Simons to Senate Commerce: Policing Political Speech Not In FTC Purview

The FTC has jurisdiction over “commercial speech,” not political content curation, said Simons: “If we see complaints that are not in our jurisdiction, then we don’t do anything. If we see complaints that are, we take a closer look and figure out whether there’s a violation. And then we determine whether it’s appropriate to act.” The EO directs the agency to review speech complaints (see 2007230072) and “consider taking action” to prohibit unfair and deceptive practices by entities covered under Section 230 of the Communications Decency Act. The agency hasn’t taken “any action according to the executive order,” Simons said.

Ranking member Maria Cantwell, D-Wash., announced plans to introduce federal legislation granting the FTC price-gouging authority (see 2006190055). The law would make clear it’s an illegal practice and would impose civil penalties for deceptive emergency-related scams like those during the COVID-19 pandemic.

“This one is a layup I think a lot of people agree on,” Cantwell told us, saying she hopes to gain Republican sponsors. “We’ll just have to get the definition right and the parameters right.” The FTC should be able to use the authority in a time of “emergency for the defined period of time that just basically says these are excessive pricing,” she said.

Wicker said at the hearing he’s looking forward to seeing the bill. “We’d be very open to discussing it,” he told us afterward, saying there haven’t been extensive discussions, which may be a function of scheduling.

Senate Consumer Protection Subcommittee Chairman Jerry Moran, R-Kan., noted his panel has explored the issue with the FTC. Whether he can support a bill from Cantwell, he told us, “all depends on the details of the bill, but price gouging is not acceptable, is contrary to protecting consumers.”

“There ought to be certainly federal authority clearly on price gouging,” Senate Consumer Protection Subcommittee ranking member Richard Blumenthal, D-Conn., told us, noting his support in other contexts. “I look forward to supporting hers or some measure.”

“It sounds like something I’d support, but it is not something I’ve thought about yet,” Sen. Roy Blunt, R-Mo., told us.

FTC Testimony

The FTC Technology Enforcement Division is pursuing a number of “very significant investigations” against Big Tech platforms, Simons told the panel.

He asked Congress to clarify Section 13b of the FTC Act, which the agency relies on to recoup penalties for consumers. He also urged passage of federal privacy legislation, with civil penalty authority, FTC jurisdiction over nonprofits and common carriers and Administrative Procedure Act rulemaking, a request Simons has made repeatedly. Commissioners Noah Phillips, Rohit Chopra, Christine Wilson and Rebecca Kelly Slaughter discussed the importance of passing federal privacy legislation, though the Democrats raised concerns about preempting state laws.

Chopra and Wilson cited the need to scrutinize CDA Section 230 and potential abuse from the tech industry. There’s bipartisan consensus the protections have been abused, and scrutiny is warranted, Chopra said in response to Wicker’s questions about the EO. Big Tech has “too much power” to dictate policy and regulation, the FTC member said without addressing Trump’s order. Chopra made some “very good” points about some companies being too powerful, Wicker said.

Sen. Mike Lee, R-Utah, raised speech concerns about online content moderation. Phillips said it’s a difficult question, but online speech moderation has First Amendment implications, and it’s something the FTC has to keep in mind.

Wilson noted her public statement with Chopra (see 2006110065) about the need to review targeted advertising and how data monetization affects content curation: “This issue is a really important one.” Wicker asked if studies are underway. Wilson said nothing has been announced.

The FTC would support a federal price-gouging statute, Simons told Cantwell. Slaughter suggested clear definitions to bring cases, and Chopra said no federal law should preempt state laws. He suggested criminal penalties for certain price gougers.

Cantwell agreed content curation is a problem, and is undermining the newspaper industry. Big Tech controls the entry point and is limiting the options of newspaper companies, she said.

Citing the recent House hearing with Big Tech CEOs (see 2008030057), Sen. Amy Klobuchar, D-Minn., asked Simons if the agency should explore past acquisitions. Simons declined to discuss specifics about investigations, saying there’s litigation. The commission “dearly” needs resources for antitrust probes, Simons said, noting the agency was twice the size in the 1980s.

Wicker, Moran, Senate Majority Whip John Thune, R-S.D., and Sen. Marsha Blackburn, R-Tenn., raised concerns about the invalidation of the Privacy Shield (see 2007240031, asking how the agency plans to enforce obligations. Companies just need to follow whatever promises they made as part of the PS, Simons said. They can say they’re no longer certified under the agreement, which will free them of their obligations, but the agency will uphold enforcement against unmet promises, Simons said. It’s unfair for the EU to hold the U.S. to a standard that other EU members aren’t meeting, Phillips told Blackburn, noting the agency will do whatever it can to ensure companies can continue transferring data securely.

The FTC and the Commerce Department should work with their European counterparts to create interim PS guidance to “protect consumers and help businesses,” Wicker and Cantwell wrote Wednesday in a letter with House Commerce Committee Chairman Frank Pallone, D-N.J., and ranking member Greg Walden, R-Ore. “Thousands of American businesses that rely on Privacy Shield are left with few options for the processing of data from the EU,” they wrote, saying it's “critical” to avoid unnecessary disruption to businesses.

Blumenthal asked Simons if the FTC would depose Facebook CEO Mark Zuckerberg in the current antitrust case. Simons declined to offer specifics. He said sometimes it’s important to depose executives, and sometimes it’s not necessary.

Thune discussed his Platform Accountability and Consumer Transparency Act (see 2007280053), introduced with Sen. Brian Schatz, D-Hawaii. He asked Simons how consumers would benefit if civil enforcement from federal agencies were allowed, as written in the bill. It’s fairly common for the FTC to battle Section 230 defenses in court, so it would be very helpful to avoid that and allow the agency to go after platform participants and platforms, Simons responded.