FTC Needs Policy Statement on Unfair Methods of Competition, Wright Says
Commissioner Joshua Wright outlined his agenda for his time at the FTC, including a focus on encouraging the agency to issue a policy statement on unfair methods of competition, at an American Bar Association meeting Thursday. During the second day of the three-day conference, former FTC Chairman Jon Leibowitz spoke about the role of politics in the agency, and Division of Privacy and Identity Protection Associate Director Maneesha Mithal told attendees about consumer protection responsibilities when user-facing companies employ cloud service providers.
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The FTC should issue a policy statement that articulates its position on the definition of an unfair method of competition under Section 5 of the FTC Act, Wright said. “It’s the commission’s duty to provide that guidance” to the business community, he continued. The agency is “approaching nearly a century without a policy statement, articulating its views” on the topic, he said. “I simply do not believe that path is sustainable.” Wright said he will distribute a policy statement “more fully articulating my views” that can be used as a starting point for agency discussions. “I firmly believe that this commission is up to this important task, and I look forward to working with my fellow commissioners” on it, he said.
Wright said he expects to agree with the three other commissioners, responding to comments made at an earlier panel that concerns about a split commission are unnecessary because Wright is likely to vote similarly to Commissioner Julie Brill, a Democrat. “I think that’s true with respect to all three of the other commissioners,” due to the varying backgrounds, perspectives and experiences represented on the commission, he said. “Where we vote alike, whether it’s with Commissioner Brill or my colleague [Republican] Commissioner [Maureen] Ohlhausen, we may have different approaches to getting there."
Leibowitz said the commission under his leadership tried to consider the politics of pending investigations without compromising the examination of the facts. “We tried to do the right thing first and then deal with the politics,” he said. Leibowitz pointed to the recent search-bias investigation into Google as an example of a case where politicians weighed in. “We knew that any time we went up to the Hill to testify … someone was going to ask us why we were using that crazy Section 5 authority to investigate these great American companies,” he said. Ultimately, “the facts weren’t there to justify” a search bias monopoly case, which the commission knew would draw criticism, he continued. “We knew we would be criticized by competitors in the marketplace who were obviously disappointed."
Companies that outsource to cloud service providers are responsible for the way those providers treat customer data, Mithal said during a separate conference panel on Thursday. “There are a lot of questions that you want to ask the cloud service provider,” including whom at the company is responsible for data security and when data are shared with other parties, she said: “Make sure that their practices line up with your claims” to customers. Small companies may not have much bargaining power when contracting with third-party cloud service providers, but they can work through trade associations to get more bargaining power, Mithal said.