The FTC wants to make “clear” that sharing certain types of sensitive data is “off-limits,” and the agency is paying close attention to AI-driven business models, Consumer Protection Director Samuel Levine said Wednesday. Speaking at the Future of Privacy Forum’s D.C. Privacy Forum, Levine highlighted instances where the FTC has reached settlements with data privacy violators that include prohibitions on sharing certain types of data. He noted five cases where the FTC banned sharing of health information in advertising, another case banning sharing of browsing data for advertising and at least two other cases in litigation in which the agency wants to ban sharing sensitive geolocation data. “We have made clear in our words, in our cases, complaints that certain uses of sensitive data can be off-limits.” FTC Chair Lina Khan has made similar remarks in the past (see 2401090081 and 2208290052). Levine said banning those practices will depend on the agency’s three-part FTC Act test for unfairness. Data sharing practices violate the FTC Act if they cause or are likely to cause substantial consumer injury, can’t be reasonably avoided by consumers and the potential harm isn’t outweighed by “countervailing” benefits to consumers or competition. So much of how “people experience” social media platforms and how data is handled is driven by behavioral advertising business models, said Levine. Some companies are clear about the business model incentives for AI, while other companies are “not being as clear,” he said. “It’s not illegal to want to make money. We want that in this country, but we do want to think about how these business models shape development of the technology and contribute to some of the harms we’ve seen.” It makes sense the director has a “strong view” there’s a “wide range” of statutory authority for the FTC when it comes to AI-driven data practices, said FPF CEO Jules Polonetsky. The FTC already has a “substantial ability” to enforce against AI-related abuse under its consumer protection regulations, Polonetsky told us. However, hard societal questions surround the technology that only Congress can answer, and that starts with a federal data privacy law, he said.
The Biden administration’s merger guidelines give agencies a license to challenge any transaction without the support of sound antitrust analysis, CTA said in a report released Wednesday (see 2312180069). The 2023 guidelines, issued by the FTC and DOJ, “make incorrect claims about the effects of competition on specific performance variables” and “focus on performance variables that are poor indicators of the effects of mergers on consumers and society,” CTA said. FTC Chair Lina Khan and DOJ Antitrust Division Chief Jonathan Kanter defended the administration’s antitrust enforcement approach during an event Tuesday (see 2406040065). CTA argued the guidelines let the agencies define dominant market positions in “whatever nebulous way” they choose while disregarding decades of economic literature. The guidelines' authors assume terms like “durable market power” and “persistence of market power” are “understood,” CTA said. The association cited examples of “nebulous guidance,” including the guidelines' claim that “the persistence of market power can indicate that entry barriers exist, that further entrenchment may tend to create a monopoly, and that there would be substantial benefits from the emergence of new competitive constraints or disruptions.” The agencies have not defined those terms, said CTA.
The House Appropriations Financial Services Subcommittee advanced its FY 2025 funding bill Wednesday with language that would couple an increase in the FCC’s annual funding with riders barring the commission from implementing GOP-opposed net neutrality and digital discrimination orders. The subpanel advanced the funding bill on a voice vote, but Democrats vowed to fight the FCC language and other riders when the measure reaches the full House Appropriations Committee. The measure also proposes cutting the FTC’s annual funding for FY25 from what lawmakers allocated the agency via a March FY24 minibus package (see 2403280001).
It’s a “good thing” business leaders are thinking harder about antitrust risk when pursuing potential deals, even if the Biden administration’s policies have been “disorienting,” FTC Chair Lina Khan said Tuesday. Khan and DOJ Antitrust Division Chief Jonathan Kanter defended their antitrust approach during CNBC's CEO Council Summit.
The FCC’s updated data breach notification rule “encapsulates the wrong way for the administrative state to approach rulemaking,” TechFreedom’s 6th U.S. Circuit Appeals Court amicus brief said Thursday in support of the five petitioners seeking to invalidate the rule as contrary to law (see 2402210026).
The FTC and SEC should hold UnitedHealth Group accountable for “negligent cyber practices” that exacerbated a February ransomware attack against the company, Senate Finance Committee Chairman Ron Wyden, D-Ore., wrote the agencies Thursday. UHG confirmed hackers initially breached a remote access server because it wasn’t protected with multifactor authentication, Wyden said: “The cyberattack against UHG could have been prevented had UHG followed industry best practices. UHG’s failure to follow those best practices, and the harm that resulted, is the responsibility of the company’s senior officials.” Wyden urged the FTC and SEC to investigate UHG’s “numerous cybersecurity and technology failures” and determine if it broke federal laws. The FTC confirmed receiving the letter but declined comment. The SEC said Chair Gary Gensler will respond to Congress directly. UHG defended the company’s response to the attack on Change Healthcare. A spokesperson said Thursday: “The fact that the company moved quickly and effectively in response to this attack is testament to our company’s commitment to strong cybersecurity.” UGH is looking forward to working with policymakers and stakeholders to develop “strong, practical solutions,” the company said.
Scams on Facebook and Instagram comprised nearly 75% of social media-related fraud reported to the FTC in 2023, the agency said Friday. The FTC released data from reports to its Consumer Sentinel Network. Facebook accounted for 51% of fraud originating on social media, and Instagram accounted for 22%. Best Buy’s Geek Squad, Amazon and PayPal were the top three most-impersonated companies, according to the report. Microsoft ranked No. 4, Apple No. 7 and Comcast No. 8. Consumers reported losing $60 million to Microsoft impersonators, more than Geek Squad, Amazon and PayPal scams combined. Consumers reported losing $15 million to Geek Squad impersonators, $19 million to Amazon scammers and $16 million in PayPal-related scams.
DOJ and the FTC on Thursday requested public comment on “serial acquisitions and roll-up strategies” that the agencies believe harm competition. The FTC said enforcers are seeking information in all sectors of the economy. Cybersecurity and aftermarket repair were among the agencies’ highlighted sectors. DOJ and the FTC want to ensure antitrust enforcement tools are keeping pace with the modern economy, they said. “Firms can use serial acquisitions to roll up markets, consolidate power, and undermine fair competition, all while jacking up prices and degrading quality,” FTC Chair Lina Khan said. DOJ Antitrust Division Chief Jonathan Kanter said, “Public input about where these acquisitions have occurred and how they have impacted competition will help us identify and pursue harmful conduct.” Comments are due July 22.
DOJ’s lawsuit challenging Google’s search dominance will prove to be an “historic” case, Antitrust Division Chief Jonathan Kanter said Tuesday. Speaking at the American Economic Liberties Project’s Anti-Monopoly Summit, Kanter touted the department’s “unprecedented record of action” against corporate consolidation, including antitrust cases, merger challenges, criminal prosecutions and amicus filings. The department sued Google in January 2023, claiming the platform used anticompetitive tactics to protect its search and advertising dominance. There’s less smartphone innovation because of Google’s practices, Kanter said Tuesday. Enforcers must keep digital markets competitive because the current “power imbalance” is “particularly stark” in the tech sector, he said: The law doesn’t permit the “hobbling of innovation” in the interest of preserving monopoly power. The Biden administration is “not afraid” of fighting for consumers, FTC Chair Lina Khan said. Enforcers have been able to score “concrete policy victories” against major corporations despite their seemingly “infinite resources,” she said. Businesses are learning to “take the law seriously” because the Biden administration has been willing to challenge anticompetitive behavior, said Kanter. He noted that more than 20 entities have abandoned acquisition plans in the past 30 months while facing DOJ antitrust scrutiny. Columbia Law School professor Tim Wu, a former White House competition policy adviser, urged policymakers to adjust antitrust remedies. The current antitrust movement won’t have any lasting impact unless remedies are modernized to hold corporations more accountable, he said.
The FCC came in 13th out of 26 midsize federal agencies in the best places to work in the federal government rankings released Monday. Its 2023 employee engagement and satisfaction score, 73.6, was almost identical to its 2022 score. The FTC ranked 9th out of midsize federal agencies, with an engagement and satisfaction score of 75.4, jumping notably from 2022's 67.3. Among subcomponent agencies, NTIA ranked 180 out of 459, with an engagement and satisfaction score increasing to 74.8, compared with 2022's 65.3. The rankings, by the Partnership for Public Service and Boston Consulting Group, largely rely on Office of Personnel Management data obtained through its Federal Employee Viewpoint Survey.