First Apple, Now Amazon: Where is the FTC Heading on Digital Consumer Protection?

TechFreedom and the International Center for Law and Economics (ICLE) hosted a lunch and panel discussion on Thursday, July 31 at the Woolly Mammoth Theatre Company to discuss the important issues surrounding the FTC’s enforcement actions against tech companies.

FTC Commissioner Joshua Wright presented a keynote address explaining his unprecedented dissent in Apple and his approach to applying economics in consumer protection cases generally. The FTC didn’t conduct a rigorous cost-benefit analysis of Apple’s allegedly unfair in-app purchasing design, Wright told the packed house.

Apple’s product design choices are the result of “considerable investment and innovation,” and provide “substantial benefits for consumers who do not want to experience excessive disclosures or by having to enter passwords every time they make a purchase,” Wright said. Under the “unfairness standard,” the FTC bears the burden of showing that the harms from Apple’s choices outweigh the benefits, he said:  “The Commission offered no such evidence,” but rather “substituted its own judgment for a private firm’s decisions as to how to design its product.”

ICLE Executive Director Geoffrey Manne presented his paper, “Humility, Institutional Constraints & Economic Rigor: Limiting the FTC’s Consumer Protection Discretion.” Manne argued that the most important, welfare-enhancing reform the FTC could undertake is to better incorporate sound economic- and evidence-based analysis in both its substantive decisions, as well as in its policymaking.

Other speakers were Martin Gaynor, director of the FTC Bureau of Economics; David Balto, former deputy assistant director of the FTC Office of Policy and Evaluation; Howard Beales, former director of the FTC Bureau of Consumer Protection; Pauline Ippolito, former acting director of the FTC Bureau of Economics; and James Cooper, former acting director of the FTC Office of Policy Planning.

In case you missed it, check out the full video on our YouTube page here, read the full transcript here, and click here to see highlights and tweets from the event. Click here for Commissioner Wright’s prepared remarks.

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