FTC Majority Seeks Comment on Potential Privacy Rulemaking

The FTC voted 3-2 Thursday to seek public comment on a potential privacy rulemaking to address “mass surveillance,” data breaches, deception and manipulation, as expected (see 2204180049).

Chair Lina Khan emphasized that the agency is committed to following congressional direction on privacy, should lawmakers pass legislation, during a news conference with Democratic Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya . Slaughter and Bedoya endorsed the House Commerce Committee’s American Data Privacy and Protection Act (ADPPA) (HR-8152) during the conference. “It’s the strongest privacy bill that has ever been this close to passing,” Bedoya said. “I hope it passes. I hope it passes soon.” Bedoya said he won’t vote for any FTC rules that interfere with any new law from Congress: “I want to put at ease folks who are concerned that we would somehow try to issue rules that would conflict with” congressional legislation “in any way.”

Republican Commissioners Noah Phillips and Christine Wilson dissented and weren't at the virtual news conference. Phillips, who announced plans Monday to resign (see 2208090061), accused the majority of a “naked power grab.” Thursday's Advanced NPRM contemplates banning or regulating conduct the commission “has never once identified as unfair or deceptive,” Phillips said. The majority seems open to banning or “limiting” targeted advertising, for example, he said, noting the agency never brought a case alleging targeted ads are unfair. Major privacy tradeoffs are best left for Congress to decide, said Phillips: The FTC isn’t a “legislature.”

“I have zero confidence” Khan will lead a rulemaking process that guards “against improper overreach and harm to the agency, and ultimately consumers, given her actions as @FTC Chair and public statements,” Wilson tweeted. Many practices discussed in the ANPRM are “presented as clearly deceptive or unfair despite the fact that they stretch far beyond practices with which we are familiar,” she said in her dissenting statement.

Rulemaking could help the agency and policymakers “nip harms in the bud,” Khan told reporters. She suggested a move toward marketwide rules would be more effective than the FTC relying on case-by-case enforcement. The agency wants to make clear it can’t issue a rule unless it demonstrates a practice is “unfair or deceptive” and “prevalent in the marketplace,” Consumer Protection Bureau Director Samuel Levine told reporters about FTC Act Section 18’s statutory requirements. “So this is just the beginning of a long process, and we won’t make a decision on whether to issue a rule until we have a chance to hear from the public.” The goal “at this stage” is to “begin building a rich public record to inform our assessment of whether rulemaking is worthwhile,” Khan said.

ADPPA passage would mean “real protections for consumers” and stronger civil rights for vulnerable communities, said Slaughter: “I would like to see it become a law, but I know the legislative process is full of uncertainty. Until there is a law on the books, the commission has a duty to use all the tools we have under current law. ... I see our effort as complementary, not an alternative, to congressional legislation.”

The FTC is asking questions and will follow the record, said Slaughter. The majority isn’t being intentionally “vague or uncertain,” she said, noting Section 18 requires the agency to “have an open mind.” If Congress were to pass another law, “I think I can confidently speak for my colleagues that we are committed to following Congress’ direction. We will follow their direction if they tell us to do something different.” Khan said she “couldn’t agree more.” A potentially lengthy rulemaking process gives the agency “ample time” to “reassess along the way” if there are significant developments like Congress passing a new law, said Khan: “If there are other directives Congress is giving us, we will of course prioritize those.”

Hopefully the FTC’s announcement underscores the “urgency for the House to bring the American Data Privacy and Protection Act to the floor and for the Senate Commerce Committee to advance it through committee,” said Senate Commerce Committee ranking member Roger Wicker, R-Miss., in a statement. He negotiated the ADPPA with House Commerce Committee Chairman Frank Pallone, D-N.J., and ranking member Cathy McMorris Rodgers, R-Wash. Enacting privacy protection should be done through the “American people speaking through their elected representatives and not through executive action,” Rodgers said in a statement. “One standard -- clearly directed by Congress -- is paramount to minimizing the amount of peoples’ information companies are allowed to collect, process, and transfer.”

The federal government should be “taking every step it can” to protect consumers, said Pallone. “I appreciate the FTC’s effort to use the tools it has to protect consumers, but Congress has a responsibility to pass comprehensive federal privacy legislation to better equip the agency, and others, to protect consumers to the greatest extent.”