Building Technical Expertise in the Federal Trade Commission
I submitted the following written testimony to Senate appropriators on strengthening technical expertise at the FTC.
The Honorable John Kennedy United States Senate Committee on Appropriations Subcommittee on Financial Services and General Government Washington, DC 20510
The Honorable Christopher Coons United States Senate Committee on Appropriations Subcommittee on Financial Services and General Government Washington, DC 20510
RE: Building technical expertise in the Federal Trade Commission
Dear Chairman Kennedy and Ranking Member Coons,
The Lincoln Network writes regarding the Senate Committee on Appropriations’ Fiscal Year 2020 Appropriations bill. We urge the Subcommittee on Financial Services and General Government to direct funds for the Federal Trade Commission for the hiring of additional staff technologists.
The Federal Trade Commission is responsible for enforcing federal prohibitions on unfair methods of competition and unfair or deceptive acts or practices. The FTC also enforces U.S. antitrust laws in conjunction with the Department of Justice. In these roles, the agency exercises considerable authority over the nation’s Internet and technology sectors, regularly reviewing proposed business transactions and scrutinizing corporate conduct for its potential to adversely affect consumers. It is crucial that FTC personnel has sufficient expertise to evaluate the benefits and costs of business practices in the complex industries the agency oversees.
In recent years, the FTC has settled numerous enforcement actions involving user interface design, privacy protections, and data security practices. For instance, in a case involving Apple, the agency settled an action alleging that the company was unfairly billing users for mobile device purchases made by their children. The agency has reached settlements with Twitter, Facebook, and Google, among many other companies, regarding these firms’ alleged violations of their privacy policies. And the FTC has settled over 50 cases involving data security practices. Given the breadth of the agency’s authority over nearly every sector of the U.S. economy, it is crucial that the FTC does not harm cybersecurity by discouraging innovation.
Many of these cases turn on complex technological questions that the FTC might have been able to evaluate more effectively with greater expertise. In the case involving Apple, for instance, the dispute turned on whether Apple acted reasonably in allowing mobile users to make additional purchases without re-entering their password within fifteen minutes after having initially done so in a mobile transaction. In another case, as the U.S. Court of Appeals for the Eleventh Circuit noted, the agency struggled to provide fair notice as to what data security practices were adequate under Section 5 of the FTC Act, seeking instead to require that the company’s data security program “meet an indeterminable standard of reasonableness.”
The purpose of enhancing the agency’s in-house technological expertise is not necessarily to increase the number of cases it brings or help the agency prevail against companies accused of unlawful conduct. Rather, the FTC’s technological capacity should help the agency more effectively develop enforcement priorities, evaluate the tradeoffs that come with making complex product design decisions at scale, and help staff economists accurately assess the magnitude of consumer harm.
The FTC should place any new technologists it hires throughout the Bureau of Consumer Protection, the Bureau of Competition, and the Bureau of Economics. By embedding technologists in these bureaus, which enforce the agency’s statutory obligations, the FTC will be best equipped to align its technological staff with its enforcement efforts. Although the agency has in the past housed a Chief Technologist position in the Office of the Chairman, this has been a strategic role focused on highlighting major industry-wide issues, rather than providing expertise on particular cases before the agency. Embedding technologists in the agency’s bureaus that focus on prospective and pending enforcement actions will help the FTC bring its technological expertise to bear as it polices the marketplace for unlawful conduct.
For Fiscal Year 2019, the Committee recommended that “the FTC’s Bureau of Consumer Protection add up to 10 additional FTE technologists,” but the agency has yet to fully address its lack of technological expertise. For the foregoing reasons, we urge the Committee to direct funds to the FTC for the hiring of ten to fifteen staff technologist positions.
Thank you for considering Lincoln Network’s perspective on how best to fund the Federal Trade Commission. If you or your staff have any questions, please feel free to contact Ryan Radia at [email protected].
Senior Policy Counsel, Lincoln Network
Pictured above: President Roosevelt lays the cornerstone for Apex Building, which will house the Federal Trade Commission. 1937. Library of Congress.
Tags: Innovation Governance