Role of Tech, Data, Privacy Raised at FTC Hearing

Because technology is “part of every industry,” it is becoming “relevant in more and more matters” before the Federal Commission, including consumer protection in the areas of “cryptocurrencies, data throttling, online marketing, tech support scams, fintech — and even robocalls,” FTC Commissioner Rebecca Kelly Slaughter said today during opening remarks at the latest hearing in the agency’s series on competition and consumer protection in the 21st century.

“On the competition side, we have also long had to keep pace with technological advancement. We are seeing more and more mergers and conduct matters with technology-related issues such as data collection, intellectual property, and network effects. And as consumers become data commodities themselves, the nature of competition has been evolving as well,” Commissioner Slaughter said.

She said that “questions about competition and consumer protection no longer happen in isolation. Addressing a legal question on one side often has profound implications for the other.”

For example, in “a hypothetical merger between two companies that each control substantial consumer data; what are the privacy and security implications of that rollup? Consider also the consequences for consumers when limited competition means there is no meaningful choice about whether to patronize a company that may not prioritize user privacy,” she said.

“Policy changes on the consumer protection side have competition implications as well — how could effective data portability help facilitate entry and competition while sufficiently protecting privacy? Will new privacy regulations have the unintended consequence of stifling innovation and entrenching incumbents?” Commissioner Slaughter said.

The FTC’s “critical self-examination should not lead to a reaffirmation of everything we are already doing.  Reflection premised on changing conditions will inevitably uncover areas that are ripe for improvement. It is simply not plausible that a meaningful self-examination will lead to the conclusion that nothing should change,” she said.

“I am very open minded as to what that change should be, in terms of substance and magnitude. I also think it is important to consider both what should change operationally at the FTC today and what needs to be changed by Congress. Those inquiries are not mutually exclusive: we can both do better with our current toolbox and identify areas where we need to supplement it with additional authority or additional resources,” she added.

Later speakers, including Columbia University economics professor and Nobel Laureate Joseph Stiglitz and former FTC Chairman Bill Kovacic discussed issues such as the potential for ex ante rulemaking to approve the administrability of antitrust policy compared to developing policy through enforcement actions in individual cases; the role played by private rights of action in the antitrust area; the impact of vertical mergers on competition; and whether the reliance on a consumer welfare standard in competition policy needs to be changed.

Panelist and University of Chicago business professor Dennis Carlton said that the idea of rulemaking in the area of antitrust “makes me nervous.”

“What I am in favor of is that FTC and DOJ too should be doing studies … to inform how states and courts and maybe even Congress view competition issues,” he said.

Referring to one of the issues raised in Commissioner Slaughter’s opening remarks, Eric Citron of Goldstein & Russell, P.C., said, “If ownership over a lot of consumer data is going to allow you to distort the market, that’s a competition problem.”

New York University Law School professor Eleanor Fox suggested that it’s important to consider “whether Amazon is taking all this great data that it’s getting and preempting the next big idea that you can discern from knowing all that data.” —Lynn Stanton,

Courtesy TRDaily