FTC plans to reexamine how it polices tech companies

FTC plans to reexamine how it polices tech companies
© Greg Nash

The new head of the Federal Trade Commission (FTC) wants to review how the consumer protection and antitrust agency polices companies like major tech platforms, promising “vigorous enforcement” of Silicon Valley.

Joseph Simons, who was sworn in as FTC chairman last month, on Wednesday announced that he would convene a series of public hearings later this year to examine whether changes in the economy prompted by the rise of tech giants might necessitate changes in how regulators carry out enforcement.

“Beginning in the fall and continuing through January, the commission is going to hold a series of multi-day, multi-part public hearings to help us evaluate our policy and enforcement efforts to see if they need modification and if so what that might look like,” Simons, a Republican, told reporters Wednesday.

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The program is modeled on a series of hearings that former FTC Chairman Robert Pitofsky held in the ’90s, which led the agency beefing up its policies on competition and consumer protection.

The FTC is inviting the public to submit comments on a list of topics it plans to address in the 15 to 20 hearings to be announced.

The hearings will focus on topics including internet privacy, big data and platform companies’ market power.

Simons says that he plans to keep an open mind going into the project and that he wants to examine whether the existing laws and the FTC’s regulatory authority are sufficient in a rapidly changing economy.

If not, he says he’s prepared to ask Congress for new legislation.

“There are a lot of big questions these days about competition and consumer protection, and the @FTC is ready to tackle them head on,” Rebecca Slaughter, a Democrat on the commission, said on Twitter. “I'm proud to support this great project @JoeSimonsFTC announced this morning, and encourage everyone to get involved and make their voices heard.”

The hearings also come as the agency has faced increasing pressure to revamp its oversight of the tech industry.

Recent months have seen a series of internet privacy scandals, topped by the Cambridge Analytica controversy, in which the political consulting firm obtained data on 87 million Facebook users without their knowledge or consent.

It also comes at a time when companies like Facebook, Google and Amazon face intense scrutiny over the effects of their market dominance.

“Every so often there’s some very disruptive thing that happens in the economy, and we want to take a look and see what does that mean for antitrust enforcement,” Simons said Wednesday.

Regulators abroad in recent years have also stepped up enforcement and antitrust actions against U.S. tech companies. That's led many privacy and consumer advocates to worry the FTC is lagging behind on enforcement.

In 2011, the agency signed a consent decree with Facebook over data privacy to settle charges the company failed to protect customers' information.

The agency is now investigating whether Facebook broke those terms in its handling of data shared with Cambridge Analytica.

Many critics see that as a test case and question whether the FTC is actually equipped to enforce the many consent agreements it has with tech companies.

“This should have never happened,” Sen. Richard Blumenthal (D-Conn.) wrote to the agency in April after the scandal was revealed.

“It is time for the FTC to thoroughly and rigorously reassess Facebook’s privacy practices and put into place rules that finally protect consumers.”

Simons is also taking over the agency in the wake of the Federal Communications Commission's decision to repeal its net neutrality rules, meaning that the authority to police the broadband industry will now be shifted back to the FTC.

Critics have questioned whether the FTC has the enforcement powers to take on the country's broadband giants.

The chairman on Wednesday promised to go after any internet service providers that abuse their power over users’ web experience.

“We’re actively looking, and if it turns out that some of the broadband providers are engaged in anticompetitive activities we will be all over it,” he said.

The agency’s 2012 decision to let Google off the hook after an antitrust investigation has also received new scrutiny in the wake of the European Union’s decision to hit the internet giant with a record $2.7 billion fine last year for anticompetitive search practices.

At least one member of Congress, Rep. Keith EllisonKeith Maurice EllisonDemocrats must stand up for Israel Ilhan Omar calls her election to Congress a rejection of ‘religious bigotry’ Minnesota New Members 2019 MORE (D-Minn.), has asked the commission to open a new investigation into Google.

Simons wouldn’t comment on any individual cases before the FTC but said that his concerns about tech platforms preceded the Cambridge Analytica scandal.

“It’s the network effects,” Simons said. “It’s the fact that they’re a two-sided platform. It’s the interaction between privacy and competition. And it’s all new so it makes it very appropriate to have this be the subject of hearings and get input on that.”

Updated at 4:16 p.m