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FTC mulling rulemaking on data surveillance, retention, Lina Khan says

The Federal Trade Commission may soon initiate a rulemaking to address commercial surveillance tools and laxed data security practices, said commission chair Lina Khan.

The agency leader, who has previously called for the curtailment of market dominant companies, made her remarks to an audience of some 3,000 people at the International Association for Privacy Professionals 2022 Global Privacy Summit on April 11.

"Given that our economy will only continue to further digitize, market-wide rules could help provide clear notice and render enforcement more impactful and efficient," Khan said on stage.

Khan's speech was her first public address focusing on privacy issues as the FTC's leader. Her remarks stressed that modern legal frameworks are unable to clamp down on various firms' data collection and retainment techniques. She described aggregate data collection practices as highly lucrative, saying consumers can be targeted with "striking precision."

Such collections can lead to widespread fraud, consumer abuse, misinformation, cyberattacks and other ills, she said.

The FTC declined to provide further details on timing or provisions of the proposed rulemaking.

The agency under Khan is focused on potentially anticompetitive behavior by Big Tech companies, as well as certain rulemakings related to reforming existing privacy regulations.

But the agency is deadlocked in a 2-2 split, meaning that Khan cannot advance more contentious consumer protection proposals involving antitrust and privacy efforts against Big Tech companies until a Democratic majority at the commission is reached.

The Senate is in recess for the next two weeks, meaning that President Joe Biden's FTC nominee, Alvaro Bedoya, cannot finish his confirmation process until at least the end of April.

Bedoya, in particular, has specialized in regulations concerning privacy and facial recognition technology. A former Senate staffer, he is the founding director of the Center on Privacy and Technology at Georgetown Law.

In his previous academic publications, the FTC nominee has called for facial-recognition technology regulations and outlined model legislation that could be used by Congress or a state legislature. The FTC has no rules specific to the use of facial recognition, though the agency has provided guidance to organizations on ethical uses of the technology. Congress has not passed any federal legislation regarding the technology but some states like California and Virginia have their own laws in place.

If confirmed, Bedoya's influence at the FTC could also build momentum for crafting federal privacy legislation.

Beyond privacy, the FTC is also looking into changing how it reviews M&A transactions. In January, officials at the FTC and U.S. Department of Justice Antitrust Division announced a "broad-based overhaul" of existing merger guidelines aimed at better evaluating competition within specific markets, as well as potential competitive threats to emerging businesses. A draft of those guidelines is expected to be released later this year.