Tech Industry Focused on Compliance Due to Large Privacy Fines, Says FTC Chair

The threat of large fines in European and California privacy law focused the tech industry’s attention on compliance, FTC Chairman Joe Simons said Friday. His remarks to the American Bar Association came the day after U.S. District Court Judge Timothy Kelly approved the agency’s $5 billion privacy settlement with Facebook (see 1912050061).

Simons in an official statement noted the conduct relief included in the settlement “will require Facebook ‘to consider privacy at every stage of its operations and provide substantially more transparency and accountability for its executives’ privacy-related decisions.’”

The agreement “should serve as a roadmap for more comprehensive privacy regulation,” said Facebook Chief Privacy Officer-Product Michel Protti, noting the order led to a fundamental shift at the company.

The government must immediately verify Facebook has stopped breaking the law, said FTC Commissioner Rohit Chopra. He cited his no vote in the original settlement criticizing the deal’s “blanket immunity” for CEO Mark Zuckerberg, Chief Operating Officer Sheryl Sandberg and other executives. Commissioner Noah Phillips called the settlement a “big win for privacy and American consumers,” saying it didn’t address a host of policy-related concerns. The court “correctly noted” those concerns are largely up to Congress to resolve, he said. Commissioner Christine Wilson urged Congress to pass privacy legislation giving the agency “comprehensive authority over privacy and data security practices -- including civil penalty authority.”

DOJ’s Antitrust Division will make a major announcement in a criminal resolution next week, division Chief Makan Delrahim said during the ABA event with Simons and European Commissioner-Competition Margrethe Vestager.

U.S. enforcers can learn from European officials, Delrahim said, discussing T-Mobile/Sprint, which a group of state attorneys general challenged (see 1906110044). DOJ learned a lot about efficiencies and inefficiencies while approving the deal, and the European Union provides an example of a centralized agency that preempts other agencies in such decisions, he said. Conflicting remedies can throw off the certainty of any transaction when there are 52-plus “whacks at the pinata” in a transaction, he said.

Virginia was part of the coalition that challenged T-Mobile/Sprint. The courts didn’t successfully address how the parties overcame the presumption that the deal would lead to high concentration in several local markets, said Virginia Senior Assistant Attorney General Sarah Oxenham Allen.

If Congress adopts privacy legislation even remotely close to the EU’s general data protection regulation, the FTC will require a large increase in privacy resources, said Simons, noting European enforcers have far more resources.

Simons, Delrahim and Vestager insisted antitrust enforcement continues, despite the impacts of COVID-19. “This crisis shouldn’t be a shield to allow for mergers that would hurt consumers and hold back the recovery,” said Vestager.

Oxenham Allen credited the FTC and DOJ for coordinating with states. The entire National Association of Attorneys General Antitrust Multistate Task Force recently had a call with FTC Competition Director Bureau Ian Conner and NAAG state liaison Karen Berg about how states can best assist the FTC in antitrust, she said. Delrahim and DOJ front office staff contacted states personally, she added. States are basically following the lead of federal agencies about how to address the crisis, she noted.

DOJ was informed last week that one of the security guards at the main Justice Department building tested positive for COVID-19, said Delrahim, who had been going into the office daily until this week.

COVID-19 highlights the consumer protection issues for data and false or misleading representations, said Canadian Competition Bureau Commissioner Matthew Boswell. Misleading data results in bad purchases, so his division is continuing to enforce, he said, noting Canada’s consent decree with Amazon over pricing.