I have an op-ed up at Main Justice on FTC Chairman Leibowitz’ recent comment in response the a question about the FTC’s investigation of Google that the FTC is looking for a “pure Section Five case.” With Main Justice’s permission, the op-ed is re-printed here:
There’s been a lot of chatter around Washington about federal antitrust regulators’ interest in investigating Google, including stories about an apparent tug of war between agencies. But this interest may be motivated by expanding the agencies’ authority, rather than by any legitimate concern about Google’s behavior.
Last month in an interview with Global Competition Review, FTC Chairman
Jon Leibowitz was asked whether the agency was “investigating the online search market” and he made this startling revelation:
“What I can say is that one of the commission’s priorities is to find a pure Section Five case under unfair methods of competition. Everyone acknowledges that Congress gave us much more jurisdiction than just antitrust. And I go back to this because at some point if and when, say, a large technology company acknowledges an investigation by the FTC, we can use both our unfair or deceptive acts or practice authority and our unfair methods of competition authority to investigate the same or similar unfair competitive behavior . . . . ”
“Section Five” refers to Section Five of the Federal Trade Commission Act. Exercising its antitrust authority, the FTC can directly enforce the Clayton Act but can enforce the Sherman Act only via the FTC Act, challenging as “unfair methods of competition” conduct that would otherwise violate the Sherman Act. Following Sherman Act jurisprudence, traditionally the FTC has interpreted Section Five to require demonstrable consumer harm to apply.
But more recently the commission—and especially Commissioners Rosch and Leibowitz—has been pursuing an interpretation of Section Five that would give the agency unprecedented and largely-unchecked authority. In particular, the definition of “unfair” competition wouldn’t be confined to the traditional measures–reduction in output or increase in price–but could expand to, well, just about whatever the agency deems improper. Continue reading →
The Federal Trade Commission (FTC) today announced the release of an 18-page Request for Public Comment (embedded below) on its implementation of the Children’s Online Privacy Protection Act or 1998 (COPPA), which governs online sharing by, and collection of information from, children under age 13. The FTC had previously announced that it would accelerate the review, which had been planned for 2015, particularly because of concerns about the mobile marketplace, as noted in the FTC’s report on that topic released in February.
COPPA has undoubtedly succeeded in its primary goal of enhancing parental involvement in their child’s online activities in order to protect the privacy and safety of children online. Yet these benefits have come at a price, as COPPA’s considerable compliance costs (estimated at $45/child, which can be crushing in the era of “free”) have likely reduced the digital media choices available for children. So I’m glad to see the Commission recognize these trade-offs by asking about the costs and benefits of COPPA and any proposed changes right off the bat (Questions 1-5). Such trade-offs are an inevitable part of life and policymakers can’t simply ignore them, even when it’s “for the children.”
The Potential for COPPA Expansion
I look forward to seeing comments on the important questions raised by the Commission about precisely how best to implement the framework enacted by Congress. But I do worry that the Commission has explicitly invited proposals for legislative changes to the statute itself. In particular:
6. Do the definitions set forth in Part 312.2 of the Rule accomplish COPPA’s goal of protecting children’s online privacy and safety? …
28. Does the commenter propose any modifications to the Rule that may conflict with the statutory provisions of the COPPA Act? For any such proposed modification, does the commenter propose seeking legislative changes to the Act?
Note that question #6 does
not include the critical limitation “consistent with the Act’s requirements,” which appears no less than 17 times in subsequent questions about specific aspects of the current rules. Whatever the FTC intended, this will omission, combined with question #28, will be taken as an open invitation by many to propose not just changes in how the COPPA rules are implemented, but wholesale revisions to the COPPA statute itself. Continue reading →
FTC Chairman Jon Leibowitz warned yesterday that companies involved in Web advertising face their “last chance” to “voluntarily” adopt stricter policies governing the use and collection of consumer information, Reuters reports. This isn’t the first time the FTC has threatened the advertising industry with regulation, but it signals a sense of immediacy that may pressure industry leaders to change their practices in coming weeks.
Leibowitz presumably wants to quell widespread concern that Internet companies like Google and AT&T have “excessive control” over consumer information. But what’s excessive about using information that individuals have voluntarily handed over for marketing purposes, subject to legally enforceable rules laid out from the get-go?
Users ultimately control their data, not firms. After all, only data that users transmit can be collected. When a user visits a website, their IP address may be recorded, and when a user submits a query to a search engine, the search term can be logged. This is how the Internet has always worked.
Not all consumers understand what information is gathered about them as they browse online. The best way to protect such users is not through regulation, but by educating — and, therefore, empowering — users. Volumes have been written on privacy and data security, and the ongoing TLF series “Privacy Solutions” offers a growing body of tips on how consumers can achieve the level of privacy that suits them.
Understandably, some people are uncomfortable with their queries being logged, and would prefer that websites simply not track any data. Some sites are willing to do just that — Cuil, a search engine launched in 2008, promises to never log IP addresses or even use cookies (as Jim has noted). Other anonymity solutions rely on secure virtual tunnels that can mask users’ actual IP addresses.
Still, no matter what the FTC does, transmitting data in plaintext over the Internet will never be truly “safe.” Robust end-to-end encryption is the only surefire method of ensuring information cannot be seen by anybody except the sender and the recipient. Even then, information is only as safe to the extent that the party at the other end of the line can be trusted.
Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.