FTC Working Fast on Probes Like Facebook, Chairman Says

The FTC’s goal is to reach the “right result” as fast as possible for privacy probes, Chairman Joe Simons testified when pressed by lawmakers for a timeline on the Facebook-Cambridge Analytica investigation. Simons wouldn't address specific cases during the first oversight hearing with all five new commissioners before the Senate Consumer Protection Subcommittee (see 1811230021). Hours earlier Tuesday, Facebook also faced heat at a multicountry hearing in U.K.'s House of Commons (see 1811270014).

Sen. Catherine Cortez Masto, D-Nev., became the latest lawmaker to announce work on a privacy bill (see 1811140053). She told us she hasn’t lined up a Republican partner but is working on the draft now, before announcing her bill at the hearing. Ranking member Richard Blumenthal, D-Conn., who previously introduced a bill with Sen. Ed Markey, D-Mass., said for his additional privacy bill, he’s working with Chairman Jerry Moran, R-Kan.

“I’m anxious to see what [the FTC’s] game plan is as it relates to privacy,” Moran told us before the hearing. “Everything I know to date tells me the FTC is working well together.” Outgoing Senate Commerce Committee Chairman John Thune, R-S.D., told reporters he's “anxious to engage in that discussion, and hopefully there will be some ideas put forward on which they can agree.”

Moran and Blumenthal pressed Simons for a timeline on the Facebook probe. Blumenthal said the FTC has “fallen short on confronting pressing challenges, sometimes because the commission lacks the sufficient tools, but too often the problem seems to be a lack of will.” Congress is fed up with big tech telling Americans to trust us, he added. Simons told Blumenthal the FTC’s goal is to turn around his opinion about enforcement efforts.

Asked if the agency will publicize results of the Facebook probe when it concludes, Simons said, “I would think so.” He repeated his call for privacy legislation to grant the agency civil penalty authority, rulemaking authority and jurisdiction over nonprofits and common carriers. His Democratic colleagues have supported that call, and now the newest commissioner, Christine Wilson, said she’s on board. Commissioner Noah Phillips was the only member to hesitate on civil penalties, saying such authority can chill conduct that benefits consumers. All five commissioners said they support Congress repealing the common-carrier exemption.

Democratic Commissioners Rohit Chopra and Rebecca Kelly Slaughter said the agency lacks resources needed to carry out enforcement responsibilities. Cities expand, and they need more cops, and the FTC is the same, Chopra said. Everyone tells Congress they could use more resources, Moran said, but this situation feels real, saying he sympathizes with Chopra’s comment.

The FTC needs more resources as the U.S. economy is becoming more “digitized and complex,” said outgoing Senate Commerce ranking member Bill Nelson, D-Fla. The agency’s 1,000 employees can do only so much to police a $19 trillion economy, he added.

The agency should always be willing to litigate even the biggest companies with legions of lawyers, lobbyists and public relations experts, Chopra said. Simons said the commission could use more resources for litigation, since that staff is “almost killing itself,” and within the Economics Bureau and Office of Technology Research and Investigation. The agency works nimbly and efficiently, though, Phillips noted. He called privacy a nebulous concept and warned against new rules that will have tradeoffs for consumers and competition. He cited the EU’s general data protection regulation’s impact on innovation.

The GDPR is a “natural experiment for us to take benefit of” and learn from, Simons told reporters. “Is it having an impact on competition? Is it entrenching some of the digital platforms? Is it causing advertising to shift toward the big platforms like Google? Things like that. We’re studying that closely.”