Facebook's Cambridge Analytica Controversy, Privacy Issues Dominate FTC Nominee Slaughter's Hearing

Senate Commerce likely will need to advance Slaughter's nomination before the chamber can vote on Trump's four other FTC nominees, Chairman John Thune, R-S.D., told reporters: “If we're going to get all of them to the floor and get Schumer to cooperate with us, that probably … is going to be necessary.” Schumer has “been waiting to get” Slaughter “in the mix and I think he'll be a lot more cooperative once that happens,” Thune said. Senate Commerce unanimously advanced those nominees in February, including Joseph Simons, whom Trump plans to designate chairman. The other nominees are former Consumer Financial Protection Bureau Assistant Director Rohit Chopra; Noah Phillips, aide to Senate Minority Whip John Cornyn, R-Texas; and from Delta Air Lines, Christine Wilson. Senate Commerce is aiming to vote on Slaughter during the current work period, which is set to run through the end of this month, Thune said.

Schumer lauded Slaughter's record as his adviser on a range of tech and telecom issues that the FTC monitors, noting her ability to “understand the intricacies” of debates like privacy versus security. Slaughter has a reputation for “bringing competing stakeholders together to forge” bipartisan compromises, preferring to “build consensus than cross swords” on antitrust and privacy issues that require striking a “delicate balance,” Schumer said: She's also a “tough negotiator.”

Slaughter highlighted her work on “protection of consumers and the promotion of free and fair markets.” She said that would help her given “technological innovations in rapidly changing markets pose new and daunting challenges to enforcement in both competition and consumer protection.”

The FTC nominees, if confirmed, “are going to have a lot to get up to speed on,” including the agency's ongoing investigation into whether the Cambridge Analytica controversy shows Facebook violated its 2011 consent decree, which required the platform to actively monitor third-party handling of private data (see 1803200047 and 1803260039), Thune told reporters. “The sooner we have a full complement of FTC commissioners over there, the faster that process can move forward and the quicker we can get answers.” The House Commerce Committee also delved into the Cambridge Analytica controversy and other Facebook issues during a Wednesday hearing with Zuckerberg (see 1804110065).

Slaughter avoided specifics on her views about Facebook's handling of Cambridge Analytica and the social media platform's privacy policies, “to be very careful” not to “prejudice” the FTC's investigation. The agency “can and should and must continue to monitor” data breach cases “and bring enforcement cases wherever appropriate,” Slaughter said. Republicans and Democrats alike cited the Tuesday Zuckerberg hearing.

The FTC has a responsibility to “make sure that multibillion-dollar tech companies protect personal data and ensure that they follow their privacy policies regarding the sharing of that data,” said Senate Commerce ranking member Bill Nelson, D-Fla. The Zuckerberg hearing showed “protecting privacy does not always happen. And the consequences of that can be grave.” Sen. Roy Blunt, R-Mo., noted Zuckerberg's contention that Facebook didn't feel like a monopoly, saying that company and other tech sector giants may not have “set out intending to have the market power” they have, an issue “we need to be sure we pay attention to.”

The FTC should “closely” monitor the EU's implementation of its general data protection regulation “and watch carefully to see if it has any instructive lessons for the U.S.,” Slaughter responded to a question from Sen. Maria Cantwell, D-Wash. GDPR is in its “early stages of implementation,” but it's “an innovative approach” that requires the FTC to “figure out how what's working there might work here or not,” Slaughter said. It's “clear” Facebook didn't adhere to its FTC consent decree, so “I hope you will take that into consideration when you're thinking about your sensibilities on this issue,” Cantwell told Slaughter: "We have to do more unless we want consumers to just vote with their feet.” Slaughter noted the FTC has a responsibility to “actively monitor” developments in IoT and other emerging technologies for privacy implications.

On competition in the tech sector, Thune said “some argue that big tech should be subject to more antitrust scrutiny,” while “the applicable law would seem to require a more nuanced analysis, one that is not based on size alone.” Slaughter cited earlier testimony by Simons and others favoring a nuanced analysis of major tech firms (see 1802140047), saying “big isn't necessarily bad on its own, but where you have extreme market concentration, you have more opportunity for abuse of that market power.” It's “incumbent upon the commission to monitor carefully for abuses” in the tech sector and other industries, she said. Thune highlighted the FTC's role in policing net neutrality, saying he believes the only lasting way to solve the debate over that issue is a “bipartisan legislative solution,” in contrast to Hill Democrats' campaign to pass a Congressional Review Act resolution aimed at repealing the FCC order rescinding its 2015 net neutrality rules.