FTC Asserts Internet Privacy Cop’s Chops

With the Federal Communications Commission likely to return broadband privacy to the purview of the Federal Trade Commission, the acting head of the Bureau of Consumer Protection, a Republican appointee, is pitching the FTC as the once and future “cop” on the privacy beat.

That could be important if FCC chairman Ajit Pai moves to swiftly reverse the classification of Internet Service Providers as a telecommunications service under Title II of the Communications Act, which is how the FCC got involved in broadband privacy in the first place.

After congressional Republicans repealed the FCC’s broadband privacy framework, Pai, who had dissented from his predecessor Tom Wheeler’s rules, signaled the FTC was where such oversight belonged — and where it had been before the FCC’s reclassification of ISPs as common carriers.

But there has been much debate over whether Web users’ online visits and activities can be protected from prying eyes, or advertisers, if users don’t want to have their information tracked and monetized. Granted, the day after Congress rolled back the regulations, with virtually all the FCC’s rules not yet in effect, the state of privacy was the same as the day before and the same as it has been for almost two years. That goes back to June 2015, when the FCC’s Open Internet Order took effect, deeding the FCC broadband privacy oversight.

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“You often hear the FTC described as America’s top cop on the privacy beat,” blogged Thomas Pahl, acting director of the Bureau of Consumer Protection. “We’re not the only agency working on privacy and data security issues, of course, but we have the broadest jurisdiction. And for more than 20 years, we have used it thoughtfully and forcefully to protect consumers even as new products and services emerge and evolve.”

That blog concerned privacy in general, but Pahl made a point of listing all the other parts of the Internet “ecosystem” the FTC has been able to police using its authority to pursue — by suing or seeking settlements — violations of statutory prohibitions against unfair and deceptive practices.

Taking on Big, Small Players

“We’ve challenged the practices of smaller companies and global giants. The cases cover all parts of the Internet ecosystem, including social networks, search engines, ad networks, online retailers, mobile apps, device manufacturers and participants in the Internet of Things (IoT) marketplace,” Pahl wrote.

Jeff Chester, one of the leading voices for tough online privacy protections as executive director of the Center for Digital Democracy, wasn’t buying it.

“The FTC has been purposely kept incapable of protecting the public since advertisers led Congress to take away most of its rulemaking power in the early 1980s,” Chester said. “It can really only implore companies to do the right thing; perhaps ping a very bad actor. But every major practice that has emerged in the last few years shows how the FTC is incapable of protecting privacy — from device tracking; offline and online data merging [onboarding]; and real-time millisecond auctions of users based on our data profile [programmatic].”

Pai and acting FTC chairman Maureen Ohlhausen have both signaled they will work together to return broadband privacy oversight to the FCC, which likely means by reversing the Title II classification of ISPs, though conceivably that could also happen if Congress eliminated the provision in the law that excludes the FCC from regulating common carriers — an unlikely scenario under the Republican Congress.

The more likely scenarios under Pai and Ohlhausen would be fine with ISPs, who would love to see the FCC get out of the broadband privacy regulation business in favor of the FTC’s “privacy by design” approach.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.