WASHINGTON D.C. —­­ Yesterday, TechFreedom filed comments addressing critical issues related to the FTC’s enforcement of consumer protection and competition laws in the 21st century, which the Commision will address in its upcoming series of public hearings. The series of hearings, which are set to begin in September, will examine “whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection law, enforcement priorities, and policy.” Specifically, TechFreedom filed separate comments on five of the FTC’s eleven suggested topics:

Topic 11: The agency’s investigation, enforcement and remedial processes: “Since we launched the FTC: Technology & Reform Project with the International Center for Law & Economics nearly five years ago, our fundamental concern has been the Commission’s effective circumvention of judicial review by settling effectively all digital consumer protection cases. In 1980, the FTC promised Congress that the courts, not the agency, would ultimately set the boundaries of the agency’s authority. That simply has not happened — and the principal reason is the agency’s one-sided processes that create a perverse dynamic by which companies essentially always settle. We’ve outlined reforms that would restore some semblance of due process without hamstringing the agency in its enforcement work.”

Topic 5: The FTC’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters: “The Eleventh Circuit’s decision in LabMD in June should serve as a wake-up call to the Commission: its approach to developing data security standards through vague consent decrees violates basic principles of due process. These hearings offer the agency a golden opportunity to rethink its approach, provide clearer guidance to regulated parties — as the agency has for environmental marketing claims with its Green Guides — and to ground its data security enforcement in well-developed standards of negligence.”

Topic 1: The state of antitrust and consumer protection law and enforcement: “The FTC’s consumer welfare standard has been the bedrock of the agency’s enforcement work across Democratic and Republican chairmen for nearly four decades. It allows the agency to measure its success and has allowed the agency to escape the kind of politicization that has plagued the FCC. Changing this standard would undermine the FTC’s unique success.”

Topic 2: Competition and consumer protection issues in communication, information, and media technology networks: “Contrary to popular misconception, the FTC has robust authority for policing broadband now that it has regained jurisdiction, and its principal legal tool will not be the antitrust laws, but its broad consumer protection authority. Besides policing practices that harm consumers as ‘unfair,’ the FTC’s deception authority will enforce not only explicit commitments to net neutrality principles but also the marketing claims that implicitly correspond to net neutrality principles — and, critically, omissions that might have affected consumer choices. The FTC could have used this authority in the Comcast/BitTorrent case in 2008, and will have no trouble using it now. So will state AGs under Baby FTC acts. The same authority will allow the FTC to police potential discrimination by social networks that claim to be politically neutral but fail to live up to those promises.”

Topic 10: The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices. “Consumers deserve a unified approach to consumer protection, which will facilitate cooperation among enforcement agencies and minimize the disruption that comes from jurisdictional tug-of-war fights between agencies. The FTC should harmonize its approach to consumer protection with both the FCC and state AGs. If the FTC fails to harmonize the enforcement of similar consumer protection laws, inconsistent application of those laws could well create constitutional problems under the Commerce Clause.”


We can be reached for comment at media@techfreedom.org. See more of our work on FTC reform: