FTC Eyes Convergence as Ripe for Attention on Competition, Privacy Front
Facebook competing with Comcast? The FTC foresees such a scenario, and is taking a closer look at the competition and privacy issues that may arise as disparate platform providers increasingly enter each other’s businesses, commissioners Maureen Ohlhausen and Julie Brill said in a taped interview on The Communicators set to be shown this weekend on C-SPAN. They were attending last week’s Cable Show in Boston, and raised the possible inquiries into convergence independently of each other in separate interviews. Ohlhausen conceded she hasn’t personally read privacy policies and disclosures from at least one major Internet company, while Brill hinted the FTC may take interest in the spectrum deal between Verizon Wireless and four cable companies.
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"Separate industries are starting to compete with each other,” leading the FTC to look beyond its “bread and butter” issues like ads, said Ohlhausen, who in a previous role at the agency led its Internet Access Task Force. The common-carrier exemption that gives the FCC primary authority over telecom matters could provide “a little complication” for an FTC inquiry, but the FTC can “still reach a lot of areas,” such as cable companies providing voice service, she said.
Whether Congress should pass general privacy legislation is an issue Ohlhausen said she would like to “explore more fully” before deciding if she agrees with that recommendation from the FTC’s privacy report, adopted on the eve of her becoming a commissioner in April. “I feel the need to educate myself more fully” on the potential harms in the market, whether existing laws can address harms, how broad legislation should be and what the consequences for competition could be from legislation, such as how Internet companies use consumer data, she said. Ohlhausen said she recently met with a World Wide Web Consortium working group looking into technical do-not-track mechanisms. The FTC report’s view of do-not-track is “a little more nuanced” than whether the mechanism should be the industrywide default or not, she said: Her personal view is consumers should be able to choose across services whether they want their digital tracks to be used to serve them more relevant information.
Displaying privacy disclosures on handsets provides “unique challenges” to existing privacy regulations, and the FTC should “stay ahead of the curve on what’s happening,” Ohlhausen said. “I don’t think that generally you have to create a whole different set of standards” between mobile and wired platforms, perhaps just different ways to bring the same information to consumers, she said. Ohlhausen said she had read privacy disclosures for her Gmail account and even her “neglected Facebook page,” but when she visits “another very well-known website” to buy books or CDs, she doesn’t read disclosures there because “I'm not particularly concerned about the information I'm providing them.” Simplifying privacy disclosures for consumers’ sake is a “good goal for companies to pursue” but they should use a “layered approach,” she said -- leaving the nitpicky details so consumer groups can follow “every twist and turn.” It’s “yet to be determined” whether the FTC will eventually require such a layered framework, she said.
Ohlhausen discussed the complications of meeting privately with her fellow commissioners without violating the Sunshine Act. Using attorney-advisers to discuss matters among commissioners’ offices “creates a little game of telephone tag where the message can get a little distorted,” so occasionally all commissioners get together for meetings that are on the record but not public, to discuss matters without taking action, she said.
Brill said she was at the Cable Show to see companies “show off” their latest innovations, many of which revolve around convergence. “Everyone is moving to the Internet,” not just going through a “box top,” which tells her that large platform providers like cable and social networks can all provide a broad range of services and potentially collect more information about consumers, she said. The FTC must look at how disparate companies are treating consumers as they increasingly compete with each other and how they disclose information collection and use practices, Brill said.
Verizon Wireless’s proposed buy of spectrum licenses from cable companies could draw FTC interest, Brill said. She’s thinking “not so much about that specific spectrum issue, although it could raise competition issues we might want to look at.” Mostly Brill said she’s concerned about how consumer privacy will fare as convergence becomes the norm.
Brill said the FTC’s consent order with Google regarding its ill-fated launch of the Buzz social network is “absolutely” a model for future privacy settlements, as it was for the more recent Facebook settlement. Self-regulation can be “very helpful” because it’s “much more responsive to changes in the marketplace in a quicker way” than either new regulations or laws, Brill said: The key, as with industry efforts toward do-not-track development, is that private efforts are “robust” and have enforcement mechanisms. Echoing Ohlhausen, Brill said the FTC’s priority is developing technology-neutral policies and guidance wherever practical, such as third-party “cramming” practices on wireline and wireless phone bills. Both Brill, a Democrat, and Ohlhausen, a Republican, expressed similar sentiments at a panel discussion during the NCTA’s show (CD May 23 p8).