FTC’s Phillips Supports Privacy Jurisdiction Over Common Carriers

The FTC should have privacy enforcement authority over common carriers, Commissioner Noah Phillips said Monday. Whether online platforms should be considered common carriers for purposes of speech and First Amendment issues is a “very active debate” before Congress and the courts, he told the Hudson Institute.

Conversations about speech issues and common carrier designations are just beginning, Phillips said, citing the rapidly evolving media landscape. But on privacy, he said the agency has the experience that warrants jurisdiction over common carriers. The agency has repeatedly urged Congress to repeal the telecom common carrier exemption (see 2107270050).

Further shifting antitrust policy at the FTC could cause friction with DOJ, said Phillips, describing how the commission is considering issuing antitrust rules in response to President Joe Biden’s executive order. He said he doubts FTC authority to do so, noting DOJ doesn’t even “believe they have this power.” The EO includes language in favor of rules but “next to no consideration” of what it would mean for the FTC to implement a rulemaking that DOJ can’t, he said: Agencies don’t always agree on antitrust, and this could “make that mess even messier.” He noted the agency promulgated only one rule on competition since 1915, in 1968 on the relationship between clothing manufacturers and retailers.

The EO includes some good aspects, Phillips said, citing issues with occupational licensing. The EO is problematic because it encourages adoption across the board of new regulation, he said. The theory of regulation is that it will promote competition, but often regulation chokes competition, he said. The order is based on the presumption that the FTC has a lot of regulatory authority to make competition rules, and the FTC Act doesn’t support that, he said.

Phillips said he has no problem with Biden’s call for new transaction review guidelines. He hopes the agency will base any new guidance on empirical evidence, he said: There’s a lot of “taking down the old” without guidance on what “the new will look like.”

The EO encourages the agency to “bust up more mergers that are consummated,” he said. The commission should follow up on transactions only if there’s a reason to believe there’s a problem, he argued: Deal enforcement is becoming less efficient and less fair due to some changes since the EO. The Hart-Scott-Rodino Act gives companies reasonable assurance for future plans, he said, warning about the impacts of removing HSR guidance. “What we’re introducing is an inefficiency in the market for transactions we have no interest in pursuing just for the sake of it,” he said. “That’s a problem. I think it makes us less efficient.”

Phillips addressed the loss of Section 13(b) authority (see 2106210054). The agency should have an “efficient way” to return ill-gotten funds from fraudsters to consumers, he said, but 13(b) authority needs guardrails.