Recently, the Federal Trade Commission heard an earful from a range of industry leaders at a hearing on the agency’s proposed “Click-to-Cancel” regulations, which aim to impose wide-ranging regulations to govern how subscription-based businesses must interact with their customers. The most compelling objection came from the cable industry, which pointed out — quite accurately — that its sign-up and cancellation practices are already closely regulated by a separate federal agency. 

Congress first granted the Federal Communications Commission a mandate to regulate the cable industry nearly four decades ago. In the years since, Congress has repeatedly reinforced that authority — including via 1992’s Cable and Television Consumer Act and 2019’s Television Viewer Protection Act (TVPA) — to ensure the FCC has the power to regulate precisely the kind of business practices on which the FTC has now set its sights. 

For example, under FCC rules, cable operators must maintain a customer service line 24 hours a day, seven days a week, and answer calls within 30 seconds. Cable operators must disclose the total monthly charge for service to consumers before entering a contract — and explicitly note the amount of any promotional pricing and when it expires. Within 24 hours of entering the contract, the provider must send this same information by email or online link and give consumers a 24-hour window to then cancel with no penalties. The TVPA also requires electronic bills to include information about charges and fees, the termination date of any promotional discount and the termination date of the contract. 

I’ve seen firsthand, as former chief of the FCC’s Cable Services Bureau, how the commission’s broad regulatory oversight in these areas effectively empowers it to protect consumers and investigate and punish any bad actors. Decades of close oversight has built within the FCC an in-depth, nuanced comprehension of the sector and the specific protections its customers need.  

By contrast, the FTC’s envisioned rule paints all industries with the same broad brush. A sweeping, “one-size-fits-all” proposal that sees no difference between cable TV service and scammy subscription businesses will cause confusion and may result in unintended negative consequences for consumers. 

Undoubtedly, there is need in other industries for the FTC’s proposed rule. Cast in the most favorable light, perhaps the FTC’s efforts could be viewed as that agency’s effort to do for the rest of the digital economy what Congress and the FCC have already done and continue to do for cable customers; that is, ensuring consumers have full disclosure of all the key facts — prices, terms and conditions — they need to make informed choices, and then making sure they can easily reach their providers if they want to modify service. Assuming that’s the FTC’s goal, it should take the logical step to exempt the cable industry from its proposed rules, rather than just overlapping the FCC’s efforts in ways that could lead to innumerable headaches and costs for both providers and their customers. 

The FTC’s proposal, for example, would likely lead to cable customers receiving less-relevant information and fewer options compared to the FCC’s current regime. In fact, the proposed rule strictly forbids any business from even offering a departing customer a better price or special offer without first asking and receiving their explicit permission to extend such an offer. Intentionally restricting a company’s ability to offer customers discounts or other benefits is hardly an intuitive approach to consumer protection. A key component of making informed decisions is not only access to information before signing up, but also access to information before canceling. 

The FTC’s simplistic, one-size-fits-all approach is particularly ill-suited for complex offerings like cable service, for which consumers can generally personalize their choices from a menu of bundled services, channel packages and speed tiers. Subscribers often opt for discounted packages with specific terms, and if a customer cancels early or cancels only one service in the package, the discount may be revoked. Restricting a provider’s ability to clearly explain those consequences could lead to subscribers unintentionally canceling desired services. 

The FCC’s long-established approach to protecting cable consumers is informed through decades of oversight and expertise and rooted in core principles of transparency, disclosure and consumer choice. The FTC should direct its efforts to those industries not already subject to comprehensive, industry-specific consumer protections. 

Amazon responded today to a lawsuit filed by the FTC and 17 states that alleges the company abused its market position to inflate prices, stifle competition and overcharge sellers.

“The lawsuit filed by the FTC today is wrong on the facts and the law,” said Amazon Senior VP of global public policy David Zapolsky, in a statement. “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry.

“If the FTC gets its way the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small business," Zapolsky added.  “The opposite of what antitrust law is designed to do … We look forward to making that case in court.”

The FTC and states allege that Amazon uses so-called anti-discounting measures to punish sellers for offering prices lower than Amazon, burying lower-priced goods until they become effectively invisible.

“The upshot here is that Amazon is a monopolist and it’s exploiting its monopolies in ways that leave shoppers and sellers paying more for worse services,” said FTC Chair Lina Khan, who rose to prominence for her Yale Law Journal entry, "Amazon’s Antitrust Paradox.”

Also among the key complaints were Amazon’s expensive fulfillment and advertising fees required for sellers to market their goods on the platform. According to the FTC, sellers are paying as much as $1 to Amazon for every $2 they make.

Independent sellers make up as much as 60% of Amazon’s online retail business, according to the company. In the first half of 2023, these retailers collected a 45% cut of every sale made by U.S. sellers.

“In a competitive world, a monopoly hiking prices and degrading service would create an opening for rivals and potential rivals to come in,” Khan wrote. “But Amazon’s unlawful monopolistic strategy has closed off that possibility, and the public is paying directly as a result.”

The FTC alleges that by flooding search results on Amazon with “pay to play ads,” the shopping experience is degraded as they steer consumers toward more expensive and less relevant products.

The FTC didn’t discuss any potential solutions to Amazon’s market dominance, but says they are primarily seeking to hold the company liable.

Since its founding in 1994 Amazon has exploded into an industry-spanning giant, acquiring healthcare provider One Medical, film and television studio MGM and high-dollar supermarket chain Whole Foods.

Amazon in the past has also expanded its hold on the retail market by acquiring rival retailers like Diapers.com and Zappos.

Read the full complaint and Amazon's response.

Amazon’s bundling of multiple services, including its Prime Video streaming service, has drawn the ire of the Biden administration, which said the company has almost singlehandedly monopolized the online retail market and wants a court to remedy that through potential forced divestitures, monetary relief and more.

The Federal Trade Commission, joined by 17 attorneys general, filed suit Tuesday (September 26) against the Big Tech behemoth, charging that the online retail and tech company “is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power.”

“Amazon fuses together a wide assortment of unrelated services ranging from streaming video, music and gaming to prescription drugs and more to the unlimited shipping services included in Prime — and through it, to Amazon’s monopoly online superstore,” the FTC said in a complaint filed with the U.S. District Court for the Western District of Washington.

“This case is about the illegal course of exclusionary conduct Amazon deploys to block competition, stunt rivals’ growth and cement its dominance,” the FTC said.

The FCC is asking the court to break up that monopoly, asking it to “put an end to Amazon's illegal course of conduct, pry loose Amazon's monopolistic control, deny Amazon the fruits of its unlawful practices and restore the lost promise of competition.”

The Computer & Communications Industry Association, an industry group whose whose members include Amazon, fired back at the suit.

“In an environment of ever-rising prices and persistent product scarcity, the FTC is bringing a case against a wildly popular brand best known for getting low-priced goods to your doorstep, by tomorrow,” CCIA said. “This case is out of touch with the concerns of everyday consumers.

“Smart antitrust policy happens when regulators focus on consumer harm, rather than targeting innovative sectors where customers are satisfied,” the group continued. “The FTC’s case would result in fewer products to choose from, higher prices for consumers and reduced options.” 

When FTC chair Lina Khan was sworn in in June 2021, more muscular oversight of Big Tech and tougher antitrust enforcement appeared to be in the offing, given her history of criticizing the market power of Big Tech.

Khan was the lead counsel on a House Antitrust Committee investigation into Google, Facebook, Amazon and Apple that concluded that those companies had captured control of key distribution channels and function as internet gatekeepers, including by buying up potential competitors.

The Justice Department and Federal Trade Commission are proposing tightening their merger review guidelines, citing what Attorney General Merrick Garland calls “unchecked consolidation” that “threatens the free and fair markets upon which our economy is based.”

Garland said the guidelines reflect modern market realities. One of those is the rise of the biggest of big tech, Facebook in particular. The Justice Department and FTC — under both Republican and Democratic administrations — as well as Congress have looked at Facebook with concern over efforts to buy up potential competitors before they get big enough to trigger serious merger reviews. For example, one of the new guidelines says that mergers “should not eliminate a potential entrant in a concentrated market.”

Garland said the guidelines reflect modern market realities. One of those is the rise of the biggest of Big Tech — Facebook in particular, which Justice and the FTC have targeted in both Republican and Democratic administrations — and Congress have been looking at with a concern over efforts to buy up potential competitors before they get big enough to trigger serious merger reviews. For example, one of the new guidelines says that mergers "should not eliminate a potential entrant in a concentrated market."

The FTC under chair Lina Khan had signaled it would be looking hard at big tech companies and whether they got that big via buying up to monopoly. The guidelines would put that in writing as policy going forward.

Justice and FTC divvy up merger reviews for antitrust issues, with Justice generally taking the lead on communications mergers. The Federal Communications Commission merger-review process also includes competition issues, but extends to a review of whether a merger is otherwise in the public interest.

Also Read: DOJ Investigating Search, Social, Online Sales Giants

The guidelines were last updated in 2020 during the Trump administration, but Democrats argued they kept a thumb on the scale for mergers, including by, for one, failing to identify merger characteristics that are most likely to be problematic. That is clearly not the case with the draft guidlines just proposed under the Biden Administration.

The new guidelines are in draft form, so they’ll still need to be finalized, but they will come after public comment on how the guidelines should be revised that included feedback from over 5,000 parties, the DOJ said.

The new guidelines are:

1. “Mergers should not significantly increase concentration in highly concentrated markets;
2. “Mergers should not eliminate substantial competition between firms;
3. “Mergers should not increase the risk of coordination;
4. “Mergers should not eliminate a potential entrant in a concentrated market;
5. “Mergers should not substantially lessen competition by creating a firm that controls products or services that its rivals may use to compete;
6. “Vertical mergers should not create market structures that foreclose competition;
7. “Mergers should not entrench or extend a dominant position;
8. “Mergers should not further a trend toward concentration;
9. “When a merger is part of a series of multiple acquisitions, the agencies may examine the whole series;
10. “When a merger involves a multi-sided platform, the agencies examine competition between platforms, on a platform, or to displace a platform;
11. “When a merger involves competing buyers, the agencies examine whether it may substantially lessen competition for workers or other sellers;
12. “When an acquisition involves partial ownership or minority interests, the agencies examine its impact on competition“ and “mergers should not otherwise substantially lessen competition or tend to create a monopoly.”

Those 5,000 parties, and anyone else who wants to weigh in, will now have an additional 60 days to comment on the draft guidelines, with a deadline of September 18.

The Federal Trade Commission has proposed making it easier for consumers to cancel online subscriptions they no longer want — including to streaming services — with civil penalties for companies that violate the new rules.

The Notice of Proposed Rulemaking released Friday is part of a broader review of the FTC's 1973 negative option rule but also comes in the wake of the agency's lawsuit accusing Amazon of “trapping” consumers into retaining their subscriptions by making it difficult to cancel them.

While the FTC concedes that recurring payment programs have benefits, but said they can be problematic when cancellation is “either difficult or impossible.”

Traditionally the FTC has used its rulemaking authority sparingly, instead suing or settling over alleged violations of existing laws against unfair or deceptive practices. But under chair Lina Khan, the FTC has made it clear it would be flexing its rulemaking muscle, and signaled this was a case of necessity.

“The current patchwork of laws and regulations available to the FTC do not provide consumers and industry with a consistent legal framework,” the regulator said in announcing the proposal.

That proposal would require that online video and other services make canceling subscriptions “at least as easy” as signing up for them — for example, both actions should take the same number of steps on the same website. In addition, for negative option programs for any product other than physical goods, such as ongoing video subscriptions, services would have to provide annual reminders prior to auto-renewal.

The new rule would also require services to ask consumers whether they wanted to hear about additional offers and to take “no” for an answer.

The vote was 3-1, with Khan and fellow Democratic commissioners Rebecca Kelly Slaughter and Alvaro Bedoya approving and Republican Christine Wilson dissenting, saying the rules were overly broad.

“If adopted, this rule would enable more efficient enforcement,” Khan and the Democratic majority said in a statement. “It would create a more powerful deterrent by introducing the risk of civil penalties. And it would allow the Commission to return money to wronged consumers.”

The Computer & Communications Industry Association, whose members include Amazon and Apple, warned against the unintended consequence of creating consumer confusion.

“We agree that unless consumers have clear means to cancel negative option arrangements, they might develop a distrust for retailers, particularly in online commerce," CCIA senior VP and chief of staff Stephanie Joyce said. “CCIA is concerned that the record in this proceeding does not support the FTC’s proposed action and that the expansive, new rules would create duplicative and inconsistent obligations that would invite confusion and uncertainty for both businesses and consumers.”

The Interactive Advertising Bureau (IAB) sounded even more alarmed, saying the new rules "could slow service, burden consumers with irrelevant information, and raise prices."

IAB executive VP for public policy Lartease Tiffith called on the FTC to conduct an economic analysis on the impact of the rules. 

“These proposed rules are far broader than what the FTC previewed in 2019,” Tiffith said. “As a result, businesses and consumers have had barely any input, and the agency is making poorly informed and potentially very costly decisions.”

The Federal Trade Commission on Wednesday sued Amazon for allegedly tricking millions of customers into its Prime program, then ‘trapping’ them into the subscription service by making it prohibitively difficult to cancel. 

The heavily redacted suit, filed in a U.S. District Court in Seattle, is available here. The FTC also issued a press release on the matter Wednesday morning. 

In its complaint, the FTC said Amazon has used so-called dark patterns to lure customers into the Prime program, which offers members subsidized shipping on purchased goods, not to mention the Amazon Prime Video subscription-VOD smorgasbord. 

Dark patterns are user interface schemes designed to take advantage of inherent psychological biases and lead users toward making certain choices. 

"During Amazon’s online checkout process, consumers were faced with numerous opportunities to subscribe to Amazon Prime at $14.99/month," the FTC said in its press release. "In many cases, the option to purchase items on Amazon without subscribing to Prime was more difficult for consumers to locate."

Once enrolled in a recurring Prime subscription, Amazon made it exceedingly difficult to cancel the service. Not only was finding where to start the cancellation process challenging, but users are also faced with numerous redirects and confusing follow-up steps. 

“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC chair Lina M. Khan said in a statement. “These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from ‘dark patterns’ and other unfair or deceptive practices in digital markets.”

For her part, Kahn achieved much of her profile after she penned a 2017 legal paper titled "Amazon's Antitrust Paradox."

Meanwhile, the FTC is cracking down more broadly on dark pattern usage by large internet companies. For example, Fortnite maker Epic Games agreed in December to pay $520 million to settle an FTC suit against it for allegedly tricking users into buying in-game trinkets.

The Federal Trade Commission has proposed banning Facebook from profiting from data collected from anyone under 18, including via its Instagram, WhatsApp, and Oculus services.

That came Wednesday (May 3) as one of the proposed changes to the FTC’s 2020 settlement with the parent company — now Meta — over what the agency called its repeated failure to live up to promises it made as part of the settlement to protect kids’ privacy.

An independent review of that settlement order found enough issues that the FTC said those “deficiencies” posed “substantial risks to the public.”

Facebook has repeatedly violated its privacy promises,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.”

The FTC alleges Facebook failed to comply with the FTC privacy order and misled parents about its ability to control who kids communicated with through the Messenger Kids app, as well as misrepresenting the access some app developers had to users’ private data.

Also: FTC Confirms Facebook Investigation

As part of the FTC's proposed changes to the settlement, Facebook would also have new limits on the use of facial recognition technology.

Facebook paid a whopping $5 billion as part of the 2020 settlement, but did not pony up on its promises, the FTC alleges.

The commission said Facebook has violated both the 2020 order and a 2012 settlement that “barred the company from misrepresenting its privacy practices,“ including by "continuing to give app developers access to users' private information..."

The proposed changes include:

1.) “Blanket prohibition against monetizing data of children and teens under 18: Meta and all its related entities would be restricted in how they use the data they collect from children and teens. The company could only collect and use such data to provide the services or for security purposes and would be prohibited from monetizing this data or otherwise using it for commercial gain even after those users turn 18.

2.) “Pause on the launch of new products, services: The company would be prohibited from releasing new or modified products, services, or features without written confirmation from the assessor that its privacy program is in full compliance with the order’s requirements and presents no material gaps or weaknesses.

3.) “Extension of compliance to merged companies: Meta would be required to ensure compliance with the FTC order for any companies it acquires or merges with, and to honor those companies’ prior privacy commitments.

4.) “Limits on future uses of facial recognition technology: Meta would be required to disclose and obtain users’ affirmative consent for any future uses of facial recognition technology. The change would expand the limits on the use of facial recognition technology included in the 2020 order.

5.) “Strengthening existing requirements: Some privacy program provisions in the 2020 order would be strengthened, such as those related to privacy review, third-party monitoring, data inventory and access controls and employee training. Meta’s reporting obligations also would be expanded to include its own violations of its commitments.”

The FTC has given Facebook 30 days to respond to the allegations.

Sen. Ed Markey (D-Mass.), who has made children's online privacy protection one of his legislative missions, joined with Sen. Bill Cassidy (R-La.) to praise the proposed changes.

“In a Big Tech ecosystem of predatory platforms, Meta stands out for its appalling and consistent record of tracking kids, harming teens, and lying to parents,” Markey and Kennedy said. “Today, the FTC has affirmed what we’ve been saying for years: Meta has already violated the law, and now it’s failing to comply with the terms of its privacy probation. We commend the FTC for taking this step and urge it to move forward with holding Meta accountable.”

Coincidentally, on Wednesday, Markey reintroduced his update of his own Children’s Online Privacy Protection Act, which would ban all targeted ads to kids on any platform.

The Information Technology and Innovation Foundation (ITIF) saw the FTC’s proposed move quite differently.

“The FTC has an important role to play as the lead enforcer of the nation’s consumer protection laws,” ITIF VP Daniel Castro said. “Sadly, instead of enforcing the laws on the books, it is attempting to unilaterally expand its scope and power beyond its legal authority in ways that would limit the ability of businesses to offer services to children online.”

Castro said the FTC is trying to legislate, which is the province of Congress.

The Federal Trade Commission's only Republican commissioner, Christine Wilson, is resigning “soon,” but has said it is not over policy differences with chair Lina Khan, but instead over what she said was Khan’s “disregard for the rule of law’ and the staff Wilson said are enablers of that conduct.

Wilson took to the pages of The Wall Street Journal to say that the chair’s actions made it impossible for her to continue to be part of the agency.

“I have failed repeatedly to persuade Ms. Khan and her enablers to do the right thing, and I refuse to give their endeavor any further hint of legitimacy by remaining,“ she wrote. ”Accordingly, I will soon resign as an FTC commissioner.”

Wilson indicated that she and her staff had been on something of a mission to ”uncover“ Khan‘s abuses of power, spending "countless hours" on that endeavor, adding that her attempts to provide greater transparency at the agency has been hampered by “manufactured” constraints imposed by Khan and the Democratic commissioners.

The FTC has some oversight of internet service providers’ privacy efforts and a lot of oversight of claims communications companies make in their advertising and of communications mergers, which it vets along with the Justice Department.

Randolph May, president of the Free State Foundation, a free market-oriented think tank, said Wilson’s portrayal of a disfunctional FTC was disturbing. ”Obviously, the preexisting longstanding norms of collegiality and bipartisan cooperation, have completely broken down under Lina Khan’s chairmanship to the long-term detriment of the agency, assuming it can right itself.

“As she put in in the Wall Street Journal op-ed explaining her resignation, Commissioner Christine Wilson’s reached the point where she believed that a ’noisy exit’ was preferable to remaining,“ May wrote. “She acknowledged that elections have consequences and that she understood her own policy preferences likely wouldn’t prevail. But it is clear that Commissioner Wilson, to her mind, considered the problem with remaining not to be primarily differences of policy, but of process —  differences of process that led to abuse of power and lawlessness at the agency.”

Wilson was a 2018 appointee of former President Donald Trump. ■

In a warning shot across the bow to all online information gatherers, the Federal Trade Commission and Justice Department say they have struck an agreement with Fortnite creator Epic Games that will see the online gaming giant pay $520 million to settle allegations it broke the law by designing "dark patterns" that tricked game players into make millions of unintended in-game purchases like costumes and dance moves.

Associate Attorney General Vanita Gupta said the settlement should send a message to all online providers that collecting personal information from children without parental consent "will not be tolerated."

The settlement is divided into a $275 million payment to the Treasury, the largest such penalty in FTC history, and $245 million in consumer refunds for its billing practices, the biggest refund in an FTC gaming case.

The FTC alleged that Epic used "privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children," according to FTC chair Lina Khan.

As part of the agreement, Epic will have to employ "strong privacy default settings for children and teens," including that voice communications and texting are turned off by default, the FTC said.

The FTC said the game violated the Children's Online Privacy Protection Act (COPPA) by failing to notify parents about the data collection from their children, then requiring parents to "jump through unreasonable hoops" if they wanted that data deleted.

In a separate complaint, it said Epic used dark patterns -- including confusing button configurations, which tricked players into hundreds of millions of dollars worth of unwanted purchases -- as the game was loading or being awakened from sleep mode.

The FTC said the company had been put on notice of problems by some of the people working for it. "As early as 2017, Epic employees urged the company to change the default settings to require users to opt in for voice chat, citing concern about the impact on children in particular," the FTC said. It also said the company had ignored over a million consumer complaints as well as the repeated employee concerns.

The FTC referred the complaint to Justice (the vote was 4-0), which then proposed the settlement.

Sen. Ed Markey (D-Mass.), a member of the Commerce Committee who authored COPPA, signaled the issue went beyond Epic and put in a plug for passing his update to COPPA that would extend its protections to teens.

"Congress must meet this moment in history by stepping up and stepping in for the wellbeing of young people across America," said Markey in a statement. "Without immediate action to thwart the pernicious threats facing young people, we will fail to safeguard them in the face of a generation-defining mental health and privacy crisis. This is a bipartisan issue for American families, and I won’t stop fighting until we pass updated legislation for kids' and teens' privacy protections online."Sen. Maria Cantwell (D-Wash.), chair of the Commerce Committee, agreed.

“The FTC’s lawsuit against Epic proves we need stronger online privacy protections for children and teens," she said in response to the settlement. "Kids were bullied, harassed, and threated because Epic designed its games to let them communicate with strangers from all over the world.  It’s time for Congress to step up for kids and protect them from online harms and to make sure we have a stronger FTC to enforce against bad actors.”

Sen. Mark Warner (D-Va.) similarly promoted his legislative effort to weed out dark patterns.

“I’m glad to see the FTC cracking down on the use of manipulative dark patterns against children. Companies and platforms that cater to young people have a responsibility to protect their users — not to target them with deceptive interfaces that manipulate them into ceding their personal information or making unwanted purchases," Warner said in a statement. "I will continue working to pass my DETOUR Act in order to establish greater safeguards for users of all ages.”

Dark patterns are online interfaces designed to trick users into taking actions they might not ordinarily take. Examples include: 1) simple buttons that say "yes" to user data collection while the "no" button is tiny or hidden or several steps removed; 2) suggesting others are about to buy an item to try to close the sale; or 3) deliberately obscuring alternative choices or settings. Then there are the online game designs that lure kids into in-app purchases their parents have to either pay for or seek refunds. ■

The Parents Television and Media Council, joined by Fairplay and others, want the Federal Trade Commission to say Hollywood, including streaming services, continues to market violent adult entertainment to children and want the Federal Trade Commission to investigate.

PTC is coming armed with recent research it said found that teen-targeted shows with explicit content is being marketed on social media sites popular with children 13-17.

They have written to FTC chair Lina Khan pointing out that it has been more than two decades since the FTC opened an investigation into the impact of violent entertainment content -- including videos and games -- on kids in the aftermath of the 1999 Columbine High School shooting.

Also: PTC Asks Justice to Investigate Netflix

It has also been more than a decade since the FTC last looked into the issue, they said, and it is time to reopen that investigation, citing streaming content that has materialized since those investigations.

"Though much has changed in the intervening 22 years since the FTC first delved into this issue, this much has not changed: Hollywood is still trying to do an end-run around parents, deliberately targeting children and teens in the marketing of their adult-rated entertainment products on the platforms that teens use the most," they told Khan.

They call that an end run around regulators that needs to be blocked, saying Hollywood efforts at self-regulation.

"On behalf of the PTC’s 1.5 million members, I am asking you to once again open an investigation into the marketing of adult content to children," said Melissa Henson, VP of programs for PTC. ■

The Biden administration is telling the Federal Trade Commission that while potential privacy legislation is good, it is no reason not to aggressively pursue regulations, including “abandoning” the notice and choice approach to Big Tech’s use of consumer data.

That came in the National Telecommunications & Information Administration’s comments to the FTC in its ongoing privacy regulation rulemaking proceeding.

FTC chair Lina Khan — who, unlike the FCC, has a Democratic majority to work with — has made it clear she thinks Big Tech’s privacy practices need more government oversight.

“The significant presence of potential federal legislation in consumer privacy reform discussions does not obviate the importance of the FTC’s efforts to adopt strong, comprehensive rules governing commercial surveillance and data security,” NTIA told the commission.

“The complexities and pace of today’s digital world long ago outpaced what notice and transparency can accomplish as a predominant focus of privacy policy, and they cannot be the primary bulwark against invasive or unfair data practices,” the agency said.

As part of that shift in approach, NTIA said, the FTC should also shift the burden on mitigating privacy risks from individuals to businesses. One way to achieve that would be to adopt tough new limits on the purposes data can be used for.

NTIA also said the FTC needs to require companies to minimize the data they collect and restrict them from gathering data for one purpose and using it for another — like for targeted ads, to better protect children — and consider restricting facial recognition technologies. ▪️

Senate Democrats are massing along a new front in the war with Big Tech and Elon Musk is in the line of fire.

A powerful group of senators led by Sen. Richard Blumenthal (D-Conn.) has asked the Federal Trade Commission to investigate potential consumer-protection laws by Twitter, which Musk has just bought.

“We write regarding Twitter’s serious, willful disregard for the safety and security of its users, and encourage the Federal Trade Commission (FTC) to investigate any breach of Twitter’s consent decree or other violations of our consumer protection laws,” they wrote in a letter to FTC chair Lina Khan.

Also: Groups Turn Up Heat on Twitter Advertisers

Khan herself has been a big critic of Big Tech, so they are in some sense preaching to the choir.

Musk has only been running the company for a few weeks, but the senators say his actions have “undermined the integrity and safety of the platform,” including by announcing new features “despite clear warnings those changes would be abused for fraud, scams, and dangerous impersonation.” Most notably was Musk's rollout — since rolled back — of Twitter Blue and the ability for users to buy blue verification check marks that allowed them to impersonate others.

Also: Twitter Chief Elon Musk Slams ‘Media Elite’

One of those already impersonated, Sen. Ed Markey (D-Mass.), has already called on Musk to answer a raft of questions about how he is operating the company.

Markey was among those calling Thursday (November 17) for the FTC investigation.

Back in May, Twitter agreed to pay $150 million to settle allegations it had violated a 2011 consent decree by using its users’ email addresses and phone numbers for marketing purposes after promising not to. ▪️

Internet advertisers say that the Federal Trade Commission is ”flouting“ the will of Congress and its own rules and say it would be “misguided” for them to start regulating the digital advertising and marketing industry as the regulator has proposed.

That came in comments from the Interactive Advertising Bureau on what the IAB says is the FTC's signal — via an Advance Notice of Proposed Rulemaking — that it can use its authority over unfair and deceptive practices to declare "essentially all" consumer data use off limits.

And, if the end result was effectively that bad, IAB said, “it is likely that between “$32 billion and $39 billion of advertising and ecosystem revenue would move away from the open web by 2025.”

Also: IAB Report Calls Privacy Legislation Threat to Addressability

IAB pointed to the rulemaking proposal’s singling out of targeted advertising and personalized advertising as examples of “personal surveillance” that is potentially unfair and deceptive, which it called a “perplexing and unfounded” change from previous FTC policy.

The FTC also said targeted and personalized ads have only a “theoretical” potential benefit to consumers, while IAB said there is plenty of hard evidence, including that such advertising supports a "significant portion of the competitive U.S. economy" and "millions of jobs."

IAB says that would be a call for Congress to make, not the agency, and at any rate, the FTC has violated its rulemaking process by not providing a "reasonable alternative" to that blanket approach. "Based on procedural deficiencies alone, it would be unreasonable for the Commission to proceed in this rulemaking effort," IAB said.

The group said the FTC's proposed regulatory regime would do a number on the targeted advertising that supports internet content. "[T]he agency has previously supported the benefits of personalized advertising, and its efforts to restrict or eliminate it represent the true harm to consumers," IAB told the FTC. "Consumers desire free or low-cost access to the online services that data-driven advertising provides."

FTC chair Lina Khan is a long-time critic of Big Tech data collection and protection practices — or the lack of them — so there could be a thumb on the scale for new rules. "The growing digitization of our economy — coupled with business models that can incentivize endless hoovering up of sensitive user data and a vast expansion of how this data is used — means that potentially unlawful practices may be prevalent," Khan said back in August.

While the FTC has traditionally been an enforcement agency, suing parties — or securing settlements — over false or deceptive conduct, there is a move, particularly among Democrats, to beef up its rulemaking authority.

The concerns the FTC is looking to address through its potential rulemaking include:

“Lax Data Security: The immense volume of information that companies collect and use requires a commensurate level of data security to keep it safe. However, the FTC is concerned that many companies do not sufficiently or consistently invest in securing the data they collect from hackers and data thieves.“

“Harms to kids: Children of all ages are especially vulnerable to the deception and manipulation that can stem from commercial surveillance.“

“Retaliation: The FTC is concerned that many companies require people to sign up for surveillance as a condition for service.“

“Surveillance creep: Some companies reserve the right to change their privacy terms after consumers sign up for a product or service. Consumers who want to maintain access may have no choice but to accept those updated terms, even those that materially break previous privacy promises.“

“Inaccuracy: Very little is known about the automated systems and algorithms that analyze data.“

“Bias and discrimination: Some commercial surveillance practices may discriminate against consumers based on legally protected characteristics like race, gender, religion and age.“

“Dark patterns: Companies increasingly employ dark patterns or marketing to influence or coerce consumers into choices they would otherwise not make, including purchases or sharing personal information.“

IAB represents more than 700 media companies, marketers, ad agencies and tech companies. ■

Technology think tank ITIF–The Information Technology & Innovation Foundation said the United States should lead an international forum of online stakeholders to come up with voluntary content-moderation guidelines, rather than push for new rules and regulations on targeted advertising or algorithms.

That point came in a new ITIF-penned report responding to what it calls a “crisis of legitimacy” in social-media content moderation.

ITIF issued its report as both Democrats and Republicans call for new regulations on edge providers due to a number of issues, including privacy protections, or the lack of them; targeted advertising; allegations from Republicans of anti-conservative bias; allegations from Democrats of insufficient policing of hate speech; allegations from both sides of insufficient protections of children online; and more.

The report, authored by ITIF senior policy analyst Ashley Johnson and ITIF VP and Center for Data Innovation director Daniel Castro, contends social media companies can’t solve all of these issues by themselves. But Congress is deadlocked, they argued, so solutions lie elsewhere than new rules and regulations on algorithms and targeted advertising.

On the issue of weeding out “harmful” state-sponsored content, ITIF says the U.S. should fund research grants and promote better information-sharing.

And although Congress is deadlocked, the report authors said, the legislature should unlock itself long enough to pass laws “establishing transparency requirements for content moderation decisions of social media platforms and requiring platforms to enforce their content moderation policies consistently.”

That essentially tracks with some of the proposed legislation, but without what tech companies see as a heavy-handed regulatory backstop, such as new Federal Trade Commission rules under its Section 5 authority over false and deceptive practices.

“[S]everal of the structural or technical changes that have been proposed for social media would likely make things worse for both content moderation and other issues impacting consumers,” the report said. ▪️

The Federal Trade Commission is clearly serious about regulating online privacy and targeted advertising, and it has the Democratic majority to deliver.

It has posted a notice on its website with the following provocative headline: “Coming Soon: Protecting Kids from Stealth Advertising in Digital Media.”

What is coming is an October 19 virtual event featuring “researchers, child development and legal experts, consumer advocates and industry professionals” to help it figure out, not whether online marketing to children needs reining in, but “what measures should be implemented to protect children from manipulative advertising.”

The FTC also said it wants additional input on how kids are affected by digital advertising and marketing “that may blur the line between ads and entertainment.”

The Federal Communications Commission is giving commenters until Nov. 18 so they can comment on any issues brought up at the Oct. 19 webcast.

Also: FTC Report Targets 'Dark Patterns' That Deceive Online Users

The FTC has already launched a rulemaking targeting what it calls “commercial surveillance and data security practices that harm consumers and competition” by which it means, among other things, data collection for online targeted advertising. It held a feedback forum last month on those related issues as well.

Unlike the FCC, which is at a political 2-2 tie, the FTC has a Democratic majority and a chair in Lina Khan who has been a big critic of edge provider market power and practices.

The FTC got praise for its focus on potential privacy regulations from Sen. Ed Markey (D-Mass.), the author of the Children’s Online Privacy Protection Act (COPPA). Markey sent Khan a letter last week “applauding the FTC’s continued efforts to implement strong privacy safeguards” and its focus on gathering feedback on “how to effectively address surveillance threats to children and teens online.”

Markey also wants the FTC to update its implementation of COPPA by expanding the definition of personal information and coming up with rules that prevent a platform conditioning a child's use on sharing more data than is “reasonably necessary.”

“Experts agree that we have reached a crisis point for children and teens online, as the rates of mental health challenges for them soar, and the U.S. Surgeon General has called on technology and social media companies to address these threats to young people,” Markey wrote, joined by Reps. Kathy Castor (D-Fla.) and Lori Trahan (D-Mass.). “In countries around the world, government entities have begun to take action by enacting policies that combat pernicious online threats to kids. The United States must now do the same.” ▪️

The Federal Trade Commission has issued a staff report showing the increasing use of “dark patterns” to manipulate consumers into buying products or giving up their information, and thus their privacy, online.

The report, titled “Bringing Dark Patterns to Light,” was released at the FTC's September public meeting  — where it was approved by the commissioners 5-0 — and stems from a workshop in April 2021.

The report cited the case of smart-TV maker Vizio, which struck a multimillion-dollar agreement to settle FTC allegations that it had enabled a default setting that allowed the company to collect and share TV-viewing activity with third parties, but did so without sufficient notice to consumers, including by giving the setting the vague, pro-consumer sounding name of “Smart Interactivity.”

“While dark patterns may manipulate consumers in stealth, these practices are squarely on the FTC’s radar,” the report concluded. That includes where those practices violated the CAN-SPAM Act and Children’s Online Privacy Protection Act (COPPA).

The Network Advertising Initiative is OK with the FTC’s “goals” of cracking down on efforts “designed to trick and trap consumers, including disguised ads, difficult-to-cancel subscriptions, buried terms, and tricks to obtain data.” But it suggested the answer is self-regulation.

The NAI pointed out it has been recommending for months that its member companies follow its NAI Best Practices for User Choice and Transparency. ▪️

News that a Twitter whistleblower is leveling serious allegations against the company related to its protection, or knowing lack thereof, of user's privacy and security, Hill Democrats already unhappy with Big Tech are calling for answers ASAP, including through investigations by the Federal Trade Commission and Justice Department.

There were multiple reports Tuesday (Aug. 23) that former Twitter head of security Peiter Zatko (the former "hacker" formerly known as "Mudge"), who was fired from the company in January, had filed a complaint with the SEC, DOJ and the FTC against the company alleging he was made to mislead the board and investors about security protections .

Zatko claims he was fired as retaliation, but Twitter told NBC News that the firing was for cause--poor performance--and that Zatko was relaying a "false narrative."

That complaint could potentially buttress billionaire Elon Musk's effort to extract himself from a planned purchase of the company, whose business practices, specifically regarding spam and fake accounts, he has cited as the reason.

In the wake of those reports, Sens. Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn.) pressed for investigations into the complaints.

"Twitter has continued to suffer embarrassing security incidents and face ongoing scrutiny for misleading users and regulators,” Markey said in calling for investigations by Justice and the FTC. “This blithe disregard for user data and FTC settlements cannot stand. I strongly urge the federal government to investigate Zatko’s claims and, if necessary, take strong and swift action against Twitter to ensure Twitter user data is properly protected.”

He also said it appeared Twitter had, again, violated the terms of a 2011 consent decree with Justice and DOJ, pointing out that in May it had agreed to pay $150 million to settle allegations it had violated the decree by using its users' e-mail address and phone numbers for marketing purposes after promising not to.

Sen. Blumenthal, chair of the Senate Consumer Protection Subcommittee, echoed Markey's concern, as well as the call for investigations tied to Twitter's consent decree orders.

“If the Commission does not vigorously oversee and enforce its orders, they will not be taken seriously and these dangerous breaches will continue,” Blumenthal said. “I urge the Commission to investigate the allegations and information provided in Mr. Zatko’s whistleblower complaint, and to bring enforcement actions against any breaches of its consent decree or business practices that are unfair or deceptive, including bringing civil penalties and imposing liability on individual Twitter executives where appropriate.”

In 2011, Twitter agreed to a settlement that would impose "substantial financial penalties" if it "further misrepresented 'the extent to which [Twitter] maintains and protects the security, privacy, confidentiality, or integrity of any nonpublic consumer information," the FTC said at the time.

There is bipartisan criticism of Big Tech on the Hill, fueled in part by the revelations of another whistleblower--former Facebook exec Frances Haugen, who created quite a stir last November on Capitol Hill with testimony, including in Blumenthal's subcommittee, in which she revealed internal Facebook research showing the company knew its Instagram platform could be harmful to some teens. ■ 

The Federal Trade Commission is hosting a public form on its proposed rulemaking targeting what it calls "commercial surveillance and data security practices that harm consumers and competition," by which it means, among other things, data collection for online targeted advertising.

The September 8 forum will be virtual and allow the public to "share feedback" on the proposed rulemaking, but members of the public will have to sign up on a first-come, first served basis here and speakers will be limited.

The Interactive Advertising Bureau, which represents online advertisers, is not happy with the FTC's move or the way it teed up the rulemaking as addressing a problem it clearly already sees as needing a fix.

Also: FTC Targets Commercial Surveillance

“With the appointment of a new commissioner, the Federal Trade Commission (FTC) quickly announced a rulemaking process to potentially regulate the digital economy," said IAB EVP of public policy Lartease Tiffith after the FTC signaled the rulemaking last week. "Despite a call for public input, it’s clear that the majority envisions big changes to the way entire industries do business online...Safely and securely, millions of Americans, including in the digital advertising industry, earn their livings with the responsible use of data."

The FTC had its own responsible data collection advisory for those who participate in the online forum, saying: "The FTC Act and other laws we administer permit the collection of your registration contact information to consider and use in this proceeding as appropriate." ■

The Federal Trade Commission has signaled it could impose new rules on “commercial surveillance,” by which it means “the business of collecting, analyzing and profiting from information about people.”

Such rules have obvious implications for the targeted online advertising that undergirds the free content model.

The FTC Advance Notice of Proposed Rulemaking also is targeting "lax data security," another D.C. criticism of Big Tech.

The commission is seeking public input on "the harms stemming from commercial surveillance" and whether new rules are needed to protect privacy.

FTC chair Lina Khan is a long-time critic of Big Tech data collection and protection practices — or the lack of them — so there could be a thumb on the scale for new rules. “The growing digitization of our economy — coupled with business models that can incentivize endless hoovering up of sensitive user data and a vast expansion of how this data is used — means that potentially unlawful practices may be prevalent,” Khan said Thursday (Aug. 11).

While the FTC has traditionally been an enforcement agency, suing parties--or securing settlements — over false or deceptive conduct, there is a move, particularly among Democrats, to beef up its rulemaking authority.

The concerns the FTC is looking to address through its potential rulemaking include:

• "Lax Data Security: The immense volume of information that companies collect and use requires a commensurate level of data security to keep it safe. However, the FTC is concerned that many companies do not sufficiently or consistently invest in securing the data they collect from hackers and data thieves. 
• "Harms to kids: Children of all ages are especially vulnerable to the deception and manipulation that can stem from commercial surveillance.
• "Retaliation: The FTC is concerned that many companies require people to sign up for surveillance as a condition for service.
•  "Surveillance creep: Some companies reserve the right to change their privacy terms after consumers sign up for a product or service. Consumers who want to maintain access may have no choice but to accept those updated terms, even those that materially break previous privacy promises."
• "Inaccuracy: Very little is known about the automated systems and algorithms that analyze data."
• "Bias and discrimination: Some commercial surveillance practices may discriminate against consumers based on legally protected characteristics like race, gender, religion, and age.
• "Dark patterns: Companies increasingly employ dark patterns or marketing to influence or coerce consumers into choices they would otherwise not make, including purchases or sharing personal information."

The reaction on Capitol Hill to the news depended on which side of the aisle it came from.

Republicans have not been eager to give a regulator more power to regulate.

“To get real consumer data privacy protections, Congress must act," said Sen. Roger Wicker (R-Miss.), ranking member of the Senate Commerce Committee. "FTC commissioners have acknowledged legislation, not regulation, is the preferred way to achieve these protections.”

Wicker put in a pitch for the American Data Privacy and Protection Act — he is a co-sponsor — a bipartisan bill that Big Tech has been fighting against with a big-bucks ad campaign. "I hope today’s action by the FTC helps underscore the urgency for the House to bring the American Data Privacy and Protection Act to the floor and for the Senate Commerce Committee to advance it through committee," said Wicker.

On the other side of the aisle, Sen. Richard Blumenthal (D-Conn.), chair of Commerce's Consumer Protection Subcommittee, called the FTC move a “tremendous win” for consumers because it would “strengthen consumer privacy, bolster civil rights, and establish guardrails on the collection and use of consumers’ personal data … Big Tech’s exploitation of Americans’ private information, anti-competitive behavior, and data breaches have created a crisis that demands action,” he said. 

"Despite a call for public input, it’s clear that the majority envisions big changes to the way entire industries do business online," said Lartease Tiffith, EVP for public policy at the Interactive Advertising Burea. "It’s not clear, however, whether Congress gave the FTC such broad power. What some are calling ‘commercial surveillance’ is the necessary exchange of information at the heart of the free and open internet, generating opportunities for creativity, community and commerce. Safely and securely, millions of Americans, including in the digital advertising industry, earn their livings with the responsible use of data. IAB research shows that severe restrictions could jeopardize over 17 million jobs and trillions of dollars of annual economic output. Small businesses increasingly reliant on data and digital advertising could be hardest hit."

Tiffith said IAB supported reasonable data protection policies, and said it was working with lawmakers on achieving that goal.  

■

Rep. Anna Eshoo (D-Calif.) and Sen. Ron Wyden (D-Ore.) have called on Federal Trade Commission chair Lina Khan to take enforcement actions against abusive practices by virtual private networks (VPNs).

VPNs are billed as secure (encrypted) private networks that use the public internet.

The legislators tied that call for action to concerns, in the wake of the overturning of Roe v. Wade, about protecting the personal information of women seeking abortions. They said they were particularly concerned about "deceptive advertising and data collection practices."

The FTC has authority over deceptive ads and practices via its Sec. 5 authority.

Eshoo and Wyden said that among the VPNs’ abusive practices are promoting false claims about their service, selling data or providing user activity logs to law enforcement despite promises of “total anonymity.”

“As the recent Supreme Court decision in Dobbs v. Jackson Women’s Health Organization has amplified concerns about digital reproductive privacy, people seeking abortion are increasingly told that installing a VPN is an important step for protecting themselves when seeking information on abortion in states that have outlawed and criminalized abortion,“ the lawmakers said. But they said there are no practical tools or independent research to identify VPNs that are secure.

In addition to taking enforcement actions against bad actors, they want the FTC to develop a handbook for “abortion-seekers” on protecting their data, including the benefits and risks of VPNs. ■

The Federal Trade Commission is warning the “shadowy” advertising-tech marketplace that it is on the lookout for any practices that run afoul of its rules, and that any claims ad-related data collection is anonymized to protect consumers are no shield from the long arm of the regulator.

And while the FTC is an independent agency, the White House has added its muscle to the warning by circulating it to the press.

Kristen Cohen, acting associate director of the FTC’s Division of Privacy and Identity Protection, tied the warning to the overturning of Roe v. Wade and concerns about women’s health data being manipulated or misused.

Also: Advertisers Tell FTC That Banning Targeted Ads Threatens Trillions in GDP

Cohen focused on “a particularly sensitive subset at the intersection of location and health: information related to personal reproductive matters — for example, products that track women’s periods, monitor their fertility, oversee their contraceptive use or even target women considering abortion.” She said the concern was not simply theoretical, citing a company that targeted ads to consumers who were nearing an abortion-services clinic and another case of Google and Facebook allegedly sharing information culled from period and infertility tracking apps.

But the general message was that the ad tech marketplace was “murky” and “opaque,” and that anonymization was no defense for collection of highly sensitive info, particularly health-related, particularly given the granularity of geolocation info.

“When consumers use their connected devices — and sometimes even when they don’t — these devices may be regularly pinging cell towers, interacting with WiFi networks, capturing GPS signals and otherwise creating a comprehensive record of their whereabouts,” Cohen said.

Cohen said claims that data is anonymous or has been anonymized are often deceptive. She cited the example of one set of researchers able to identify 95% of an anonymized data set of people using just four location points.

“Firms making claims about anonymization should be on guard that these claims can be a deceptive trade practice and violate the FTC Act when untrue,” she said. Given the research she cites, it sounds like an anonymization claim would be a tough defense at the FTC.

She said companies that “over-collect, indefinitely retain or misuse consumer data” can expect to hear from the agency.

The FTC is authorized to sanction any false or deceptive advertising or claims under authority given by Section 5 of the FTC Act. ■

Legislators from both sides of the aisle -- Sens. Mark Warner (D-Va.) and Marco Rubio (R-Fla.) -- have teamed up to urge the Federal Trade Commission to investigate over-the-top video clip streaming site TikTok based on reports that suggest the Chinese-based company is not insulated from the Chinese government's demands for data on U.S. users.

Warner and Rubio are the chair and vice chair, respectively, of the Senate Intelligence Committee.

In a letter to FTC Chair Lina Khan, the senators cited a BuzzFeed story about leaked internal TikTok meeting data showing U.S. user data had been accessed from China.

Also: FCC's Carr Tells App Stores TikTok Has to Go

They said they wanted her to immediately launch a Sec. 5 investigation, which is an inquiry into potential false and deceptive conduct. That includes that the site offered employees in China "unfettered access to user information, including birthdates, phone numbers, and device identification information."

They told Khan that TikTok had appeared to misrepresent its relationship to its ByteDance parent and subsidiaries, one of which, ByteDance Technology, is partially owned by the Chinese Communist Party, and that updates to TikTok's privacy policy that indicate that the site may be collecting biometric data "heighten their concern." ■

Sen. Roger Wicker (R-Miss.), no fan of Federal Trade Commission Chair Lina Khan, said he is concerned about a new agency survey that found morale at the agency had significantly declined under her leadership since June 2021.

Khan is a veteran critic of concentration and anticompetitive market power.

Wicker, ranking member of the Senate Commerce Committee, which has oversight over the FTC, pointed to a Federal Employee Viewpoint Survey (FEVS) by the Office of Personnel Management that indicated that FTC employee satisfaction had declined from 89% in 2021 to 35% in 2022.

Arguably more troubling was that the percentage of FTC employees (over 500 were surveyed) that said they did not have a high level of confidence in FTC senior leadership had increased from 6% in 2021 to 35% in 2022 and those who disagreed with a statement that "the FTC’s senior leaders maintain high standards of honesty and integrity" had gone from 45% in 2021 to 29% in 2022.

Wicker called the results striking and alarming, calling it a "complete reversal" from the prior year, when the FTC had the highest scores for honesty and integrity of any federal agency surveyed. "If the current level of staff satisfaction persists, turnover at the agency will undoubtedly increase and consumers will ultimately pay the price," said Wicker.

Wicker said he wants to know what caused staff satisfaction to fall and the questions about honesty and integrity to rise and what Khan plans to do to turn the survey around.

Wicker said he was concerned about staff attrition due to satisfaction, and suggested senior leadership could learn from FTC management employees who have consistently received excellent evaluations. ■

The Federal Trade Commission has a Democratic majority, thanks to a razor-thin Senate victory for nominee Alvaro Bedoya.

The Senate voted to confirm Bedoya to the commission, meaning as soon as he is sworn in, he will be round out a full complement of commissioners, three Democrats and two Republicans.

But after a 50-50 tally strictly along party lines Wednesday (May 11), it took a tie-breaking vote by Vice President Kamala Harris to get Bedoya on the commission. The Senate had deadlocked on a vote to report his nomination out of committee in March, requiring a Harris tiebreaker as well.

Because the vote in the Senate Commerce Committee to refer him favorably to the Senate for confirmation was a tie, the Senate first had to vote to discharge him from the committee, then to confirm him, the latter of which happened Wednesday.

Also: ‘Wall Street Journal’ Takes Fresh Aim at FCC Nominee Gigi Sohn

“With a full slate of commissioners, the FTC must now act swiftly and boldly to use the full scope of its authority to protect consumers, particularly in communities of color and other marginalized communities, who disproportionately experience harm both online and offline,” Sen. Ed Markey (D-Mass.) said.

“Professor Bedoya is an accomplished scholar with a proven record as an institution-builder and a consensus-builder," said Joshua Stager, deputy director of broadband and competition policy at New America’s Open Technology Institute. “His expertise and dedication to the public interest are precisely what the American people need in an FTC commissioner. We congratulate him on his confirmation and look forward to the FTC returning to full capacity. There is so much work to be done, and we know Professor Bedoya will hit the ground running.”

Fight for the Future executive director Evan Greer used the opportunity to call for a vote on Federal Communications Committee nominee Gigi Sohn, who, like Bedoya, needs the Senate to first vote her nomination out of committee, then give her an up or down vote on confirmation.

Unlike Bedoya, the Senate has not yet voted to discharge Sohn's nomination, which was also tied as to  whether to favorably report her.

“Alvaro Bedoya’s confirmation to the FTC could not come soon enough,” Greer said. “His expertise in privacy and human rights are sorely needed, and with Congress dragging its feet, it’s essential that the FTC moves quickly to address harms like data harvesting, algorithmic discrimination, and biometric surveillance. … Now, Democrats need to get their act together and move quickly to confirm Gigi Sohn to the Federal Communications Commission.” ■

Using unusually harsh language, the Federal Trade Commission and two California law enforcement agencies said they’ve stepped in to stop Frontier Communications from “lying” about internet speeds and “ripping off" customers, including by requiring Frontier to build out fiber and pay millions of dollars in reparations.

Specifically, the FTC said the broadband provider had been charging for high-speed internet speeds it failed to deliver under several digital subscriber line (DSL) service plans per an FTC complaint filed in May 2021 it had now settled with the agency. Frontier will pay $8.5 million in civil penalties and costs, as well as $250,000 to go to the “ripped off" California Frontier customers and future discounts for DSL service.

Frontier will also have to deploy its fiber plant in California more quickly over the next four years.

Also: Frontier to Expand Connecticut Fiber Network to 280,000 Additional Consumers in 2021

The settlement announcement came a day before Frontier reported its earnings, which it said represented three consecutive quarters of record operations growth, including building out fiber to a “record” 211,000 locations.

The proposed settlement — which must be approved by a U.S. District Court judge — would:

• “Require Frontier to substantiate its internet speed claims at a customer-by-customer level for new and complaining customers and notify customers when it is unable to do so;

• “Require Frontier to ensure it can provide the internet service speeds it advertises before signing up, upgrading, or billing new customers;

• “Prohibit Frontier from signing up new customers for its DSL internet service in areas where the high number of users sharing the same networking equipment causes congestion resulting in slower internet service; and

• “Require the company to notify existing customers who are receiving DSL internet service at speeds lower than was advertised and allow those customers to change or cancel their service at no charge.”

The language in the press release on the settlement differed markedly in tone from the May 2021 announcement of the complaint, which alleged the company had “misrepresented” internet speeds and “failed to deliver” on its promises. ▪️

Citing Elon Musk's ownership of satellite internet platform Starlink, the Open Markets Institute says that the FCC, Justice Department and Federal Trade Commission all have the power to block his purchase of social media giant Twitter.

In a statement following the deal announcement, OMI, a liberal think tank that has big issues with perceived monopolies, sees Musk's Twitter takeover as just that, and says the FCC, for one, can block it based on the Communications Act of 1934 and even the Telegraph Act of 1860, given that the deal would give a single person "direct control over one of the world's most important platforms for public communications and debate."

Also: Warner Warns Musk Against Twitter Backslide

DOJ and the FTC certainly have a role in reviewing the $40 billion-plus deal, but the FCC's role is less clear, particularly since it basically shed itself of broadband access oversight -- beyond service transparency obligations -- when it reclassified internet as an information service.

OMI also says the deal would be a merger between essential platforms -- Starlink and Twitter -- that the government routinely acts to prevent.

Interestingly, the group cites for example the DOJ's effort to block the ATT&T/Time Warner deal, which actually failed after a court refused to block that merger.

OMI suggests that Starlink, which has yet to become a major internet player (though it did get a lot of press for Musk's effort to use the satellites to provide internet access to war-torn Ukraine) is comparable to the largest media operations. 

"[J]ust as we would now expect the U.S. government to block a takeover of Twitter by Google, Facebook, Comcast, or Verizon, the same rules apply to the owners of Starlink," it said in a statement.

Many Democrats are concerned that Musk's pledge of reduced content moderation on the platform -- in the name of free speech -- will lead to an increase in disinformation and misinformation. 

FCC Commissioner Brendan Carr, who has been crticial of what Republicans see as Twitter's censorship of conservative speech, including that of former President Donald Trump, was unconvinced.

“The FCC has no authority to block Elon Musk’s purchase of Twitter, and to suggest otherwise is absurd," said Carr in a statement. "I would welcome the full FCC making it clear that we will not entertain these types of frivolous arguments.”■

Public-interest lawyers used Netflix’s rise in the video distribution business to argue that the Department of Justice and Federal Trade Commission are particularly bad at predicting the future of digital markets.

Both agencies are seeking input on whether they need to readjust merger guidelines to reflect the rise of Big Tech giants they suggest have bought up to monopoly -- such as Facebook and Google -- by gobbling up potential competitors, including startups, before they were big enough to register on the antitrust radar.

The DOJ and the FTC divide up merger reviews.

Also: Democrats Look to Block, Unwind Big Tech Mergers

In its comments to the FTC, the Washington Legal Foundation, representing public-interest lawyers, did not hide its disdain for both agencies in suggesting they should leave antitrust merger guidelines alone.

“The FTC and DOJ think that they can predict the evolution of digital markets,” WLF told the FTC to its regulatory face, as it were. “This is pure hubris that conflicts with reality and misunderstands how digital markets work. History also shows that the FTC and DOJ have no clue how digital markets will change. What once looked like a monopolist who should be barred from merging with any competitor may file for bankruptcy only five years later.”

To make its point, WLF pointed out that the FTC in 2005 sued Blockbuster to block its purchase of Hollywood Entertainment because it would have given the video-store chain too much market power. Enter Netflix’s announcement two years later that it would stream movies so folks no longer had to trek to the video store or worry about all the copies being snatched up before they got there.

Five years later, Blockbuster filed for bankruptcy. “It’s impossible to predict what will happen in the digital market,” WLF said in the filing. “If it were possible to envision Netflix’s emergence, the FTC would not have sought to decrease competition by ensuring Blockbuster’s demise. But that is what happened because the FTC is lousy at predicting future market share.” ￭

The Senate voted Wednesday (March 30) along party lines to move to a vote on the nomination of Alvaro Bedoya to fill the vacant Democratic seat on the Federal Trade Commission, which is currently at a 2-2 political tie. Vice President Kamala Harris had to cast the tie-breaking vote.

The Senate Commerce Committee vote to favorably report Bedoya's nomination to the Senate had been a 14-14 tie, necessitating a vote in the Senate to discharge the nomination from the committee before it could vote on the actual confirmation of Bedoya to the FTC. That discharge vote was also a tie at 50-50, with 48 Democrats and two independents voting to discharge and all the Republicans voting against. Harris then took the podium to cast the deciding vote.

According to Ballotpedia, Harris has already cast more than a dozen such tie-breaking votes.

Nomination votes were scheduled for later Wednesday though it was not clear whether Bedoya's would be one of them. But since a majority voted to discharge, his nomination it will almost certainly pass whenever that happens. Bedoya then could be installed at the FTC ASAP.

Bedoya, a critic of facial recognition tech and a big advocate of privacy protections, is joining an agency focused on reining in Big Tech and its perceived anticompetitive conduct.

The White House has also touted his experience helping lead a coalition "that successfully pressed an [i]nternet giant to drop ads for online payday loans."

Bedoya was the first chief counsel to the Senate Judiciary Subcommittee on Privacy, Technology and the Law, which shares oversight of Big Tech.

Senate Majority Leader Chuck Schumer (D-N.Y.) has scheduled a vote for Wednesday (March 30) on the nomination of Alvaro Bedoya to fill the open Democratic seat on the Federal Trade Commission.

Because the vote in the Senate Commerce Committee to refer him favorably to the Senate for confirmation was a tie, the Senate will first have to vote to discharge him from the committee, then to confirm him.

If he is confirmed, as expected, Bedoya, who has been critical of facial recognition tech and is a big advocate of privacy protections, is joining an agency focused on reining in Big Tech and its perceived anticompetitive conduct  so the commission's profile could be raised both inside and outside the Beltway.
Also: Biden Names Privacy Advocate to FTC

Bedoya was the first chief counsel to the Senate Judiciary Subcommittee on Privacy, Technology and the Law, including conducting oversight of Big Tech.

Sen. Maria Cantwell (D-Wash.), chair of the Senate Commerce Committee, spoke in favor of the discharge vote and confirmation on the Senate floor. “The FTC Is the security guard for America's consumers,” Sen. ahw said. “The FTC needs to be able to protect all Americans, and to accomplish that we need to have a commission that is not deadlocked, but has somebody like Mr. Bedoya who can help us move ahead on these issues.”

Yet to get a vote is Gigi Sohn, who was nominated to fill the vacant Democratic seat on the FCC. Her vote out of committee was also a tie, so she, too, will need a discharge vote first. ■

Some Democratic senators are backing a bill that would severely limit the ability of large companies to merge, including by disallowing any deals valued at over $5 billion.

That would, had it been in effect at the time, allow the Department of Justice or Federal Trade Commission to have immediately blocked the mergers of Time and Warner, Viacom and CBS, Comcast and AT&T, Comcast and NBCUniversal, AT&T and Time Warner, Charter Communications and Time Warner Cable, The Walt Disney Co. and 21st Century Fox, AT&T and DirecTV, Discovery and WarnerMedia, and Facebook and WhatsApp, among many others.

The Prohibiting Anticompetitive Mergers Act would also allow them to retroactively block “certain mergers” that had led to greater than a 50% market share.

Washington has been looking at unwinding Big Tech mergers, which many Democrats see as companies buying their way to monopoly by purchasing competitors before they get big enough to trigger serious antitrust scrutiny.

Also: Klobuchar Introducing Big Tech Antitrust Bill

The Computer and Communications Industry Association, whose members include a lot of those big Big Tech players, was not pleased with the latest salvo from Washington.

“This preemptive ban on mergers over an arbitrary size would harm both competition and consumers,” CCIA president Matt Schruers said. “Instead of enforcers continuing to evaluate transactions based upon whether they would substantially lessen competition, the bill would arbitrarily prohibit transactions that can bring significant benefits to consumers and the economy. This approach is ill-advised as it would eliminate judicial checks and balances that courts provide to ensure the merger review process remains apolitical.”

There is actually pretty much of a laundry list of things the new bill would do, including:

• 1.) “Allowing the agencies to reject mergers in the first instance without court orders;
•  2.) “Requiring the agencies to reject certain mergers, including prohibited mergers; 
• 3.) “Prohibiting firms with a history of corporate crime or antitrust violations in the last 10 years from acquiring other companies; 
• 4.) “Prohibiting the agencies from negotiating remedies with the merging parties; 
• 5.) “Directing the agencies to scrutinize the labor impacts of each deal and reject mergers harmful to workers ;
• 6.) “Prohibiting private-equity “roll up” strategies that quickly consolidate industries 
• 7.) “Giving a greater role to other relevant agencies and state attorneys general; 
• 8.) “Requiring courts to defer to certain agency determinations; 
• 9.) “Stripping merger litigation from the appellate jurisdiction of the Supreme Court;
• 10.)  “Establish procedures for the antitrust agencies to conduct retrospective reviews and break up harmful deals that have destroyed competition.”

The bill is spearheaded by Sen. Elizabeth Warren (D-Mass.) and a House version by Rep. Mondaire Jones (D-N.Y.). Co-sponsors include Sens. Cory Booker (D-N.J.), Bernie Sanders (I-Vt.), Tammy Baldwin (D-Minn.), Brian Schatz (D-Hawaii), Sheldon Whitehouse (D-R.I.), Richard Blumenthal (D-Conn.), Jeff Merkley (D-Ore.), and Edward J Markey (D-Mass.), and in the House by Cori Bush (D-Mo.), Mark Pocan (D-Wis.), Alexandria Ocasio-Cortez (D-N.Y.), Katie Porter (D-Calif.), Jesús “Chuy” García (D-Ill.), Andy Levin (D-Mich.), Adriano Espaillat (D-N.Y.), Ayanna Pressley (D-Mass.), Rashida Tlaib (D-Mich.), Mark Takano (D-Calif.) and Eleanor Holmes Norton (D-D.C.).

“For the last five decades, big companies have had almost free reign over our economy, squashing competitors, growing bigger and bigger, and abusing their market power to price gouge consumers and crush workers and small businesses,” Warren said. “This unconstitutional behavior has to stop.” ■

The Biden administration is looking beyond antitrust theories for input on the “first-hand impacts” of media and tech mergers to help guide its planned rethink of merger enforcement.

The Justice Department and Federal Trade Commission, which together divvy up antitrust reviews, will co-host "listening forums," seeking input beyond antitrust experts to consumers, workers, entrepreneurs and others. The forums will be headed by Justice antitrust chief Jonathan Kanter and FTC chairwoman Lina Khan, both of whom are big, Big Tech critics.

Both agencies have sought comment on their enforcement guidelines, which they want to strengthen against illegal mergers, saying that recent evidence shows that "many industries" are more concentrated and less competitive.

Also: Sen. Amy Klobuchar Introducing Big Tech Antitrust Bill

Big Tech deals have been of particular interest in Washington as both the FTC and Congress have been trying to figure out whether the biggest of Big Tech firms got that way by buying potential competitors before they get big enough to trigger deeper antitrust reviews.

Also: FTC, DOJ Suspend Early Merger Review Determinations

The first two forums will be on the food, agriculture and health care sectors, with the April 27 forum on media and entertainment mergers and the May 12 session on Big Tech combinations. ■ 

Faced with the tough regulatory hurdles that come as a tech giant already in the crosshairs of federal regulators, Amazon appears to have gotten the drop on the FTC in its effort to close its $8.45 billion purchase of MGM.

Amazon, which announced the acquisition of the studio behind the James Bond series and other venerable titles way back in May of last year, recently filed with the Federal Trade Commission to certify that it has provided all antitrust information required and asked for by federal regulators. 

Also read: Should Amazon Even Be Allowed to Gobble up MGM?

As first detailed by the Wall Street Journal, that action puts the FTC under a tight mid-March deadline, one it might not be able to make. And the FTC's failure to do so would allow Amazon to close its deal. 

That doesn't totally ameliorate Amazon's situation with the FTC, now under the direction of antitrust-busing chairwoman Lina Khan, and which can still investigate and impact mergers after they've closed. 

Khan has spoken openly in the past about the need for the government to curtail Amazon's power. More broadly, the FTC has recently stated its willingness to intervene in closed deals through actions including lawsuits.

So it may be with Amazon and MGM, but closing the deal would allow Amazon to at least move forward with founder and executive chairman Jeff Bezos' stated goal of getting more vested in video streaming, and exploiting an MGM library that includes 18 Oscar Best Picture winners, the Rocky/Creed franchise, the Pink Panther franchise and around 4,000 other movies. There’s also 17,000 episodes of TV and, of course, nearly two-dozen James Bond movies.

It's notable that Netflix is touting this week the ratings success of spinoff series Vikings: Valhalla, a new series produced by MGM that might have debuted on Amazon Prime Video under another ownership scenario. ■

In a letter to Federal Trade Commission chair Lina Khan led by Sen. Ed Markey (D-Mass.), a trio of senators called on the agency to flex its metaverse muscle to make sure children are protected from potential manipulation.

"While some platforms state their VR devices should not be used by children, many adult users have nonetheless encountered numerous children online. In fact, two-thirds of parents with VR devices report that their children asked them to buy the device," they wrote. Among the potential harms they point to are online harassment and unsafe content.

The senators said increasing use of VR and AR is cause for serious concern related to threats to younger users, including because VR platforms and headsets don't have parental controls. Not surprisingly given Washington's current focus on online platforms, they pointed the finger at Big Tech, saying FTC intervention was needed "as leading technology companies that have historically failed to protect children announce plans to expand their businesses into the 'metaverse.'"

Also: Kids Online Protection Bill Introduced

Markey was a driving force behind the V-chip parental control, a technology that was meant to give parents greater control over their kids TV viewing, though most parents likely don't know the V-chip receiver mandate exists, much less use it.

The senators said the FTC should use its authority under the Children's Online Privacy Protection Act (COPPA, which Markey spearheaded) and the FTC Act to monitor the metaverse. "The need to protect young people from threats online is more urgent than ever. As new technologies emerge, it is incumbent upon the Commission to exercise this authority to protect children," they wrote. ■

Advertisers, edge providers and legislators are giving the Federal Trade Commission an earful over a petition by Accountable Tech to ban so-called surveillance online advertising as anti-competitive “unfair competition.”

That includes claims by advertisers that granting the petition would imperil trillions of dollars in U.S. gross domestic product.

By “surveillance,” Accountable Tech means ads based on tracking and profiling data that allows the hyper-targeted ads that sponsors point out are part of the ad-based model of free online content.

In comments to the FTC about the petition, the Association of National Advertisers said banning data-driven targeted ads would “stifle” internet-based advertising, threatening “trillions of dollars” in economic activity. That is based on the fact that the Internet economy contributed $2.45 trillion of the U.S. $21.18 trillion GDP, said ANA.

A ban would mean “a swift decrease in the availability of accessible information for consumers, cripple the economy and disproportionately impact small and midsize businesses,” ANA told the FTC.

The Interactive Advertising Bureau (IAB) called the ban petition “baseless,” and discounted it as “a self-interested stunt manufactured by competitors” seeking to “declare the commercial internet itself an unfair business practice." Accountable Tech does not identify its backers.

IAB CEO David Cohen said data use and customized ads predate the internet, and simply banning them "would be a devastating blow to jobs, economic growth and innovation.”

Taking the other side, Democratic Rep. Anna Eshoo (D-Calif.) and Sen. Cory Booker (D-N.J.) told the FCC that they support the petition, branding such ads as “the internet’s Original Sin” and a “time bomb” along the lines of the subprime mortgage crisis. 

“The surveillance advertising business model is premised on the unseemly collection and hoarding of personal data to enable ad targeting,” they told the agency. “Companies collect huge amounts of data to maximize user engagement because it increases ad revenue. The FTC should evaluate the harms to society and individuals, as we believe they vastly outweigh the benefits.”

They were hardly alone in advocating for the FTC to step into the online advertising space.

“[S]urveillance on such a scale represents an unprecedented interference with the right to privacy that cannot be compatible with the companies’ responsibility to respect human rights,” said Amnesty International.

“[T]he benefits of surveillance advertising do not outweigh the harms, since relevant ads can be delivered to consumers in a much less privacy-intrusive manner through contextual advertising,” the Consumer Federation of America said.

“As noted in Accountable Tech’s petition, surveillance advertising causes serious harm to both the market and individuals,” Public Knowledge said. “The commission’s dual role as both a competition agency and a consumer-protection agency make it the ideal administrative body to promulgate rules to curb abusive practices by the online advertising ecosystem.”

Lawmakers Weigh In

The issue is also playing out on the legislative front.

A bill was introduced two weeks ago, the Banning Surveillance Advertising Act, that would ban the use of personal information to target most online advertising.

The bill was introduced by Eshoo and Booker along with Rep. Jan Schakowsky (D-Ill.). IAB said of the bill last week that the sponsors must not understand the degree to which the bill would “effectively eliminate internet advertising in the United States, jeopardizing an estimated 17 million jobs primarily at small- and medium-sized businesses.” ■

The Biden administration signaled Tuesday (Jan. 18) that it would be updating and strengthening merger guidelines in the face of a surge of consolidation it argues has reduced competition and consumer choice.

That came in an announced “public inquiry” they said was expected to result in “strengthening enforcement against illegal mergers,” and that could potentially create new rules targeting digital markets and their “unique characteristics.”

While both agencies and Congress have been heavily focused on Big Tech and what is seen as its practice of buying up small competitors before they become large enough to trigger antitrust reviews, the Federal Trade Commission said that many industries all across the economy have become more concentrated and less competitive, “imperiling choice and economic gains.”

The agencies said a merger surge would only exacerbate the “problems” they see with consolidation.

They are seeking input — with a 60-day comment window — but not on whether to take action, but instead on what actions to take to “modernize” the guidelines and “better detect and prevent” anti-competitive deals in “modern” markets.

The FTC and the Justice Department outlined some key areas for comment from stakeholders:

1. “Purpose and scope of merger review: The agencies seek information on whether the guidelines explain and implement the statutory ban on transactions that ‘may’ substantially lessen competition or tend to create a monopoly, and what harms are contemplated by those standards. The agencies further seek input on whether distinctions between horizontal and vertical transactions reflected in the guidelines should be revisited in light of trends in the modern economy.

2. “Presumptions that certain transactions are anti-competitive: The guidelines identify certain market circumstances that justify a presumption of competitive harm based on market concentration. The agencies seek information on whether concentration thresholds should be adjusted to improve the efficiency and effectiveness of enforcement, whether alternative metrics or qualitative factors should also trigger presumptions of competitive harm [that goes directly to the issue of buying up to monopoly], and evidence regarding the accuracy of such presumptions.

3. “Use of market definition in analyzing competitive effects: The agencies seek input on potential updates to the guidelines’ market definition analysis to better account for non-price competition. They also seek to input on when direct evidence of a transaction’s likely competitive effects, such as evidence of head-to-head competition, may eliminate the need for a separate market definition exercise.

4. “Threats to potential and nascent competition: The agencies seek input on potential updates to the guidelines’ discussion of potential and nascent competitors, which may be key sources of innovation and competition.

5. “Impact of monopsony power, including in labor markets: The agencies seek input on how to address the issue of buyer power in more detail in the guidelines. Labor markets are a key example of buyer power, and the agencies seek information regarding how the guidelines should analyze labor market effects of mergers.

6. “Unique characteristics of digital markets: The agencies seek information on how to account for key areas of the modern economy like digital markets in the guidelines, which often have characteristics like zero-price products, multisided markets and data aggregation that the current guidelines do not address in detail.”

Sen. Mark Warner (D-Va.), co-sponsor of the Competition and Antitrust Law Enforcement Act, welcomed the decision.

"As a former technology entrepreneur, I know the incredible possibilities that can be achieved when companies bring together their resources and expertise in a merger," Warner said. "However, over the past few years, with the increasing concentration of power in the hands of a small group of companies, acquisition has become the only exit strategy for most startups, as the built-in advantages are too great to overcome. I look forward to working with the DOJ and FTC to ensure that these new merger guidelines strike the right balance between fostering innovation and preventing harmful consolidation.” ■

A D.C. District Court judge has said the Federal Trade Commission can proceed with its antitrust suit against Facebook, but not with its allegation that Facebook blocked app interoperability (its so-called "platform policies").

While Judge James E. Boasberg said the agency "may" have a tough time proving its allegations, the suit can proceed to the discovery phase. That is "the formal process of exchanging information between the parties about the witnesses and evidence they will present at trial."

The same court had dismissed the FTC's initial suit last June -- as Facebook had requested -- for failing to sufficiently support its claim that Facebook exercised monopoly power in the social network space. But the court had left the door open for the commission to try again. The FTC did and Facebook again asked the court to dismiss.

Also: Facebook Will Participate in Instagram Hill Hearing

This time around, Boasberg said, the FTC's supporting facts are "far more robust and detailed," particularly in regards to the "contours" of the alleged monopoly.

The FTC amended its monopoly claim last September with new data, including the new monopoly "contour" that "between September 2012 and December 2020, Facebook's share of time spent by users of apps providing social networking averaged a whopping 92% per month."

The FTC is claiming that Facebook has become dominant by following CEO Mark Zuckerberg's plan to buy up to monopoly. It cited his 2008 statement that “it is better to buy than compete” — citing the acquisitions of WhatsApp and Instagram — as exhibits A and B. The FTC called Facebook’s actions an “anti-competitive acquisition strategy with anticompetitive conditional dealing policies, designed to erect or maintain entry barriers and to neutralize perceived competitive threats.”

Also: FTC Accuses Facebook of Anticompetitive Advertising

By contrast, the combined time-spent shares of Snapchat, Google Plus, MySpace, Path, MeWe, Orkut and Friendster did not exceed 18% in any month over that time, the FTC said, citing Comscore data. Only Snapchat reached a 10% share, the FTC said.

That appeared to satisfy the court. Boasberg said his decision was based on the following: "First, the FTC has now alleged enough facts to plausibly establish that Facebook exercises monopoly power in the market for PSN services. Second, it has adequately alleged that the company’s dominant market share is protected by barriers to entry into that market. Third, the agency has also explained that Facebook not only possesses monopoly power, but that it has willfully maintained that power through anticompetitive conduct — specifically, the acquisitions of Instagram and WhatsApp."

The FTC had also alleged that Facebook implemented and enforced policies that prevented apps it believed were a threat to its dominance from interacting with the platform.

Boasberg was unconvinced on that front. "The Court will not, however, allow the allegations surrounding Facebook’s interoperability policies (also known as the Platform policies) to move forward; they founder for the same fundamental reasons as explained before: Facebook abandoned the policies in 2018, and its last alleged enforcement was even further in the past."

The Judge also rejected Facebook's claim that the suit be dismissed because FTC chair Lina Khan had prejudged the outcome and should have recused herself from the vote to pursue the suit.

Khan was counsel to the House Antitrust Subcommittee and as such led an investigation that concluded Facebook had monopoly power, which it shored up with the purchases of WhatsApp and Instagram.

Boasberg said Facebook's argument missed the mark for a number of reasons, including because Kahn was acting in a "prosecutorial capacity" (in filing suit) rather than as an adjudicator engaged in the rulemaking process.

Boasberg said that while Khan has expressed views about Facebook's monopoly power, those views don't suggest she has an axe to grind based on personal animosity or financial conflict of interest that has disqualified prosecutors. And as to her holding those views, Boasberg said: "In selecting a chair for a Commission with these diverse responsibilities — as with choosing the head of any agency — it is natural that the President will select a candidate based on her past experiences and views, including on topics that are likely to come before the Commission during her tenure, and how that administrator will implement the Administration’s priorities.... Courts must tread carefully when reviewing cases in this area lest we 'eviscerate the proper evolution of policymaking were we to disqualify every administrator who has opinions on the correct course of his agency’s future action.' " ■

The Federal Trade Commission is telling companies they are now forewarned about a serious online threat to their data, and that of consumers, and it will use its "full legal authority to pursue those who do not patch the vulnerability."

That came un a warning about the open source Log4j (Java logging package) software that is used to log activity for a host of consumer-facing online products and services, it said.

It says a growing number of attackers is trying to exploit the vulnerability to steal personal and financial information that could cause "irreversible harms."

FTC said that companies that don't take reasonable steps to mitigate known vulnerabilities potentially run afoul of the Federal Trade Commission Act and the Gramm Leach Bliley Act.

The FTC advises companies to check if they use Lof4j going to the Cybersecurity and Infrastructure Security Agency (CISA) guidance. CISA said it is used in "very broadly used in a variety of consumer and enterprise services, websites, and applications—as well as in operational technology products—to log security and performance information."

If they do use it, the FTC says do the following:

1. "Update your Log4j software package to the most current version found here. (Link is external) . 
2. Consult CISA guidance to mitigate this vulnerability.   
3. Ensure remedial steps are taken to ensure that your company’s practices do not violate the law. Failure to identify and patch instances of this software may violate the FTC Act. 
4. Distribute this information to any relevant third-party subsidiaries that sell products or services to consumers who may be vulnerable." ■

The Federal Trade Commission has been almost exclusively an enforcement agency, but under new chair Lina Khan it is looking at coming up with new rules to address what Khan calls "lax security practices, data privacy abuses and algorithmic decisionmaking that may result in unlawful discrimination."

That is according to a copy of a letter this week to Sen. Richard Blumenthal (D-Conn.), who pushed for such a rulemaking.

In her response this week. Khan said that given the urgency of the issues Blumenthal identified (see below), she believes the FTC "must consider deploying its full set of tools, including rulemaking."

And that consideration is more than just contemplation.

"The Commission is considering initiating a rulemaking under section 18 of the FTC Act* to address lax security practices, data privacy abuses, and algorithmic decision-making that may result in unlawful discrimination," she told Blumenthal. "Rulemaking may prove a useful tool to address the breadth of challenges and harms that can result from commercial surveillance and other data practices. Critically, rules could establish clear market-wide requirements and address potential harms on a broader scale."

Also: FTC Asked to Ban Surveillance Advertising

Back in September, Blumenthal wrote Khan asking her to begin a rulemaking process to "protect consumer privacy, promote civil rights, and set clear safeguards on the collection and use of personal data in the digital economy."

Part of that is in recognition of the fact that there is no percentage in waiting around for Congress to pass comprehensive national privacy legislation, which almost everybody seems to agree is needed but on which the specifics--what is defined as personal data and whether it is an opt-in or opt-out regime--Republicans and Democrats cannot agree.

Or as Blumenthal put it in the letter: "As Congress continues to develop national privacy legislation, FTC action on this front will ensure that Americans have every tool at their disposal to protect their privacy in today’s online marketplace."

Blumenthal slammed Big Tech in his letter to Khan, saying those companies had used "unchecked" access to personal info to protect their market position from startups and force consumers to live with "continuous data breaches and security lapses that compromise their intimate personal records." And for communities of color, he said, social media was responsible or new forms of discrimination and a market that "punishes companies for protecting and respecting users."

* Under Sec. 18 of the FTC Act, the commission is empowered to issue rules that specify the acts or practices that are unfair or deceptive. ■

Sen. Maria Cantwell (D-Wash.) has called on Federal Trade Commission chair Lina Khan to immediately launch an investigation of "recent revelations and public documentation" that it had misled advertisers and the public in making claims about the "brand safety" and reach of its ads, which she said would violate the FTC's prohibition on unfair and deceptive practices.

If the investigation confirms that public documentation, she said the FTC should take action including getting monetary relief for advertisers and "disgorgement" of the company's "ill-gotten gains."

Despite Facebook's claims about the safety of its product for ad brands and users, she said, whistleblower documents show that while Facebook has asserted that it is 97% effective in weeding out hate speech, its processes "miss more than 90 percent of hate speech content."

If that is the case, "Facebook may thus have made material misrepresentations or omissions to advertisers regarding the effectiveness of its brand safety controls, including its ability to remove criminal content," which would obviously impact how "safe" an ad environment the platform is.

She added that Facebook's rollout of some new brand safety tools claims to avoid adjacency with content in its "tragedy" and "conflict" categories 99% of the time. "If experience is any guide, these newest claims to advertisers may similarly break down under a microscope."

She wants the FTC to pull out that microscope and start looking, including at whether Facebook knew that its "potential reach" ad metric may have been inaccurate when it offered prospective advertisers that metric as a key measure of an ad's potential success, calling it “arguably the single most important number in our ads creation interfaces.”

"A thorough investigation by the Commission and other enforcement agencies is paramount, not only because Facebook and its executives may have violated federal law, but because members of the public and businesses are entitled to know the facts regarding Facebook’s conduct as they make their decisions about using the platform," she told Khan.

As evidence Facebook may have known that was not the case, she cited public analysis as far back as 2017 that demonstrated that its ads might have claimed potential reach that exceeded every 18-34-year-old in the country. ■

The House on Friday (Nov. 19) passed President Joe Biden’s $1.85 trillion Build Back Better Act, whose investments in “better” include more broadband-related subsidy funding, help for local journalism and bulking up the Federal Trade Commission with a new privacy-targeted arm.

The party-line House vote was 220 to 213, but the bill faces a tougher crowd in the 50-50 Senate, where Sen. John Barrasso (R-Wyo.), chairman of the Republican Conference, said it would meet “a buzzsaw of resistance.” Not mincing words, Barrasso said in a statement emailed to Next TV: “Senate Republicans are united in our efforts to plunge a stake through the heart of this Democrat disaster.”

Currently it is two moderate Democrats, Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, who probably hold the keys to its passage. The principal broadband funding boost came from the just-passed infrastructure bill and its $65 billion, but the Build Back Better Act does have another about $1 billion in additional broadband-related funding.

Connect Americans Now praised the inclusion of $475 million in funding for a broadband Connected Device Grant Program, another $300 million for the Emergency Connectivity Fund, $285 million for public-private partnerships to get broadband to historically underserved communities, and another $100 million to educate the public about the availability of various broadband subsidy programs.

The bill also incorporated the Local Journalism Sustainability Act, which provides tax credits for broadcast and online media outlets and newspapers to incentivize them to hire and keep journalists.

“The Local Journalism Sustainability Act will provide meaningful incentives for local broadcast stations to hire and retain the news-gatherers who keep our communities informed, connected and engaged,” said National Association of Broadcasters president and CEO Gordon Smith, who has pushed for the provision. “Local broadcast news is consistently ranked among the most trusted sources of news and information, and this bill would allow radio and television stations to employ additional journalists to report on the events, issues and emergencies affecting our nation.”

Michael Lee, executive director of the LPTV Broadcasters Association, was also pleased. “We have actively supported the Local Journalism Sustainability Act from the beginning and the principle of investing to maintain and develop trusted local community news coverage," he said. "The payroll tax credit should mean this is straightforward to implement, benefit from and track." He also praised FCC acting Chairwoman for this week coming out in support of the credit.

“We are pleased to see the House passage of the payroll tax credit for local journalists as part of the Build Back Better legislative package,” said Nadine Farid Johnson, Washington director of PEN America (https://pen.org/). “This provision will provide a crucial lifeline to local news outlets, bolstering the breadth and durability of community coverage and civic discourse. We urge the Senate to retain the payroll tax credit as it moves toward final consideration.”

Also Read: Journalists Get Build Back Better Help

Consumer Reports was praising the bill's $500 million over 10 years to fund an FTC office focused on policing privacy and data violations, as well giving the FTC civil penalty authority for the first time.

“We applaud the House of Representatives for taking action to empower the FTC to hold bad actors accountable,” CR senior policy analyst Maureen Maloney said. “We call on the Senate to approve the measure, so that the FTC can redouble its efforts to protect consumer privacy, advance civil rights, and address inappropriate uses of data.”

Not surprising in a bill this massive, not everything was to the media/tech industry's licensing.

“While the Build Back Better Act as passed by the U.S. House of Representatives supports companies' ability to keep their intellectual property in the U.S., invest in research and development, and accelerate semiconductor production, its international tax provisions would still hamper the overall competitiveness of globally-engaged U.S. employers," said Jason Oxman, president of tech association ITI. "Certain provisions would impose new worldwide interest limitations and discourage expansion, increase the base erosion and anti-abuse tax rate, and put the U.S. at a disadvantage by increasing its minimum rate before other countries adopt similar rules. As negotiations continue, it is imperative that lawmakers consider the essential role the U.S. international tax system plays in supporting the ability of the U.S. to compete on a global stage and promote innovation. We look forward to continuing to work with U.S. Congress on these provisions.”

The Federal Trade Commission has approved a final order of its settlement with broadband and TV semiconductor components supplier Broadcom.

That came after a mandatory public comment period on the proposed settlement.

The vote to approve the finals order was 3-0-1, with chair Lina Khan recusing her self from the vote.

Back in July, the FTC struck a deal with Broadcom to settle allegations Broadcom illegally monopolized the markets by conditioning access to its components on preventing customers from purchasing chips from its competitors.

Under the settlement, Broadcom agreed not to require customers to source their components exclusively or almost exclusively from the company.

Under the settlement, Broadcom cannot enter into certain exclusive agreements for chips for broadcast set-top boxes, as well as digital subscriber line and fiber broadband internet devices. It also prevents Broadcom from retaliating against customers who use its competitors.

The FTC pointed out that Broadcom dominates chips at the core of not only cable set-top boxes, DSL and broadband devices, but it is also a significant supplier of chips for streaming on set-tops, WiFi chips and chips converting analog signals to digital. Broadcom‘s direct customers are equipment manufacturers that supply AT&T, Charter, Comcast, Dish Network, Verizon Communications and others.

The FTC has concluded that ISPs are collecting and sharing more data about their customers than those customers are aware of, including internet traffic and real-time location data, while "failing to offer consumers meaningful choices about how this data can be used."

FTC chair Lina Khan said the report would be part of an "ongoing conversation" about commercial data practices, but one that could be "incorporated" into FTC action.

That is according to a staff report culminating a two-year investigation into the data practices of AT&T, Cellco Partnership (Verizon Wireless), Charter, Comcast, T-Mobile and Google Fiber, a report the FTC said revealed "troubling aspects of some ISP data collection practices." The FTC also sought info from three affiliated ad entities, AT&T’s Appnexus (rebranded Xandr); Verizon’s Verizon Online; and Oath Americas (now Verizon Media).

Cable ISPs pushed back hard on the report and its "lumping" of their business with the Big Tech platforms NCTA-the Internet & Television Association suggested should be the FTC's focus.

Also Read: FTC Asked to Prevent Surveillance Advertising

The report pointed out that news outlets had reported that location data had been shared with third parties including "car salesmen, property managers, bail bondsmen, bounty hunters, and others without reasonable protections or consumers’ knowledge and consent."

It also said that while companies claim to give consumers choice, many make it tough to exercise that choice, and while they promise to keep data only as long as it is needed for a business purpose, what falls under that definition varies "widely."

The FTC said the report's findings underscore the need to restrict data collection and use.

The report was approved unanimously 4-1 by the commission, with Khan issuing a separate statement.

Khan said the report highlighted 1) problems with the notice-and-consent framework for data collection and sharing; 2) the expansion of ISPs into vertically integrated businesses including ones providing content for their broadband "pipes"; and 3) the potential use of "hyper-granular" online dossiers to discriminate against users.

Khan also said she thought the FCC had the expertise to "fully oversee internet providers," and that it should reassert that authority by "once again put[ting] in place the nondiscrimination rules, privacy protections, and other basic requirements needed to create a healthier market."

That was a reference to the FCC's decision during the Trump Administration to reclassify broadband access as an information service, eliminate those rules, and deed oversight of most of that to the FTC. To reassert that authority and return the rules, the FCC will need a third Democrat since the commission is currently at a 2-2 political tie.

While the FTC has appeared to be more focused on big edge players like Facebook and Twitter of late, it talked about how the ISPs had become tech giants offering "voice, content, smart devices, advertising, and analytics" that all implicated data collection on a big scale.

Among the "troubling" practices report found were that several of the ISPs "combine data across product lines; combine personal, app usage, and web browsing data to target ads; place consumers into sensitive categories such as by race and sexual orientation; and share real-time location data with third-parties."

The companies have privacy protections, but the FTC said that while a number of them promise not to "sell" data to third parties, they allow it to be shared and otherwise monetized "and hide disclosures about such practices in fine print of their privacy policies."

While the association's representing telecom ISPs provided cautious responses focusing on their support of federal privacy legislation, NCTA led with major pushback on both the report and the FTC's characterization of ISPs before joining in a call for consistent privacy rules across all sectors, including online platforms and other Big Tech.

“Consumers’ online safety and privacy is a top priority for the wireless industry, and federal legislation that uniformly protects users across all platforms is the best way forward," said CTIA, the wireless association. "We are looking forward to continuing to work with the FTC, lawmakers and companies across the ecosystem to ensure consumers are protected.”

“As the FTC has called for numerous times, and as previously urged by USTelecom, Congress must enact a national, comprehensive federal privacy framework that puts consumers first and applies uniformly to all companies operating online," said USTelecom, which represents wired telecom ISPs.

“The FTC’s report provides a highly distorted view of ISP data collection policies and inappropriately attempts to lump broadband providers into the same category as the Big Tech platforms. Cable broadband providers take seriously their responsibility to safeguard the personal information of their customers and do not surveil their customers or sell their location data. Viewed objectively, today’s presentation is a broad attack on online advertising generally, not specific ISP actions. And what is further missing from today’s report is the much larger story about Big Tech platforms that are premised on maximizing user attention. What is needed is a consistent set of privacy rules across the online marketplace on a technology-neutral basis. We look forward to continued engagement with policymakers to forge a strong, consistent framework for privacy protection.”

The Federal Trade Commission is warning consumers about potential scamming of the Biden administration‘s Emergency Broadband Benefit Program.

In a blog post on its website, the FTC said “while there is a real government program to help people connect during the pandemic, there’s no payment required to enroll. That’s just a scam.”

“Government impersonators can use official looking names and logos to get them to open their wallets or share personal info,” the agency said. 

It points out that the only legitimate way for consumers to sign up for the subsidy is through the website GetEmergencyBroadband.org.

Red flags include solicitations for up-front paymentsor requests for personal information by anyone who reaches out claiming to be with the FCC.

Also Read: FCC Warns of Emergency Broadband Benefit Imposter

In August, the FCC issued its own fraud warning and took steps to disable a website purportedly run by WiFi Freedom USA that claims to administer the EBB program, including connected devices and services.

The $3.2 billion subsidy, passed by Congress as part of a December COVID-19 aid package, offers up to a $50-per-month subsidy for eligible households (up to $75 on tribal lands) and up to a one-time $100 toward a computer or tablet until the money is expended.

Federal Trade Commission chair Lina Khan has named the permanent heads of the Bureaus of Competition, Holly Vedova, and Consumer Protection, Samuel Levine, both of whom had already been in the roles in an acting capacity.

The Competition Bureau head could be a more prominent post as the FTC considers whether, and more likely how, to start vetting more Big Tech mergers. The FTC recently rescinded its guidelines on vetting some mergers, with an eye toward toughening them up.

Vedova has been with the agency since 1990, most recently (before named acting head of the bureau in June), as an attorney advisor to commissioner Rohit Chopra, who is exiting the agency to head the Consumer Financial Protection Bureau. Before that, she was a staff attorney in the Competition Bureau investigating mergers.

Levine had also been in Chopra's office as an attorney adviser and before that worked for the Illinois attorney general.

“As permanent directors of the FTC’s enforcement bureaus, their mission will be to guide this agency as we work to safeguard fair competition and check unfair or deceptive practices,” Khan said. “I look forward to continuing our work together.”

Calling out Facebook and Google, among others, nonprofit watchdog group Accountable Tech has called on the Federal Trade Commission to ban targeted advertising based on user data, or what it calls “surveillance” advertising.

That came in a petition for rulemaking filed Tuesday (Sept. 28) that asked the FTC to stop the practice of “unseemly collection and hoarding of personal data to enable ad targeting,” which it calls an example of the unfair competition the agency is charged with preventing.

Also Read: Google Ad Decision Draws Feedback

"These dominant firms [it calls out Google and Facebook by name] have used surveillance advertising to reinforce unfair advantages across business lines, stamp out meaningful competition throughout the digital economy, and broadly abuse their market power in ways that cause significant harm to businesses, consumers, and society," the petition asserts. 

The petition calls for simply prohibiting the use of personal data for targeted advertising, which it calls the ”strongest and simplest remedy,“ though one that would likely wreak havoc with the current model for ad-supported free online content.

Failing that, it said, the FTC could adopt a “more restrained rule” that would prohibit businesses from sharing user data for ad purposes with "any business line, website, advertising technology, or tracker other than the business or service with which a user intentionally interacts.“

But either way, it suggested, ”unless the FTC moves to prohibit the surveillance advertising business model at a fundamental level, it will continue to inflict significant and self-perpetuating harms on competition, consumers, and society.“

The petition has at least one big supporter on Capitol Hill, Rep. Anna Eshoo (D-Calif.), who has been a leading voice on reining in such targeted advertising, including working on a bill to ban it.

“The surveillance advertising business model is irredeemably and fundamentally broken,” Eshoo said of the petition. ”I urge the FTC to initiate a rulemaking to ban surveillance advertising, as a petition filed with the Commission last week recommends. This pernicious practice allows online platforms to chase user engagement at great cost to our society, and it enables online disinformation, discrimination, voter suppression, privacy abuses and so many other harms.”

The FTC has historically done its work via lawsuits and settlements, rather than rulemakings, but has been under pressure to flex its rulemaking muscle, something new FTC chair Lina Khan definitely appears willing to do.

Certainly Accountable Tech and Eshoo are rooting for that more muscular approach.

The Federal Trade Commission is being asked to use rulemaking authority to protect privacy, cybersecurity and civil rights.

That tall order comes from Capitol Hill, where federal privacy legislation has proved a hill too high for Democrats and Republicans to help themselves and the country surmount.

Nine Democratic senators are calling on the commission to fight back against what they said is “Big Tech’s unimpeded access and abuse of consumers’ private information, anti-competitive behavior and data breaches, as well as alarm over rising discrimination using personal data that undermine civil rights.”

They argue that privacy has become a consumer crisis and while Congress has failed to come up with a national standard via legislation, lawmakers are calling on the FTC to do what it can in parallel with that ongoing Hill effort to protect consumer privacy using every tool in the regulator’s toolkit.

Also Read: FTC Boosts Big Tech Regulatory Profile

The FTC's tools have generally been to file lawsuits or settle suits over unfair and deceptive practices, but the commissioners do have some rulemaking authority.

The senators want the FTC to launch a rulemaking looking at, among other things, “the banning of exploitative targeting of children and teens and other specific practices, implementing opt-in consent rules on the use of personal data and global opt-out standards.”

The debate over opt-in vs. opt-out data collection regimes has been arguably the biggest sticking point between Republican and Democratic approaches, as well as what qualifies as the sensitive personal information in need of the most protection. But as Big Tech has been more in the sights of lawmakers on both sides of the aisle, there could be more common ground on Capitol Hill when it comes to privacy protections.

Signing the letter were Sens. Brian Schatz (D-Hawaii), Ron Wyden (D-Ore.), Elizabeth Warren (D-Mass.), Chris Coons (D-Del.), Ben Ray Luján (D-N.M.), Amy Klobuchar (D-Minn.), Cory Booker (D-N.J.) and Ed Markey (D-Mass.).

The letter comes only days after President Joe Biden nominated privacy advocate Alvaro Bedoya to a seat on the commission. 

Bedoya was the first chief counsel to the Senate Judiciary Subcommittee on Privacy, Technology and the Law, which oversees Big Tech.

As expected, the Federal Trade Commission has voted to "withdraw" its "flawed" vertical merger guidelines, which were issued jointly by the FTC and Justice under the Trump Administration.

Vertical mergers are ones that combine different parts of the same supply chain (AT&T with its video services and Time Warner with its content production, for example), which DOJ under Trump tried unsuccessfully to block.

The vote is a signal that the commission majority will be unlikely to give as much weight to purported pro-competitive effects of vertical mergers, effects merging companies have been highlighting in pitching their deals.

That decision came at its public meeting Wednesday (Sept. 15). The vote was 3-2 along party lines.

Tech companies from Amazon to Z-Wave had been telling the FTC not to rescind the guidelines, which were adopted in 2020.

Some Democrats had argued that the merger guidelines update under Trump, which was billed as a way to better identify and challenge competitively harmful mergers, still kept a thumb on the scale for those mergers by suggesting they were generally pro-competitive.

FTC Chair Lina Khan said the guidelines had taken some positive steps toward updating policy that had become outdated and inconsistent with agency practice, but said the update also suffered from serious deficiencies, including "improperly suggesting that efficiencies or pro-competitive effects may rescue an otherwise unlawful transaction."

She also said the guidelines' "misguided" discussion of the "purported" pro-competitive effects of vertical mergers would be difficult to correct if relied on by courts. She said the FTC looked forward to working with the FTC on updating the transaction review framework.

In a statement, the Justice Department said it also had issues with the guidelines and also would work with the FTC to update them. The FTC and Justice divvy up antitrust reviews of mergers over a certain threshhold.

Commissioner Christine Wilson had procedural and substantive concerns with the withdrawal. She said the guidelines were supported by sound economics and reflected agency experience and substantial public input. She said the guidelines don't give vertical mergers a free pass, but recognize the actual pro-competitive effects that reviews should take into account.

Commissioner Noah Joshua Phillips said that without sufficient public input or analysis, the agency was removing guidance, while failing to replace it.

Also Read: FTC Accuses Facebook of Surveillance-Based Ads

Also at the meeting, FTC staffers presented highlights from a report on Big Tech purchases that flew under that antitrust threshhold.

The report found that, in aggregate, the five Big Tech companies studied--Google, Apple, Amazon, Microsoft and Facebook--purchased dozens of companies per year between 2010 and 2019 that did not trigger Hart Scott Rodino antitrust reviews. It also found that the large majority of the deals (75%) included noncompete clauses for the founders and key employees of the acquired companies.

The FTC wants to know whether those were efforts to purchase competitors, essentially buying up to monopoly.

The FTC did not break out individual companies to protect sensitive competitive information.

FTC Chair Lina Khan said the report highlighted the systemic nature of Big Tech
"buying their way out of competing." She said the FTC needs to look at whether its reporting requirements are "unjustifiably" allowing such deals to fly under the radar.

She said the FTC has begun to try and close those loopholes. She also pointed to the role of noncompetes in how firms designed their transactions. She said the FTC will look into the use, "and misuse" of those clauses generally as well as in Big Tech deals.

She also said the report could be useful to Congress in efforts to update merger related legislation.

Commissioner Rohit Chopra said the Hart Scott Rodino Act should be amended so that companies need to report more of their M&A activity to antitrust agencies, including those that fall below "today's" threshhold.

He said the FTC should also crack down on "avoidance devices," which he called tricks to keep a deal below the HSR review threshhold, like disguising the real price of a deal using future stock grants and options in an employment agreement.

Commissioner Noah Joshua Phillips called the report a good example of the FTC's use of its special powers. He said that he hoped the document contributed to the broader debate about mergers, but said it was important to be frank about what the data show and don't show.

He said the study was aggregate statistics of only five Big Tech companies, so it is limited in scope. He also said it does not say whether these are representative of tech or the general market. He said that his view is the FTC should be thinking about "smart targeting" its antitrust enforcement.

"Last year’s vertical merger guidelines missed the mark," said Joshua Stager, deputy director of broadband and competition policy at New America’s Open Technology Institute," on the FTC's vote to rescind the guidelines. "They glossed over critical issues, ignored key harms in digital markets, and denied public participation. Perhaps most importantly, they were approved by the slimmest majority possible. To work effectively, the guidelines should reflect consensus. We look forward to working with the FTC to find that consensus and to make our antitrust laws work better under stronger guidelines."

President Joe Biden has nominated Alvaro Bedoya as commissioner of the Federal Trade Commission. He will be replacing Democratic Commissioner Rohi Chopra, who has been named to head the Consumer Financial Protection Bureau.

If he is confirmed, Bedoya, who has been critical of facial recognition tech and is a big advocate of privacy protections, is joining an agency focused on reining in Big Tech and its perceived anticompetitive conduct.

The White House was also touting his experience helping lead a coalition "that successfully pressed an [i]nternet giant to drop ads for online payday loans.

Bedoya was the first chief counsel to the Senate Judiciary Subcommittee on Privacy, Technology and the Law, including conducting oversight of Big Tech.

Also Read: FTC Boosts Big Tech Regulatory Profile

Democratic House Energy & Commerce Committee Chairman Frank Pallone Jr. (N.J.), also a big privacy advocate, was pleased with the pick.

“I congratulate Mr. Bedoya on his nomination and commend President Biden for selecting a pro-consumer advocate to join the FTC," he said. "Protecting consumers from data privacy abuses, identity theft, fraud, and other unfair and deceptive practices is core to the agency’s mission. Mr. Bedoya will make a strong addition to the Commission, particularly with his extensive background in technology and privacy law, and I trust that he will make an excellent Commissioner. I wish him a speedy confirmation and look forward to working together to protect consumers.”

“USTelecom congratulates Professor Bedoya on his nomination to the Federal Trade Commission, an agency that plays a vital role in our connected economy. Our members look forward to working with him on priorities at the top of the FTC’s consumer protection agenda, specifically advancing a national privacy framework that respects and protects consumers across the entire internet ecosystem," said USTelecom President Jonathan Spalter. "We’re also eager to strengthen our partnership to crack down on illegal robocalls and take back our phones from the scammers and spoofers polluting our communications networks.”

Technology companies from Amazon to Z-Wave are telling the Federal Trade Commission not to rescind its vertical merger guidelines and enforcement advisory that were adopted in 2020 under President Donald Trump.

The proposal to scrap both is scheduled for a vote at the FTC's Sept. 15 public meeting, and the Democratic majority is expected to approve their exit.

In a Sept. 13 letter to the FTC, the Consumer Technology Association (CTA) said those 2020 guidelines, jointly adopted by the FTC and DOJ, which divvy up merger antitrust reviews, were produced after extensive public input.

Some Democrats had argued that the merger-guideline update under Trump, which was billed as a way to better identify and challenge competitively harmful mergers, still kept a thumb on the scale for those mergers by suggesting they were generally pro-competitive.

Vertical mergers are tie-ups that combine different parts of the same supply chain, such as AT&T with its video services and Time Warner with its content production — a deal that the Trump-era Justice Department tried unsuccessfully to block.

The CTA told the FTC it opposed any move to rescind the guidance, particularly without robust notice and public input on what it said would be a sudden shift away from traditional merger reviews, a shift that would "stifle companies’ ability to plan, invest, and innovate."

"We urge the commission to reject the vote to withdraw the Guidelines and Commentary, or in the alternative, to postpone the vote and provide notice and a reasonable comment period for public consideration and input," CTA said.

The FTC under new chair Lina Khan has signaled it will be looking hard at big tech companies and whether they got that big via buying up to monopoly. That is the FTC's allegation against Facebook in a revised complaint.

Between September 2012 and December 2020, Facebook's share of time spent by users of apps providing social networking averaged a whopping 92% per month, the Federal Trade Commission said.

That was among the new data in the regulator’s amended claim of anti-competitive conduct by Facebook to the U.S. District Court for the District of Columbia last week.

The FTC is claiming that Facebook has become so dominant by following CEO Mark Zuckerberg's plan to buy up to monopoly. It cited his 2008 statement that “it is better to buy than compete” — citing the acquisitions of WhatsApp and Instagram — as exhibits A and B. The FTC called Facebook’s actions an “anti-competitive acquisition strategy with anticompetitive conditional dealing policies, designed to erect or maintain entry barriers and to neutralize perceived competitive threats.”

By contrast, the combined shares of Snapchat, Google Plus, MySpace, Path, MeWe, Orkut and Friendster did not exceed 18% in any month over that time, the FTC said, citing Comscore data. Only Snapchat reached a 10% share, the FTC said.

“Facebook implemented an anti-competitive scheme that prevented differentiated and innovative firms from gaining scale, thus enabling Facebook to maintain its dominance,” the regulator claimed.