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FTC nominees all cite evolving technology as a top 3 challenge facing agency

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FTC nominees all cite evolving technology as a top 3 challenge facing agency

All four of President Donald Trump's nominees for the Federal Trade Commission identified technology as one of the major challenges facing the agency in remarks prepared ahead of a Senate Commerce Committee hearing on Feb. 14.

In answering a question about the top three challenges for the FTC, some of the nominees focused more on concerns about merger reviews and others on the role the agency can play in tamping down rising healthcare costs, but all four mentioned the difficulties in keeping up with advancing technology.

Joseph Simons, an antitrust lawyer nominated to take over as the FTC's next chairman, said "rapid changes in technology and cyber threats provide a significant challenge to the agency's ability to fulfill its consumer protection mission." He said it will be important for the agency to balance protecting consumers while still allowing companies to "use data to enhance competition."

Similarly, nominee Christine Wilson, an executive at Delta Air Lines Inc., said that advances in technology create "enforcement complexities" for the FTC that touch on some of the most controversial public issues, including "the intersection of intellectual property and antitrust, data security and privacy." While Wilson identified this as a challenge, she also stressed that she sees the FTC as having the expertise needed "to be a thought leader" in this area.

The other two nominees for the five-person commission are Rohit Chopra, a senior fellow at the Consumer Federation of America, and Noah Joshua Phillips, chief counsel to Sen. John Cornyn, R-Texas. Chopra said the agency must "confront the rapid development and use of big data in today's modern economy" and the questions it raises in terms of competition and consumer privacy. Phillips simply cited the difficulty of keeping up with new technological developments.

Commerce Committee Chairman Sen. John Thune, R-S.D., said during his opening remarks at the hearing that he expects the FTC to have an "increased focus on the American tech sector and the growing influence of Silicon Valley."

Following up on this point later, Thune asked the nominees about the state of competition among big tech firms, such as Alphabet Inc.'s Google Inc. and Facebook Inc., especially given the growing power of search and social media. "Some argue that big tech should be subject to more antitrust scrutiny," Thune said, noting that this might require more nuance than is currently written into the law.

Simons said that at a high level, "I believe that big is not necessarily bad," as some companies get big because they offer a good service at a low price. "We don't want to interfere with that," he said.

In other instances, though, companies may use anticompetitive means to either get big or stay big. Without saying whether he believes Facebook, Alphabet or any other big tech firm is guilty of such behavior, Simons said that in any instance where a company is engaging in anticompetitive behavior, the FTC should be "vigorously enforcing antitrust laws and attacking that conduct."

Wilson added that she believes the antitrust laws as they are written today are "broad and flexible and capable" of adapting to evolving technology under the FTC's current jurisdiction.

The question of FTC jurisdiction in the technology space is something that Democrats and Republicans in Congress are somewhat divided on, especially in the wake of the Federal Communications Commission's vote at end of 2017 to overturn its net neutrality regime. The FCC voted 3-2 to reclassify broadband so that it is no longer subject to common carrier regulation under the Communications Act. While broadband was classified as a common carrier service, it was exempt from FTC jurisdiction, giving the FCC almost sole authority for enforcement. As part of the reclassification, however, the FTC and FCC worked out a memorandum of understanding outlining which agency will be responsible for various online consumer protection efforts with regards to internet service.

At the hearing Feb. 14, Sen. Bill Nelson, D-Fla., said the FTC "is not the agency for net neutrality." He added, "Despite the amazing things the FTC does, it does not have the expertise, the resources or the authority to adopt forward-looking rules to protect broadband consumers."

Nelson reiterated his belief that the FCC's net neutrality rules, designed to ensure that all legal internet traffic is treated equally by network operators, should be restored. He left the door open for Congressional action on this point, saying, "Only lasting bipartisan net neutrality legislation with real protections can bring the certainty necessary to fully protect consumers and preserve the FCC's authority."

Others, including acting FTC Chair Maureen Ohlhausen, who is set to leave the agency for a judicial appointment, have argued net neutrality falls squarely in the agency's purview given the FTC's role in protecting consumers and preventing anticompetitive behavior. Ohlhausen has said the agency "stands ready to protect broadband subscribers from anticompetitive, unfair, or deceptive acts and practices just as we protect consumers in the rest of the internet ecosystem."