FTC Commissioners Call for Federal Privacy Legislation and Highlight Lack of Civil Penalty Enforcement in Senate Hearing
In their first congressional testimony together as a full commission, the Federal Trade Commissioners expressed support for comprehensive federal privacy legislation before the Senate Committee on Commerce, Science, and Transportation Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security on November 27. While the focus of the hearing was primarily on privacy and data security, the Commission’s written testimony provided updates regarding other consumer protection and competition matters.
Chairman Joseph Simons presented the Commission’s testimony and began by noting that privacy and data security continue to be a top consumer protection enforcement priority at the Commission because the issues are critical to consumers and businesses alike. He noted that while Section 5 has successfully been used to bring over 60 privacy and 60 data securities cases, it is imperfect because it does not provide for civil penalties. In addition, he noted that the FTC does not have jurisdiction over nonprofits or common carriers and does not have organic rulemaking authority which reduces the Commission’s deterrent capabilities.
The testimony reiterated the Commission’s longstanding bipartisan call for comprehensive data security legislation and urged the Congress to consider enacting privacy legislation that would be enforced by the FTC.
In his oral remarks, Commissioner Noah Joshua Phillips requested that Congress reauthorize the SAFE WEB, which sunsets in 2020, and eliminate the sunset provisions. In addition, he stressed three points related to privacy. First, that privacy can be a nebulous concept and that as Congress considers legislation it is important to be clear and frank about the wrongs it seeks to correct. Second, he noted that regulations can chill innovation and competition and it is important to keep small businesses and startups in mind. Third, he believes that Congress is the best place to make the important value judgments that must be made.
Commissioner Rohit Chopra expressed his views that Congress must continue to support the FTC’s Section 13(b) authority to litigate important complex and hard cases against large corporations and ensure that the FTC has the resources it needs to go to court when it is appropriate to do so.
Commissioner Rebecca Kelly Slaughter addressed Commission resources and authority in her statement. First, she noted that the FTC had 50 percent more full-time-equivalent employees during the beginning of the Reagan Administration than it does today. With respect to authority, she noted the limitations that the FTC lacks the ability to obtain civil penalties and lacks the authority to engage in notice and comment rulemaking.
Finally, Commissioner Christine S. Wilson highlighted two of her priorities in the health care industry. On the consumer protection side, she expressed concern about the marketing of unproven or ineffective treatments for serious health conditions and the marketing of products that claim to address opioid addition. On the competition side, she addressed concerns associated with Risk Evaluation and Mitigation Strategies, or “REMS” to impede competition.
Senate committee members pressed the Commission on when they will complete their investigation of Facebook but the FTC declined to comment. The commissioners also declined to comment on what precisely they would do if the agency is provided with more resources.
While previous Commissions have supported data security legislation, this is the first time the Commission has supported comprehensive federal privacy legislation.
For more highlights on the FTC’s testimony, click here to read the commission’s press release.