Changes to FTC Under Reauthorization Bill Would Modernize Agency, Committee Told
The Senate FTC reauthorization bill would grant the agency expanded powers needed to pursue cyber and other criminals and bad actors, commissioners told the Senate Commerce Committee Tuesday. Current FTC statutes contain provisions not designed for the Internet age, the commissioners said.
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The Federal Trade Commission Reauthorization Act, introduced Tuesday by Sens. Daniel Inouye, D-Hawaii, and Byron Dorgan, D-N.D., would, among other provisions, repeal the common carrier exemption, which bars the FTC from investigating and prosecuting common carriers for anticompetitive behavior and deceptive, unfair practices and fraud. The exemption became law more than 70 years ago, FTC Chairman William Kovacic noted in his testimony. Since then, the industry has changed “just a little,” he joked. “The failure to revisit” common carrier “means almost everyday of the week we bump into limitations,” he said.
The reauthorization bill would also give the FTC authority to seek civil penalties for violations of Section 5 of the FTC Act, which prohibits “unfair methods of competition” and “unfair or deceptive acts or practices.” Commissioners told the Committee that current remedies are not enough to deter those who deploy spyware, violate consumers’ data security and engage in pretexting. The bill would also let the FTC file its own civil penalty cases in its own name, eliminating the requirement that the commission refer such cases to the Justice Department. “We don’t want to leave the impression that there’s been a conflict with DoJ,” said FTC Commissioner Thomas Rosch. But the commission “invests significant resources in investigations and settlements,” he said. And commission staff remain assigned to cases even after referral to DoJ, so the “process doesn’t free up staff, and sometimes leads to duplication of efforts,” he said.
Other technology issues under FTC jurisdiction piqued senators’ interest during the hearing. Sen. Olympia Snowe (R-Maine) said she wants the FTC to continue aggressively pursuing identity thieves, as identity theft is “the number one consumer complaint in America.” And Dorgan told the commissioners he will “be studying” comments on the FTC’s proposed behavioral targeting principles, due April 11. The Reauthorization bill also boosts the agency’s capital budget for IT, which is “essential to what we do,” Kovacic said. The agency looks at “IT equipment as being a key ingredient” and spending more on it is “a very sensible way to go ahead,” he said.