After Draft Details Emerge, Rep. Eshoo Signals Need to Replace Ill-Equipped FTC
The FTC isn’t equipped to handle modern enforcement challenges, Rep. Anna Eshoo, D-Calif., told us, saying there’s a strong case for creating a new data privacy agency. Eshoo and Rep. Zoe Lofgren, D-Calif., are drafting a bill that would create such an agency modeled after the Consumer Financial Protection Bureau (see 1906250033).
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The draft legislation is notable because Eshoo and Lofgren are senior members of the House Commerce Committee. Chairman Frank Pallone, D-N.J., is working with Consumer Protection Subcommittee Chair Jan Schakowsky, D-Ill., on their own privacy legislation.
It’s not the FTC’s fault it “lurches from one fine to another,” Eshoo said. “We’ve just fallen behind because we don’t have overarching national policy on this issue.” There’s no doubt Congress needs to devote more resources to protecting online privacy, Rep. Kathy Castor, D-Fla., told us Thursday. A participant in Schakowsky’s privacy talks (see 1905240036), Castor said the question is whether the FTC needs “beefing up” or replacement with a new entity. She’s open to either: “We need a debate on that,” she said, noting Congress also needs “greater expertise at our fingertips.”
“Creating a completely new agency is unnecessary and insane,” said TechFreedom President Berin Szoka. “I don't even know where to start in explaining how bad an idea that is.” He called Eshoo “clueless,” given the FTC doesn’t often issue fines. It imposes civil penalties only for violations of rules and consent decrees. Democrats have complained about the FTC's lack of authority for a decade, he said, citing attempts to include fining authority in the Dodd-Frank Act, which established the CFPB. Szoka supports granting the FTC additional resources and elevating its Division of Privacy and Identity Protection to a new bureau. That might not be the best solution, but creating a whole new agency certainly isn’t, he said.
The Electronic Privacy Information Center strongly supports creating a new federal data protection agency, said Executive Director Marc Rotenberg. “The Federal Trade Commission has failed as a privacy agency. It does not even enforce its own consent orders,” he said. The agency, he noted, hasn’t brought a single enforcement action against Facebook, despite its 2011 consent agreement and subsequent company mishaps.
The FTC already has the necessary expertise, said former FTC Consumer Protection Bureau Financial Practices Division Assistant Director Duane Pozza, now a partner at Wiley Rein. Establishing a new agency creates unnecessary bureaucracy and complications, he said. The CFPB and its impact on the financial services industry is a good example of unnecessary disruption when creating a duplicative agency, he added.
There’s no evidence to suggest creating a new CFPB-modeled federal data agency is a “good idea,” said Providence Group Executive Chairman Dan Caprio. But the FTC, which should be the primary privacy enforcer and regulator, “certainly needs more resources,” he argued.