ASPEN, Colorado — News of a potential avalanche of online privacy rules shook up a recent meeting of preeminent tech experts, regulators, and elected officials.
At the Technology Policy Institute’s annual conference in August, many participants were taken by surprise at the Federal Trade Commission’s announcement about its pending first steps to clamp down on user data. Since Congress is already considering legislation on the topic, industry watchers had assumed the commission would defer to the legislative branch.
But with doubts about Congress’s capacity to act, and with Republicans within striking distance of winning a House majority on Nov. 8, the Democratic-led commission is filling the void at the federal level. The panel, headed by Lina Khan, an appointee of President Joe Biden, is beginning to promulgate new rules for “commercial surveillance” and data collection. In its notice seeking public comments, the agency expresses concern that those activities might be harming consumers and children, specifically through the use of algorithms. The agency will hold an accompanying public forum in early September.
Discussions at the Aspen conference, including high-level privacy officials from major tech companies and congressional staff, involved conflicting ideas about the commission’s effect on the pending legislation. Some thought it might spur action on Capitol Hill while others expressed the opposite view.
When asked about the possibility of Congress passing a federal privacy law, Colorado Attorney General Philip Weiser, a Democrat, said his preference would be for legislative action, saying that would be the “first and best world,” but he expressed some doubt. “We’ll see if we get it,” he added. States haven’t been waiting. Weiser’s state, along with four others — California, Connecticut, Utah, and Virginia — have already passed their own digital privacy laws, and dozens more have introduced legislation on the subject.
Nor is it just a blue-state approach. In a conversation at the conference about antitrust enforcement and other issues affecting Big Tech, Nebraska’s Republican attorney general, Doug Peterson, characterized his office’s work on online privacy as a consumer protection matter and, in that sense, “more traditional” than ongoing state-level action on content moderation issues.
Addressing the agency going forward with crafting its own rules while Congress is still considering a federal privacy framework, Khan said in a statement, “If Congress passes strong federal privacy legislation — as I hope it does — or if there is any other significant change in applicable law, then the Commission would be able to reassess the value-add of this effort and whether continuing it is a sound use of resources.”
Commissioner Christine Wilson argued against that view in a dissenting opinion, writing, “An FTC rulemaking would be vastly inferior to federal privacy legislation.” She pointed to concerns that FTC rules would be used by opponents of the pending federal legislation, the American Data Privacy and Protection Act, to derail it. She added that recent “Supreme Court decisions indicate FTC rulemaking overreach likely will not fare well when subjected to judicial review.”
The vote fell along party lines, with both Republican commissioners opposing the decision to move forward. It comes just months after a fifth member of the commission, Alvaro Bedoya, joined the panel. Bedoya, the former director of the Center on Privacy and Technology at the Georgetown University Law Center, brings significant expertise in the area of data privacy. But this action has some privacy experts concerned.
The FTC call for comments includes 95 questions, and some critics think they betray a strong bias for stricter regulations than exist in the pending legislation. Neil Chilson, a former chief technologist for the commission, told the Washington Examiner that the wording gave away the agency’s intent. “The FTC lacks the legal authority to write comprehensive privacy rules — that’s Congress’s job, and they are working on a promising bill right now,” said Chilson, now a senior research fellow at philanthropic group Stand Together. “But even if the FTC had such authority, characterizing all business uses of customer data as ‘surveillance’ is no way to conduct an open inquiry that will survive judicial review.”
Jennifer Huddleston, of tech trade group NetChoice, told the Washington Examiner that the notice “indicates Chair Khan has already decided her preferred outcome in a war on internet-based advertisements” that would lead to “less content, more ads and more paywalls for all Americans, especially those in low and middle-income households.”
