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FTC Ponders Rules on Data Privacy, Security, Algorithms

An exterior view of the Federal Trade Commission building
(Image credit: Future)

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. ■

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.