FTC Divided Over Increasing Agency Jurisdiction at Congressional Hearing
FTC commissioners were split at a Congressional hearing on Wednesday at the prospects of increasing FTC jurisdiction.
July 29, 2021—Commissioners of the Federal Trade Commission were divided Wednesday on whether to increase the enforcement authority of the agency to better regulate big technology companies.
The commissioners appeared at a hearing of the Subcommittee on Consumer Protection and Commerce, which is studying 16 proposed bills facing Congress that aim to alter the FTC’s jurisdiction.
“The American people deserve a twenty-first century consumer protection agency that meets twenty-first century threats,” said Rep. Jan Schakowsky, D-Illinois.
The 16 bills, targeted at increasing the FTC’s ability to regulate technology companies, expands its jurisdiction over what and how it is allowed to enforce the law.
Advocates of Increased FTC Authority
FTC Chairwoman Lina Khan said that reports of fraud increased by 20 percent last year, alleging certain business models have promoted this and for which businesses are able to claim immunity under the law. She did not mention which businesses she was referring, or which laws provided immunity, but commissioner Rohit Chopra said Section 230 of the Communications Decency Act was an impediment to the FTC’s mission of protecting consumers online.
Section 230 provides online platforms immunity for third-party content posted on their website, which means companies like Facebook, Instagram, and Twitter cannot be held accountable for fraudulent activity that takes place on their platforms.
Commissioner Rebecca Slaughter alleges that Section 230 protects online firms’ illegal conduct. Democratic commissioners prodded Congress to pass legislation that would increase the FTC’s jurisdiction to better police activity that harms consumers, such as online fraudulent activity.
“Bills that would end special protections for select industries would also strengthen our law enforcement,” Khan said. “For example, the Online Consumer Protection Act would clarify that platforms cannot claim special privileges when facing an FTC enforcement action. Meanwhile, the Protecting Consumers and Commerce Act and Removing Nonprofit Exemption Act would allow the FTC to challenge abuses by common carriers and nonprofit entities.”
Critics of Expanding FTC Authority
Earlier this month, the FTC held an open meeting of which Commissioner Noah Phillips was a critic. The FTC voted on several measures, including rescinding a rule that limited the agency’s enforcement powers, and allowed time for public comment after the vote had been taken. Phillips said he believes that allowing the public to comment after the vote has signaled a departure from public accountability.
“On July 1, without input from the public, we adopted rules to enable us to promulgate regulations with less objectivity, less oversight, and less public input,” Phillips said. “The Commission majority is reducing what it calls red-tape on the commission to impose more red-tape on American businesses—large and small.”
He added that regulating big technology companies, such as Facebook and Google, is work best suited for Congress, not an independent government agency with less democratic accountability.
“Well-crafted regulation can help consumers and businesses, but poor regulatory design can raise prices, stifle innovation, and reduce consumer choice,” Phillips said.
Phillips’ Republican counterpart on the Commission, Christine Wilson, joined in his critique, fearing that increasing the FTC’s jurisdiction could lead to FTC overreach in the future.
