FTC Chief Eyes ISP, 'Platform' Activity as Agency Unveils Broader Hearings, Review
FTC Chairman Joseph Simons plans to scrutinize ISPs and internet "platforms" as part of a broader agenda to update consumer protection and antitrust enforcement. "We're going to vigorously enforce our authority in this space," he told reporters Wednesday, when asked about reinstatement of FTC jurisdiction over telco and cable ISPs under FCC reclassification of broadband providers as not common carriers. Internet platforms, such as Amazon, Facebook and Google, also will draw attention due to their size, reach and potential for anticompetitive behavior, he said.
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The FTC plans public hearings this fall and winter "on whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy," it announced, citing 1995 hearings by then-Chairman Robert Pitofsky. "Vigorous enforcement -- that’s our mantra," Simons said. He said a decades-long rough consensus about the FTC's approach has been subjected to serious questions in recent years: "Now is the time to review, and either confirm the old consensus or come to a new one."
Simons said broadband ISPs and internet platforms will come under scrutiny, even though the FTC isn't focused on any particular industry. He said the FCC reclassifying broadband service from Communications Act Title II (regulating common carriers) to Title I cleared the way for FTC authority over ISPs, which was previously barred under the FTC's common-carrier oversight prohibition. Asked about criticism that ISPs could avoid FTC enforcement if they block and throttle internet traffic as long as they disclose it, he said the commission also has an antitrust mandate to protect competition. If ISPs are doing something anti-competitive, "we're going to be all over it," he said.
Simons suggested the FTC might also seek to review some cable and telco deals, which have largely been reviewed by DOJ. "Those are really interesting transactions," he said. "We're very interested." The FTC and DOJ have a very close working relationship, he said: "We expect them to be heavily involved" as the FTC conducts its overall review.
Simons said internet and tech platforms draw scrutiny in part due to their success. He said some of them are so big because they are producing "terrific products" that consumers value, and the FTC doesn't want to stop that. In antitrust, he said, the most likely areas for anticompetitive behavior are where there's market power, and that raises questions about the platforms. He wouldn't comment on the FTC's Facebook investigation and potential remedies, saying that "more generally, we're looking at remedies overall to see if there's anything we can do to improve."
Simons voiced skepticism about using behavioral remedies to address antitrust concerns, which the FTC has shied away from except in defense contractor cases. Structural remedies such as divestitures are generally better, he suggested. He wouldn't comment on the recent AT&T/Time Warner victory in court but said mergers and acquisitions, including vertical deals, are very fact-specific, making it hard to extrapolate between cases.
The FTC will remain very heavily focused on data breaches and privacy, said Simons, who noted artificial intelligence and virtual currencies are two other areas of interest. If consumer protection and antitrust enforcement have shortcomings, the agency will look to address them under existing authority, and if there are statutory "gaps," it could seek new legislation, he said.