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FTC Official Skeptical of Privacy Legislation FTC Official Skeptical of Privacy Legislation

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E-commerce

FTC Official Skeptical of Privacy Legislation

The Federal Trade Commission's newest member Tuesday voiced skepticism with the Commission's call for new legislation to help safeguard online privacy, saying it could undermine the agency's other mission of promoting competition.

During a discussion at the Hudson Institute, Maureen Ohlhausen, one of two Republicans on the five-member commission, said she believed the FTC and Congress should examine the commission's current authority and identify any holes before seeking new power to impose rules to protect online privacy.

"Before seeking new privacy legislation, I think it is important to identify a gap in statutory authority or to identify a case of substantial consumer harm that we would like to address but can't within our existing authority," she said.

In its final report on protecting consumer privacy online, the FTC called on Congress to implement legislation providing "baseline privacy protection" to augment industry self-regulatory efforts. The report did not specify what should be included in such legislation and instead called for working with Congress on crafting such a measure. The report was issued before Ohlhausen joined the commission in April.

Ohlhausen added that new privacy rules could hinder competition by favoring entrenched companies that already have access to consumer data over new entrants that want to obtain such data.

"There are many benefits to information sharing for consumers such as reducing online fraud, improving products and services and increasing competition in the market overall," Ohlhausen said. "So that's why I am concerned about treating privacy solely as a consumer protection issue. It also must be viewed through the competition lens if you want to reach the best outcome for consumers."

Ohlhausen's comments are likely to be welcomed by advertising and marketing industry officials who have voiced concerns with proposals that could restrict their access to consumer data for advertising and marketing. Advertising industry officials have been particularly concerned about efforts to give consumers a robust do-not-track option that would allow consumers to opt out of being tracked online with a few limited exceptions.

In response, the Direct Marketing Association announced on Monday it was creating a Data-Driven Marketing Institute, which will be charged with promoting the benefits of marketing and advertising for consumers. Industry officials have long argued that restricting online advertising could hamper the availability of free content on the Internet.

"I think in recent times especially with the conversations about do-not-track, there are people who want to make what we do sound awful and untoward and it's not," DMA acting President and CEO Linda Woolley told Tech Daily Dose last week. "It's exactly the opposite. This is exactly what consumers love and want."

Privacy advocates argue that consumers need to be given more information about what information companies collect about them and offered a choice about whether they want to be tracked online. Companies track consumers online in order to target ads to them based on their interests.

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