FTC's McSweeny Sees Little Change in How GOP-Dominated Commission Will Operate

With FTC Commissioner Edith Ramirez stepping down Feb. 10 (see 1701130030), the commission will be down to two members. President Donald Trump hasn't publicly named nominees for two Republican and one Democratic seat. McSweeny told us it's too soon to tell how a full commission would act but said the agency has generally operated in a bipartisan manner that seeks to foster a competitive market free of deception and fraud. "I would assume that my new colleagues coming in would share those values and understand that role," she said.

On Ohlhausen, McSweeny said they've gotten along well, with a long track record of reaching compromises, and both believe in vigorous antitrust and consumer protection enforcement. She said the commissioners have reached unanimous agreement more than 90 percent of the time. But McSweeny said she doesn't really understand the words "regulatory humility" -- which is Ohlhausen's oft-stated philosophy of recognizing limits of government intervention in the marketplace (see 1701250036 and 1611160017) -- since the agency is an enforcement agency. Asked about Ohlhausen's dissent in the FTC's complaint alleging D-Link Systems sold insecure routers vulnerable to hackers (see 1701060046), McSweeny said the commission should use its authority in data security cases, especially IoT devices that can be used in distributed denial-of-service and ransomware attacks. Backing off on this issue would be a mistake, she said.

A major topic during the Brookings discussion was the expected repeal of the FCC open internet order. McSweeny said she didn't think there will be wholesale repeal of net neutrality's regulations, calling the internet a "global, ambient, always-on system" that's the essential connection to modern conveniences for people. "The notion that we’re going to get rid of basic rules … with the ISPs [as] our gateways to the system seems crazy to me," she said, saying she hopes regulators will be "far more strategic" in how they address changes to the regulations. She said the FTC has an important role as an ex post consumer protection enforcer, which is the commission's model for holding companies to their commitments. But she said it's also "a bit disingenuous" to think the model is sufficient to protect consumers, innovators and entrepreneurs because monitoring activities require lengthy investigations and that will be problematic. "We really can't protect internet openness for the little guy against all these giant interests without some clear ex ante rules," she added.

"If there are disruptions … along those on-ramps, if someone is allowed to favor traffic …then that I think would short circuit all of the advances and opportunities and successes and innovations that we’ve seen," said Clyburn. "Any tinkering around the edges will have a ripple effect that I think could have the potential of being stifling when it comes to innovation and opportunity and access." She said if people think ISPs will have their best interests in mind, they will be fine with the proposed changes, but many used to having internet freedoms will be hesitant of any significant changes to net neutrality regulations.

Responding to a question from Brookings fellow/moderator Nicol Turner-Lee about the impact on privacy if the order is repealed, McSweeny cited a 2014 Pew survey that said 91 percent of adults think consumers have lost control over how their personal data is collected and used by companies. She said people are "shedding data all the time" and becoming more vulnerable to hacks, and this consumer trust problem has been persistent and isn't getting better.

She said the FTC has a gap in its authority to oversee common carriers, which needs to be fixed. She said the FTC's recent cross-device tracking report (see 1701230054) revealed that people don't know they're being tracked across different devices and people need to get some kind of notice and consent or privacy choices on apps, IoT and phones. "We should actually convene interagency groups to make sure that we're all on the same page," she said. If FCC privacy rules are withdrawn, that will be "very sad" for consumers and should prompt a serious conversation on providing protections, said the Democratic trade commissioner.

Responding to Turner-Lee's question about how the two agencies jurisdictions could change legislatively in the new political environment, Clyburn said the agencies have complementary, overlapping jurisdictions, which is positive, especially for protecting consumers: "Homing in on these clear siloed distinctions -- as if we live in a clear, siloed world as if we consume in a clear siloed way -- I think would be a little bit too narrow and not take into account converged and ever complex ecosystem." McSweeny said it would be a "huge mistake" to lose the network expertise in the FCC for consumer protection enforcement. Segmenting out areas of expertise such as in privacy and data security, siloing the agencies and forcing them to work more separately would be "problematic," she said.

On the Trump administration's regulatory reduction proposal, McSweeny said she hopes that "doesn't translate into being against" consumer protection and antitrust enforcement. As she has before, she described the FTC as an independent bipartisan enforcement agency, not a regulator. “We do a job that I think most people in America actually really value," she said. "More or less, you can think of it conceptually as standing up for the little guy, especially if the system is rigged against them.” Clyburn said consumers should have meaningful choice and more transparency on privacy. "It's overwhelmingly clear that consumers want to be in the driver's seat when it comes to their information," as the FCC has promoted, she said. "History will prove us right." Clyburn said she's focused on providing more affordable broadband access to unconnected communities -- those "stuck in digital darkness for decades."