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Five Takeaways from a Fireside Chat with FTC Acting Chairman Maureen Ohlhausen

On Wednesday, April 19, 2017 the International Association of Privacy Professionals (IAPP) hosted a fireside chat with Federal Trade Commission Acting Chairman Maureen Ohlhausen as part of their annual Global Privacy Summit in Washington, DC. The discussion, moderated by former Federal Trade Commission Commissioner Julie Brill, covered a number of areas of interest to NAI members.

Outlined below are five valuable takeaways:

1. The FTC has established a ‘substantial injury task force’

Acting Chairman Ohlhausen, revealed that the FTC has established a substantial injury task force aimed at clarifying the economic reasoning on consumer injury in privacy and data security cases. Ohlhausen suggested that the rate of technology change is making it increasingly difficult to assess what constitutes substantial harm to a consumer. The FTC needs to be conscious, Ohlhausen said, of weighing the benefits of enforcement against possible negative impacts on marketplace competition, which in itself can potentially be considered a harm to consumers. Ohlhausen believes the FTC’s Bureau of Economics is well positioned to provide guidance on this balancing act. The task force is currently an internal project at the FTC but input from external stakeholders will be sought at a later date. The format for the findings of the task force’s work is yet to be decided.

2. Process reform initiatives are underway at the FTC

Ohlhausen spoke of process reform efforts underway at the FTC to streamline the use of FTC resources.. For example, the Bureau of Consumer Protection and Bureau of Competition are trying to simplify the demands on businesses for information when issued with civil investigative demands (CIDs). Ohlhausen stressed that, while consumer protection is of paramount importance, efforts aimed at protecting consumers should not unnecessarily hinder legitimate business. As part of this process, the Bureau of Economics will be involved earlier in investigations to better inform agency decisions based on consumer harm.

3. Ohlhausen would like regulatory oversight of broadband providers to return to the FTC

Ohlhausen reiterated her recent support for Congress’ repeal of the FCC’s broadband privacy regulations. Ohlhausen declared that it does not make sense to classify ISPs differently from other entities that are collecting consumer data because this creates an uneven regulatory playing field and fragments consumer protection regimes. Ohlhausen stated that she, along with FCC Chairman, Ajit Pai, would like to return regulatory oversight of ISPs to the FTC. The FTC had this authority until 2015 when the FCC effectively removed it by classifying broadband providers as common carriers. Returning this authority to the FTC, Ohlhausen and Pai believe, would establish a comprehensive and consistent framework for privacy and data security in the US. However, in the meantime, Ohlhausen suggested that protections for consumers can be provided by the FCC through the Communications Act.

4. Ohlhausen views net neutrality as a marketplace competition issue

Ohlhausen reiterated her previously publicized view that net neutrality is an issue of antitrust and competition. This assessment would mean that net neutrality could be effectively regulated under the FTC’s Section 5 authority. While this view is shared by FCC Chairman Pai, Ohlhausen stressed that there is not currently a formal plan for transitioning to a new system. When questioned about where the FTC would find resources to regulate ISPs - especially in the context of Federal cutbacks desired by the Trump administration - Ohlhausen noted that the FTC already has significant expertise in the area. Additionally, she suggested that if there were multiple violations placing strain on agency resources, they would justify a shift of authority to the FTC.

5. Ohlhausen asserts strong support for the EU-US Privacy Shield Framework

Ohlhausen emphasized her support for the EU-US Privacy Shield Framework. She stated that the FTC is committing resources to ensure that European regulators view the FTC as an effective enforcer and that the Framework continues to succeed. When questioned about the potential impact of current court cases in Europe related to standard contractual clauses on the Framework, Ohlhausen expressed confidence in the Framework. She predicted that its structure makes it more resilient to legal challenges than the Safe Harbor Privacy Principles were.