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Federal Trade Commission Should Make Privacy Rules Against ISP Data Collection, Experts Say

To protect consumers in the digital revolution, experts say serious federal action on privacy can lead the way.

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Photo of Alan Butler, executive director of the Electronic Privacy Information Center

WASHINGTON, November 30, 2021 – Privacy experts are calling on the Federal Trade Commission to start the process of empowering itself to penalize internet service providers that collect unnecessary data from their customers to push targeted advertisements.

While discussions on privacy matters have overwhelmingly been focused on big technology companies and how they use customer data, experts at a Federal Communications Bar Association privacy symposium on November 16 said ISPs should be in the crosshairs of federal regulators.

Specifically, according to Alan Butler, president of the Electronic Privacy Information Center, unnecessary ISP data collection “demands action” from the FTC.

“The current status is that internet service providers are within the jurisdiction of the FTC and the FTC should act” and not wait for other federal actors to initiate ISP consumer privacy rules, said Butler. In 2017, Congress voted to disallow the Federal Communications Commission, which regulates the telecom space, from making regulations on protecting ISP consumer privacy, leaving the door open for the FTC to regulate providers’ privacy practices.

But there’s a wrinkle. While the agency can investigate and penalize business practices that are “unfair” and “deceptive,” according to the Federal Trade Commission Act, the FTC cannot issue its own federal privacy rules under its current consumer protection authority. To do that, the FTC would need to initiate a policy-making process by which the agency develops and issues regulations, which can then become federal policy.

Some experts think the FTC would be the best entity for developing such rules and should start the process, while others think the FTC’s regulatory process wasn’t made to give the agency its own privacy authority.

A separate federal agency for privacy regulation

As the FTC could receive funding to establish a privacy bureau under the House of Representatives’ reconciliation bill, Butler left open the question of whether the FTC should proceed by issuing broad privacy regulations or whether it should be should be “parsed out” into specific issues.

“The FTC has to adopt rules that establish fair data practices and seek to protect secondary data uses and sensitive data,” such as customers’ biometric and demographic data, he said. Butler said FTC privacy regulations would be a “temporary solution,” but there must be a separate federal agency that regulates privacy in the United States. “Funding for an FTC privacy bureau in the reconciliation bill is an important step forward,” he said.

The law at play for an FTC privacy authority

The FTC’s ability to regulate privacy would be governed by the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act. The Magnuson-Moss Act is notorious for adding several steps beyond the normal federal policy-making process, including a requirement that the FTC must find the problematic conduct to be “prevalent” in the marketplace.

“Magnuson-Moss was designed to choke off the FTC’s ability to engage in rulemaking,” said Georgetown law professor David Vladeck. Issuing privacy rules from the FTC would hard, he says, because the FTC must clear substantial hurdles before it can enforce any privacy rules.  “There’s a clear implication that the FTC is not able to promulgate a rule unless it can prove to a court after the rulemaking is done that the intrusive conduct is ‘prevalent.’ Well, Congress doesn’t define ‘prevalent,’” he added.

Butler argued that finding prevalence of data abuse won’t be hard. “The FTC wouldn’t struggle to find issues that are endemic to the industry,” he said. “The [agency] is capable of finding that its widespread use of location data unrelated to the use of the service as prevalent in the marketplace, and online behavioral tracking.” Thus, Butler argues, the FTC would be able to prove that data abuse substantially harms consumers and correctly uses its [proposed] authority to enforce privacy rules against technology companies.

Earlier this year, FTC chair Lina Kahn approved revisions to its Magnuson-Moss procedures, making it easier for the FTC to conduct its process for developing and issuing privacy rules. The rules grant the chair the authority to serve as the Chief Presiding Officer of the rulemaking hearing process, grants the commission the authority to control the conduct of the informal hearings, and eliminates a rule requiring the commission staff to publish a report analyzing the final rule before it is established as official agency policy.

Kahn said the changes to the rulemaking process will remove “extraneous and onerous procedures” that only delay the issuance of FTC rules.

FTC process could “surface” issues

Despite the difficulty of issuing privacy regulations, Vladeck said there may be value in initiating the process anyway, including “to surface the issues” of privacy and data collection by ISPs.

Vladeck highlighted “illegal dark patterns” as an example of a narrow issue the FTC can go after. The FTC characterizes “dark patterns” as methods companies use to keep consumers trapped in subscription services.

“The FTC is the only policeman on this beat,” Vladeck said, adding it could act as an effective enforcement regime against data abuses that affect consumers.

Reporter Justin Perkins is graduate of Howard University School of Law, with a focus on telecommunications and technology. He has in-house experience at the Federal Communications Commission, Comcast and NBC. He brings curiosity and insight to broadband news.

Cybersecurity

Biden On Lookout for Cyberattacks with Russia Massing on Border of Ukraine

The president says that, in the past, Russia has taken covert military actions.

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Photo of President Joe Biden on Thursday

WASHINGTON, January 20, 2022 – President Joe Biden said Thursday that the administration will be on the lookout for Russian cyberattacks in Ukraine as Russia’s President Vladimir Putin may be edging closer to invading Ukrainian territory.

Biden warned that, in the past, Russia has launched aggressive computer attacks that, while perhaps falling short of overt military action, have been daunting cyber-offensives of “military” officials not wearing Russian uniforms.

The comments came at the beginning of Thursday’s meeting of Biden’s Infrastructure Implementation Task Force. Biden briefly addressed rising tensions surrounding Ukraine.

Many critics of Russia, including Biden, have said that they Putin will pounce.

During his remarks, Biden said Moscow would “pay a heavy price” should it move any Russian troops across the Ukrainian border.

Following his foreign policy comments, Biden turned his attention to the planned task force talks on implementing the Infrastructure Investment and Jobs Act signed on November 15, 2022.

He turned to former New Orleans Mayor Mitch Landrieu, the administration’s unofficial “infrastructure czar,” to offer comments on the administration’s progress to press.

Biden specifically addressed the law’s implications for ongoing supply chain issues.

Since the back half of 2021, the world has faced historic shipping delays on a variety of commercial goods as global manufacturing systems continue struggling to grapple with the coronavirus pandemic and workforce shortages exacerbated by it.

Specifically, the tech industry has faced chronic shortages of semiconductor chips, perhaps worse than most other commodities. The shortages have crippled many digital industry supply chains. products.

Biden said that with the infrastructure law investment in physical infrastructure, including additional highways to alleviate traffic on the nation’s roads, will allow goods to be transported faster through existing supply chains.

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Cybersecurity

Telework Here to Stay, But Devices Need Beefed Up Security

The future of teleworking will need upgraded security.

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Allen McNaughton, sales director at Infoblox

WASHINGTON, January 19, 2022 – Remote work is here to stay, but that means getting up to speed on securing websites is critical, said a director at an information technology security company Wednesday.

At a Business of Federal Technology event, which posed the question “is hybrid forever?,” Kiran Ahuja, director of the U.S. Office of Personnel Management, said “hybrid remote work and telework policies are clearly helping not only federal agencies, but literally every single office, company, and organization in this country.”

But while Allen McNaughton, sales director at security company Infoblox, agreed that telehealth is “here to stay, no doubt about it,” he also made clear that the reality of hybrid work is not effective without protected technology.

“When you have telework, when you have people that can work anywhere in the world, the world is now your attack surface,” says McNaughton. McNaughton noted that there is now a greater opportunity for hackers to install malware on unsecure devices.

The country has already been gripped by high-profile cyberattacks, including on software company SolarWinds, oil transport company Colonial Pipeline, and meat producer JBS USA.

Some of the attackers simply gained access because devices had simple default passwords, raising concern among security experts about how prepared people are for full-time remote work and school.

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Privacy

Federal Communications Commissioner Starks Seeks to Encourage Democratic Principles Online

The commissioner noted the peril democracy and citizen privacy finds themselves in around the world.

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Federal Communications Commissioner Geoffrey Starks

WASHINGTON, January 14, 2021 – Speaking at an event hosted by Bridge for Innovation on Tuesday, Federal Communications Commissioner Geoffrey Starks says the private sector must lead in the fight to promote democracy and digital privacy rights online.

With increasing challenges to democracy around the world and citizen surveillance efforts by several international governments, as well as domestic concerns over privacy on social media platforms, Starks says private sector entities should work to set standards which promote democratic principles and privacy for citizens.

Just this month, Facebook faced a lawsuit – which it won – over access of third-party companies such as Cambridge Analytica, the British political consulting firm made famous when it was investigated in connection with alleged Russian interference and collusion in the 2016 United States presidential election, to users’ personal data.

Starks also emphasized that international diplomatic and regulatory bodies play a key role in upholding these norms.

He stated that China is looking to step up its role in these international bodies in attempts to influence policy to gain greater control over its citizens’ political activities and limit their privacy rights online.

At the beginning of November, President Joe Biden’s administration announced an initiative with several international allies to share information on surveillance programs of authoritarian regimes, with key focus landing on actions of the Chinese government.

Additionally, Biden said he would take action to limit U.S. exports to China of technology that  China uses for surveillance efforts.

U.S. technologies are on record being used in China for citizen surveillance, military modernization and persecution of Muslim Uyghurs in Xinjiang.

Looking to domestic broadband expansion efforts following the enactment of the bipartisan Infrastructure Investment and Jobs Act, Starks said the FCC will soon be collecting and posting pricing information from internet service providers which participate in the Affordable Connectivity Program.

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