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As privacy issues worsen, Congress looks to the FTC

As privacy issues worsen, Congress looks to the FTC


Lawmakers are facing tough partisan divides over privacy

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Illustration by Alex Castro / The Verge

Lawmakers are preparing to hold the first in a series of data privacy hearings on Wednesday in a fresh effort to bolster consumer data protections on platforms like Facebook, Twitter, and Google. 

On Wednesday, the Senate Commerce Committee plans to discuss the creation of a new privacy bureau at the FTC and “the need for a comprehensive federal privacy law.” It’s an uncomfortable dodge since Congress has thus far been unable to pass any such privacy law. But with states enacting their own privacy framework, there’s more pressure than ever for some part of the federal government to take action.

As legislative efforts have stalled, the FTC could be the Biden administration’s best bet at regulating the tech industry’s grasp over consumer data, even if it could take years to finish the agency’s rulemaking process. Still, experts fear the agency may not have the power, by itself, to issue strong enough rules to truly reel in tech’s data power.

“That is not an effective way to build trust with consumers”

“If Congress doesn’t pass privacy laws, and we spend the next six to 15 years in a [rulemaking] process where the FTC has to hobble together a set of rules within the confines of their existing regulatory authority, that is not an effective way to build trust with consumers about the way companies are handling their data,” Morgan Reed, President of The App Association, told The Verge in an interview Tuesday. Reed is expected to testify at Wednesday’s hearing.

Still, the FTC is in the best position to enact some form of privacy regulation — and lawmakers have started piling on the pressure for the agency to act.

Last week, several lawmakers, including a handful on the Senate Commerce Committee, wrote a letter to FTC Chair Lina Khan calling on the commission to write its own data privacy rules. The request came just a few months after the FTC voted to update its rulemaking procedures, making it easier for the agency to issue data rules. The letter also followed President Joe Biden’s nomination of Alvaro Bedoya, a longtime privacy and facial recognition critic, to become the third FTC Democrat. 

“In parallel to congressional efforts to create federal privacy laws to give power back to consumers, the Commission should take advantage of every tool in its toolkit to protect consumers’ privacy,” the lawmakers wrote last week.

Congress is also mulling over the possibility of sending the FTC an additional $1 billion in funding through the proposed $3.5 trillion budget reconciliation package to build out a new bureau to focus solely on privacy enforcement. But with Republicans and moderate Senate Democrats opposed to the trillions in additional funding, the money could be left in legislative limbo until both the House and Senate approve a separate bipartisan infrastructure package. 

“The FTC is not very well-funded to do this kind of work. It has limited resources and limited capabilities to engage in privacy work, plus all of the other work it has to do,” Sara Collins, privacy policy counsel at Public Knowledge, said Tuesday. “It’s a competition authority. It’s a general consumer protection authority. They have to have more resources to do this work.”

Still, experts like Collins are optimistic that any new FTC rulemaking could force Congress’ hand on legislative reform. Several states, including California and Colorado, have already enacted their own state bills as well. This patchwork of regulation could build more momentum for lawmakers to tackle a federal law once and for all.

“I think it’s really important to develop strong privacy laws while also giving the Commission the authority to enforce those and to conduct rulemaking specifically on privacy technology vendors,” Jeff Gary, policy director at Georgetown’s Technology, Law and Policy Institute, said Tuesday.