After Tuesday’s Federal Trade Commission (FTC) oversight hearing, Big Tech should be worried. The FTC told the Senate Committee on Commerce, Science and Transportation it needs more resources to effectively address consumer issues in Big Tech, like data security and privacy issues.
The FTC wants any upcoming privacy legislation to include civil penalty authority for the FTC to “deter” Silicon Valley from wrongdoing.
Furthermore, FTC Chairman Joseph Simons said “it makes sense for the FTC to use its 6B authority of the FTC Act to request from Google and Facebook to learn what information they collect from consumers and how it is used, shared and sold.”
If the FTC requires Google and Facebook to clarify their data-collection and usage methods, then Congress may develop a more potent privacy law.
It could also allow policymakers to address specific problems in the tech industry, which commissioner Noah Joshua Phillips said is paramount to developing a fair privacy law that doesn’t “chill” good conduct, like innovation and competition.
“I don’t think the liability standard can be separated from the civil penalties,” Phillips told the commerce committee. “Penalties can chill conduct. You want to make sure it’s bad conduct.”
Phillips also said state privacy laws should be preempted by a federal standard so as to ensure small businesses aren’t left behind with overwhelming compliance costs.
But commissioners Rohit Chopra and Rebecca Slaughter — both Democrats — said state privacy laws that may be stronger than a federal one should not be overruled.
“We saw how preemption of state law in the mortgage market was catastrophic,” Chopra said, referring to the 2008 financial crisis and subsequent Great Recession. “There are certain states that may want to have higher standards than the federal law. Broad preemption I think would be a huge mistake.”
Slaughter added that state privacy laws and federal ones should be able to coexist as long as they aren’t inconsistent in a way that weakens privacy standards for tech companies.
“I would be concerned about a weak federal law that replaces strong state laws,” she said.
But in order for the FTC to properly enforce privacy, “vigorously enforce” the law and crack down on Big Tech’s malpractices, Simons told the committee the commission needs “more resources.”
Because the commission is seeing an unprecedented level of litigations, it’s stretched thin for investigating other companies and issues, like consumer privacy.
“Our staff is almost killing themselves working on litigations,” he said.
Commissioner Rebecca Slaughter said the FTC’s staff level is 50 percent below its level at the beginning of the Reagan administration in 1981. Senators Jerry Moran (R-Kan.) and Catherine Cortez Masto (D-Nev.) agreed the FTC needs more resources and is “understaffed.”
Senators discussed giving more resources to the FTC, but didn’t indicate any kind of final decision on the matter.