trending Market Intelligence /marketintelligence/en/news-insights/trending/pbHL73GnwUBOZZXa-HviWw2 content esgSubNav
In This List

FTC plans wide probe of data practices of large US tech companies


MediaTalk | Season 2
Ep.8 The Masters Returns

Case Study

A Sports League Maximizes Revenue from Media Rights


Next in Tech Episode 162: The cloud native journey


MediaTalk | Season 2
Ep.7 How The Business of Gaming is Changing

FTC plans wide probe of data practices of large US tech companies

The U.S. Federal Trade Commission is planning a broad investigative probe into the data practices of large tech companies.

FTC Chairman Joseph Simons recently confirmed the plan in post-hearing responses to members of the Senate Commerce Committee. S&P Global Market Intelligence obtained a copy of Simons' responses on March 21.

Sen. John Thune, R-S.D., asked Simons for a written response about whether Simons believes the agency should use a broad authority to investigate and gather information from companies, which comes from Section 6(b) of the Federal Trade Commission Act, on data collection, use, filtering and sale practices of large tech companies.

"I agree with you that the FTC's section 6(b) authority could be used to provide some much-needed transparency to consumers about the data practices of large technology companies," wrote Simons. "We are developing plans to issue 6(b) orders in the technology area."

Simons did not name any companies specifically, but Thune previously asked Simons about the authority at a November 2018 FTC oversight hearing and specifically named Alphabet Inc.'s Google LLC, Facebook Inc. and Inc. as companies that could potentially be targeted.

The FTC is already investigating Facebook for possibly violating a 2011 consent order on privacy practices. Facebook is reportedly facing a multibillion-dollar fine from the agency.

Despite Simons' eagerness to act, however, he warned that resource constraints remain a significant challenge for the commission.

"Evolving technologies and intellectual property issues continue to increase the complexity of antitrust investigations and litigation," wrote Simons in response to a question from Republican Sen. Jerry Moran of Kansas. "This complexity, coupled with the rising costs of necessary expert witnesses and increases in caseload, sometimes leads to financial and personnel resource limitations."

On March 20, Rep. Frank Pallone, D-N.J., who serves as chairman of the House Energy and Commerce Committee, wrote a letter with Rep. Jan Schakowsky, D-Ill., to Simons asking how the FTC would use additional resources to improve consumer privacy. "How would the FTC deploy new resources if it were to receive an additional $50 million for consumer protection and privacy? How about an additional $75 million? How about an additional $100 million?" the lawmakers asked.

Simons' answer may lie in his written responses to follow-up questions from senators. In that document, he detailed how the agency would potentially expend additional resources.

"In the past, we have requested additional resources for experts, information technology, and more full-time employees in support of our mission to protect consumers and promote competition," wrote Simons. "These continue to be critical areas of need for our agency. If we were to receive additional resources, they likely would be applied to these areas as needed."

A review of the past five annual budget justifications filed by the FTC shows that the agency has requested a modest funding increase in each of the last two years, with a $3.4 million budget increase request for fiscal 2019 and a $2.6 million budget increase request for fiscal 2020.

However, the $2.6 million increase would make up less than 0.01% of the agency's $312.3 million budget justification for fiscal 2020.

Turning to staffing, the agency has requested the same full-time equivalent positions for each of the past three fiscal years. The fiscal 2020 request of 1,140 full-time equivalent employees is less than the 1,211 the agency requested in fiscal 2017 and the 1,191 it requested in fiscal 2016.