FTC’s Chopra Suggests Executive Penalties, Firings for Data Abuse

The FTC should be able to levy “real” penalties, like forcing executive firings, to deter FTC order violations and data misuse, Commissioner Rohit Chopra said Thursday. “When we find blatant misconduct, settling that for a no-money, no-consequences order, I worry that that’s just a green light for other market participants to say, ‘Hey -- there’s no downside even if we get caught, except for maybe a day of press,'” he said at a Capitol Forum event. Some experts at the event also said they expect the U.S. Court of Appeals for the D.C. Circuit to affirm a lower court’s approval of AT&T’s buy of Time Warner, but that the deal nonetheless poses competitive dangers (see 1812130004).

“When companies look at the consequences of violating orders, obviously that could have implications for the executives involved,” said Competition Bureau Director Bruce Hoffman. He noted some of that is addressed through corporate guidelines.

On data breaches, Chopra said the ability to fine firms on first offense is going to “be critical and will create some honesty in the market.” Groups and lawmakers sought FTC civil penalty authority in any potential federal data privacy bill. FTC orders “are not suggestions,” the Democratic commissioner said, echoing previous remarks (see 1805150051). For the tech sector, there’s a “very blurry line between consumer protection and antitrust, particularly with how data is used or misused. So I think there’s always more we can do with respect to remedies on consumer protection,” he said.

Center for Democracy and Technology called for a federal, pre-emptive data privacy law granting the FTC rulemaking and civil penalty authority. Thursday's proposal urges joint enforcement from the FTC and state attorneys general and would transfer Communications Act privacy and security enforcement responsibilities from the FCC to the FTC. It includes user rights to correct, delete and port personal data, and subjects nonprofits to FTC enforcement.

Congress shouldn't support a pre-emptive data privacy law that isn’t as strong as laws in California, consumer and privacy groups wrote Congress Thursday. The Electronic Frontier Foundation, Electronic Privacy Information Center, Public Citizen and Consumer Watchdog signed. “US privacy laws typically establish a floor and not a ceiling,” they wrote.

Ongoing FTC competition policy hearings will lead to reports on tech sector concerns in spring or early summer, Hoffman said. One key concern is that a few tech companies have controlled large market shares for a long period of time, he said, citing Google, Facebook, Amazon, Apple and Netflix as potential examples. It has been some time since Google defeated Yahoo and Facebook defeated MySpace, he said, and there are questions whether antitrust policy is to blame. Deals like Facebook’s buy of WhatsApp and Instagram need to be scrutinized, he said: There are other questions on whether data accumulation provides insurmountable advantages and allows incumbents to kill off competitors.

Chopra was asked about the prospect of a government shutdown and the impact on the FTC. “I don’t know what the likelihood is [of a shutdown], but of course during shutdowns, like other agencies, there are certain personnel that are not able to conduct their business,” he said. “So that’s certainly a disruption to an agency that primarily uses human resources to do our job.”

Chopra was asked about headline-grabbing fines from European agencies (see 1810170039). Chopra said he pays close attention to action taken by European enforcers, which helps agencies hold the tech sector accountable. What European officials uncover should factor into U.S. enforcers’ approach, and vice versa, he said.