protections; but they should be no greater than necessary to address those concerns.”

She said that the rise of the on-demand economy had raised “complex and challenging public policy questions” about how to regulate the companies in a way that allowed them to thrive without disadvantaging long-time players in sectors like lodging and transportation that have said on-demand economy companies aren't regulated heavily enough.

“I would suggest that picking winners by creating a regulatory differential in favor of new entrants should be just as undesirable as retaining regulations that deter meaningful entry,” Ramirez said.

The commission is still reviewing the thousands of comments associated with a June workshop about the on-demand economy, Ramirez said. An FTC official said the agency has not yet settled on whether to issue guidelines for businesses in the on-demand economy, as it has done in other areas.

Ramirez is not the only commissioner to indicate that regulators should take a gentle approach to regulating the growing sector. Republican Commissioner Maureen Ohlhausen emphasized at the June workshop that “interest in new developments in the economy by the FTC does not automatically portend a flurry of future enforcement actions.”

But Ramirez's comments are the latest evidence that regulators and lawmakers in Washington are warming to the idea of confronting the challenges posed by the on-demand economy.

Sen. Mark Warner (D-Va.) has said that Congress needs to find ways to build a stronger safety net for workers in the on-demand economy, many of whom lack access to certain benefits because of their status as independent contractors. However, he has also called for a “regulatory time-out” to give the companies time to experiment with their own approaches to protecting workers.

On Tuesday, a subcommittee of the House Energy and Commerce Committee held a hearing where members questioned advocates for the on-demand economy about the need for consumer protections.

The hearing also reflected a wariness among many on the right toward regulating the on-demand economy that has been particularly prevalent on the campaign trail this year, with many presidential candidates saying that regulations would stifle innovation and growth.

“At a time when jobs are still hard to find and balancing the budget is a challenge, we should not risk job creation with hasty calls to regulate,” said full committee Chairman Fred Upton (R-Mich.) at the hearing.