FTC’s Wilson Open to Mag-Moss Privacy Rulemaking, Echoing Dems

If congressional inaction continues, Republican FTC Commissioner Christine Wilson said she's open to a Magnuson-Moss privacy rulemaking, an idea her Democratic colleagues proposed. Wilson said Friday she opposes rulemakings or “any attempt to engage in industrial engineering” unless there's a market failure. “Here I believe there is a market failure,” she told a Silicon Flatirons event. “There is such a significant asymmetry between what companies know about how data is collected and used and what consumers know.”

She noted the FTC is subject to Magnuson-Moss rulemaking procedures, which carry a higher burden and take longer than Administrative Procedure Act rulemakings. Ex-Chairman Joe Simons and commissioners repeatedly asked Congress for APA rulemaking authority regarding privacy.

“I actually am beginning to consider the wisdom of launching a Mag-Moss rulemaking on privacy and data security,” Wilson said. “I would hope that Congress will act, but if Congress doesn’t act, maybe we do spend that time ... in order to bring certainty and predictability and transparency for consumers.”

She noted positions from acting FTC Chair Rebecca Kelly Slaughter and Commissioner Rohit Chopra, both Democrats, who said it may be appropriate to move forward on rulemaking to adopt regulations to protect privacy, in the absence of congressional action. Consumers aren’t able to make informed choices about which products and services they should use, said Wilson: “It is possible that the FTC could move forward with rulemaking on both privacy and data security in the absence of a congressional request. It will take longer.”

Colorado Attorney General Phil Weiser (D) said he supports the FTC working through the matter to potentially issue a rulemaking. “I wish I could give you a virtual hug,” he told Wilson. He agreed with her that a Magnuson-Moss rulemaking wouldn’t be the best or second-best solution and said her reluctance and openness are appropriate. It’s a time of political dysfunction, he said, saying the FTC and other agencies are acting in entrepreneurial ways because Congress isn’t operating effectively.

The FTC’s $5 billion privacy settlement and order with Facebook is a good model for “what can be accomplished in the absence of federal privacy legislation,” said Wilson. “But we pushed our authority to the limits. We can’t change the business model. ... We’re doing everything we can with the limited authority we have now.”

Privacy issues are so complex that there’s intersectional jurisdiction, said Democratic FCC Commissioner Geoffrey Starks. It’s important for consumers to know they can trust digital services, he said, citing potentially “shady” geolocation data practices that result in safety breaches (see 1903210065): “We simply cannot have that.”

Consumers don’t think they’re being treated fairly, which undermines trust that the marketplace is working, said Weiser. It’s partly a competition issue, he said, saying when platforms face healthy competition they have to deliver good services to consumers.

Consumers want competition on the merits and for companies to compete aggressively for consumers’ business, said Wilson. She noted enforcers are “referees, not star players,” and some recent antitrust proposals would move enforcers into the position of “picking winners and losers,” which isn't the goal of antitrust law. Free markets deliver the best outcomes for consumers, she said.