The Federal Trade Commission recently testified before the House Energy and Commerce Subcommittee about its work to protect consumers, promote competition, privacy and data security, and IoT. In doing so, according to FTC defense lawyer Richard B. Newman, the FTC reiterated its commitment to maximizing its resources in light of marketplace changes.
FTC Chairman Joe Simons and Commissioners Maureen K. Ohlhausen, Noah Joshua Phillips, Rohit Chopra and Rebecca Kelly Slaughter testified on behalf of the Commission. They noted that during 2017, the agency returned over $500 million in redress. The testimony confirmed that consumer privacy and data security will continue to be an enforcement priority at the FTC, and the agency will dedicate significant resources to such issues.
The FTC’s privacy and data security program—which includes enforcement, as well as consumer and business education—has been highly lauded. To date, the FTC has initiated more than 100 privacy and data security-related matters, including the Uber matter related to the company’s data security practices. It also announced the first children’s privacy case involving Internet-connected toys. The Commission takes its commitment to protect children’s privacy seriously.
Recently, the European Union put into effect its General Data Protection Regulation. GDPR, like the EU’s data protection directive before it, imposes certain restrictions on the ability of companies to transfer consumer data from the EU to other jurisdictions. The EU-U.S. Privacy Shield Framework is a voluntary mechanism companies can use to promise certain protections for data transferred from Europe to the United States—and the FTC enforces those promises by Privacy Shield participants under its jurisdiction The Commission is committed to the success of the EU-U.S. Privacy Shield Framework.
Interestingly, the FTC acknowledged that Section 5 of the FTC Act does not provide for civil penalties, thereby reducing its deterrent capabilities. The Commission remains consistent in its call for comprehensive data security legislation.
“In my view, we need more authority. I support data security legislation that would give us three things: (i) the ability to seek civil penalties to effectively deter unlawful conduct; (ii) jurisdiction over non-profits and common carriers; and (iii) the authority to issue implementing rules under the Administrative Procedure Act. And we should consider additional privacy authority as well,” said Chairman Simons. “Make no mistake however: under my leadership, privacy and data security will continue to be an enforcement priority, and the FTC will use every tool in our arsenal to redress consumer harm to the extent we can.”
Reports are that the subcommittee was sending letters to location data aggregators to probe data handling and use. Query whether an overly harsh privacy and data protection regime will ultimate damage online economics.
The FTC’s bread-and-butter is to combat fraud and to ensure that advertising is truthful and not misleading. Recently, the agency has initiated cases challenging false claims in the health, tech and financial areas, false and unsubstantiated health claims, and claims that target the elderly and veterans. It remains vigilant with respect to combatting illegal robocalls. The Commission also recently hosted a workshop to explore how scammers are exploiting public interest in cryptocurrencies.
The FTC also enforces U.S. antitrust law in numerous sectors that directly affect consumers and their pocketbooks, such as health care, consumer products and services, manufacturing and energy. In terms of the FTC’s ongoing efforts to challenge anticompetitive conduct, the agency is also closely monitoring the high-tech sector.
The FTC also engages in significant international work, including with respect to the expansion of global trade and international consumer protection programs.
Contact an FTC investigations (CID) defense attorney to discuss regulatory enforcement trends, or if you are the subject of a state or federal advertising-related investigation or action..
Richard B. Newman is a regulatory litigation, investigations and compliance attorney at Hinch Newman LLP. Follow him on LinkedIn.
Informational purposes only. Not legal advice. Always seek the advice of an attorney. Previous case results do not guarantee similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.
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