FTC Reviews Enforcement and Regulation Priorities in Senate Subcommittee Hearing

The commissioners and subcommittee discussed federal data privacy legislation, efforts to stop illegal robocalls and the need for more resources from Congress.

11/28/2018 1:00 PM

FTC Reviews Enforcement and Regulation Priorities in Senate Subcommittee Hearing

Federal Trade Commission Chairman Joseph Simons cited a joint effort with the Federal Communications Commission to stop practices that lead to illegal robocalls, such as caller ID spoofing, during a hearing before the Senate Subcommittee on Consumer Protection, Product Safety, Insurance and Data Security Nov. 27.

“It would be a significant help to us in dealing with these robocalls if we got rid of the common carrier exemption because a lot of the robocalls are coming through specific carriers and these carriers know that they are transmitting robocalls,” Simons said in response to questions from U.S. Sen. Shelley Moore Capito, R-W.V., about how the FCC is addressing the issue.

“I cannot tell you how many times my constituents say to me Congress has got to do something about [robocalls],” Moore Capito said.

According to Section 5(a)(2) of the FTC Act, the commission is authorized to “prevent persons, partnerships, or corporations, except . . . common carriers subject to the Acts to regulate commerce . . . from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.” 

Moore Capito said legislation is needed to block the common carrier exemption.

Simons added that the FTC is focused on supporting technology developments to block robocalls while the FCC is empowering carriers to implement call blocking and identification.

Before the hearing, ACA International encouraged the subcommittee and FTC to discuss the commission’s approach to call blocking and labeling and stopping illegal robocalls.

In a letter to Moran and Ranking Member Richard Blumenthal, D-Conn., ACA International CEO Mark Neeb said: “Some of the FTC efforts in this area should be commended concerning the focus on bad actors making those illegal and abusive calls. However, going forward it is imperative that the FTC further consider how legitimate calls are being impacted and develop protocols and/or a regulatory framework directed at call blocking and labeling apps to require differentiation between legal informational calls and illegal robocallers.”

The FTC has issued 136 enforcement actions to stop illegal robocalls to date, according to a news release issued after the hearing.

“Technological advances, however, have allowed bad actors to place millions or even billions of calls, often from abroad, at very low cost, and in ways that are difficult to trace. The testimony noted and reiterated the FTC’s prior testimony in favor of eliminating the common carrier exemption, stating that the exemption is outdated and unnecessary, and that it impedes the commission’s work to tackle illegal robocalls,” according to the news release.

Meanwhile during the hearing, commissioners and subcommittee members discussed additional limitations Section 5 of the FTC Act presents when it comes to enforcement actions as well as the need for additional funding to support technology and staff resources, and the bipartisan federal data security legislation.

“There are limitations to Section 5 of the FTC Act, which is the main statute enforced by the commission. Section 5 does not provide for civil penalties, reducing the commission’s deterrent capability. In addition, the Commission also lacks authority over nonprofits and common carrier activity, as well as broad APA rulemaking authority for privacy and data security generally,” according to the news release from the FTC.

“I would say to you that I have a strong interest in ensuring that your agency has the resources it needs to effectively and efficiently protect consumers from unfair and deceptive practices,” said Subcommittee Chairman Jerry Moran, R-Kansas. “In part our efforts will be determined by what the administration and you request in your budget submission.”

Members of the commission agreed there is a need for federal data security legislation and expressed concern that state-level legislation could create conflicts for enforcement as well as businesses that need to comply with the law and for consumers to understand their protections.

“There have been concerns raised about [the] California Consumer Privacy Act to take effect in 2020—that it will influence other states’ [decisions] to enact their own versions of privacy regulations, each of which would potentially impose differing obligations on companies and different types of protections for consumers,” Moran said.

Commissioners said they were also concerned that federal and state regulations on data security and privacy could create a compliance burden for smaller companies.

“We should keep competition in mind,” said Commissioner Noah Phillips. “For large businesses, it’s easy to deal with lots of different compliance costs. For small businesses, having one clear rule can help them compete.”

Christine Wilson added, “Businesses need clarity and predictability so that we don’t dampen innovation and kill competition. If there are small companies trying to get into the marketplace and they’re looking at a patchwork of laws, it raises the costs for them to enter.”

The FTC supports data security and privacy legislation that would be enforced by the commission.

“While the agency remains committed to vigorously enforcing existing privacy-related statutes, Congress may be able to craft legislation that would more seamlessly address consumers’ legitimate concerns regarding the collection, use, and sharing of their data and provide greater clarity to businesses while retaining the flexibility required to foster competition and innovation, according to the news release.

An archive of the hearing is available on the subcommittee’s website.

Related Content from ACA International:

California Measure Billed as One of the “Toughest” Data Security Laws in the U.S.

ACA Encourages Senators to Review FTC Approach to Call Blocking and Labeling

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