Regulation of Net Neutrality. So Net Neutrality is an a very hot topic in washington for the past several years. A previous role at the federal trade commission. I was head of the office of thecy planning and head of Internet Access task force. And we looked at this issues in connectivity competition policy that we issued. And some of the issues that that at was whether the antitrust laws which we enforce as well as Consumer Protection could promote some of the values that the Net Neutrality trying to safeguard. So, for example, making sure that consumers get the type of Broadband Service theyve been promised by their providers. Also, that the market remains and that there arent any anticompetitive prohibitions put in place. So that is a question, i think, out. Continues to play how is the best way to safeguard consumer interests here . And one of the things that ive talking about is the importance of making sure that innovation can thrive. Changed models have substantially, even since the internet started, when we go aol garden approach. We want to make sure we maintain flexibility as well as safeguarding consumer interests. That the antitrust laws and Consumer Protection tos have been wellsuited protect both of those values. Innovation in the Business Model interests. Consumer so you do see a role for the ftc in Net Neutrality regulation . The interesting things ive seen is that the d. C. Actually they upheld with the traps transparency requirement. Companies have to say how theyre going to manage these kinds of issues. If they make a promise, if they theyre going to do and they dont adhere to that promise, thats a very straightforward consumer of issue, aind dedeposition issue. So deception issue, so i do think theres an Important Role that the ftc can play. Joining us is a man who covers technology for the washington post. Commissioner, id love to ask questions. But before i do, i want to return to a point that peter 100tht up about the anniversary of the ftc. I understand youre a bit of a of history. Yes. So, you know, the ftc, to my created tong, was kind of prevent monopolies and off anticompetitive behavior. Become soe ftc focused on Consumer Protection issues . Its very interesting, our authorityally only covered unfair methods of competition. But early, early on for the ftc we came into being in 1914. Cases, the early starting in the 20s, you started to see that the commission was expanding the of unfair methods of competition to include things like false advertising. Problem that rose from that was you if you had a waspoly provider and it engaging in false advertising, it was very hard to say what was competition, because there were no other competitors. So eventually the Supreme Court down to reach things like false advertising. In 1938, there were amendments its unfaire ftc and deceptive act. Neutrality for a minute. Is there a distinction to be drawn between the infrastructure of the internet and the Service Layer of the internet, ande Companies Like Google Facebook operate . And should those be regulated differently . Not really is were more of an Enforcement Agency than a regulator. What i look at, its twofold. One, is there an impact on competition . So is there some sort of bottleneck that has been created somethingusing anticompetitive to happen, especially that hurts consumers . The antitrust laws, were not interested so much in the harm to a particular comet for competitor, were interested in harm to all. The consumer side, thats typically where our Consumer Protection Authority Comes in. So if a consumer has been promised one level of service and theyre not getting that, think, an appropriate area for us to look at. But i dont approach it as saying, is there a perfect, you know, regulatory structure for the internet. How the ftceally approaches things. Were looking at, is something competition . Is something making sure is something interfering with the to get theconsumers benefit of the bargain that they entered . Hmm. Do you make of sort of potential for internet providers to use their power to harm consumers . Is that something that you worry about . It certainly is a possibility. And the question is, is it such beossibility that it should or is itd outright, something that sometimes can sometimes can be that on balance, we dont really know until we have the facts in front of us. Thats much more of a reasonable approach under the antitrust laws. So far, i havent seen something that says, well, we know this will always be bad, so that it should be that on balance, we dont really know until we have the facts in front of us. Thats much prohibited, per se. The ftcrlier this week, wrote to the fcc, weighing in on of, you know, the deployment of broadband, andicularly to rural underserved areas. And one of the things that came was, you know, a move broadband as a common carrier under title 2 of act, thatications that could reduce the ftcs broadbandto regulate providers, given that com a do you given sort ofout the ftc losing the authority to regulate broadband providers if chairman wheeler moves to reclassify broadband . Do worry abouti that, and ill tell you why. We do have a common carrier to our authority. And so if an entity is a common carrier, we cant bring actions against them. And one of the things that i that the ftc has been a very active enforcer in the space. Nd so we brought the first online 1999. Y case back in so its almost 20 years later. Weve still been very active in that space. I already talked about the ability under the transparency requirement of the open Internet Order for a broadband provider to be held to its promises to broadbandabout the service its providing. If that Broadband Service is a common Carrier Service under title 2, i think that would seriously call into ability of the ftc to bring those kinds of actions. Concern is really not so much for the ftc but for the loss to consumers, that they out from having the ftc, you know the ftcs oversight, in an area where weve been very effective. Weve brought a lot of cases. We have tried to safeguard consumer interests in broadband, much of a consumers life have moved to the internet. Thismmissioner, is something that the five ftc commissioners have discussed on basis . Ar so we have the sunshine act can only ao we together, under certain rules in place. But its certainly something ive tried to talk about a lot, to raise awareness about in the Net Neutrality debate. Colleagues, of my commissioner wright has testified regarding net well. Lity as i want to go back to brians question about infrastructure. Antitrust do you see Consumer Protection problems with the infrastructure of the internet . So thats a very broad question. Do i see problems with the the internet . Of what i would say is, i would be interested in seeing the is, if there are they areblems and if occurring now or if theyll right is antitrust the tool to address them . Based on the idea that this kind of vertical integration can be inten official to consumers consumers,beneficial to the right approach is on a case basis. Is a problem occurring . We could bring an enforcement action on that. I would be interested in knowing right now i havent seen a lot. I know there are disputes. Companies say we want it to look this way. We dont want fast lanes, we that. Want this or one of the other interesting things that i think is being discussed right now is, what if consumers are asking for that . What tb the consumer is what saying i wantr is to be able to get that kind of Priority Service for certain, gamer or i have a medical application and i want to be sure that my medical information is transmitted at a high priority. Antitrust problem . Is that reflecting consumers consumers desires . So i have a little trouble sort of stepping back and saying, you generally this is good or generally this is bad. I think we have to look at it on thate by case basis, and is the value of antitrust and the value of Consumer Protection. Approach webe the take, on a case by case basis. So some folks who have addressed this question, you know, take the position that antitrust analyses dont necessarily capture all of the could comearms that about as a result of allowing, abuse theirps to gatekeeper position. Wu, the columbia law professor, testified before the House Oversight committee, are a lot of social harms that may not be captured analysis. Trust what do you make of that . Well, certainly antitrust analysis is very focused on consumer welfare, and it looks effects. Ic but quality is also an issue. I think to turn that around a bit is also to say, are types ofes of variety, services that Consumers Want that they will not get provided to them in the marketplace . Think thats the way to look at it, rather than saying, theoretically, there could be a loss of this or that. I think the question is, if thats something Consumers Want, wont they demand that . Wont they ask for that . In thets not there marketplace, doesnt that create an opportunity for a provider to my thats going to be specialty, thats how im going to capture this serve this capture market share, is providing what Consumers Want here, because i think thats important to as well. And kind of going back to this, well, what if Consumers Want prioritiation for Certain Services . Are we denying them the ability to have that offering in the mark place . Commissioner ohlhausen, back and Consumer Protection, a couple of mergers comcast, timest, cable, dres directv, do you some of thoseover issues . Those mergers are before the so itment of justice, dont want to say anything about a pending merger before another antitrust agency. But i will say the ftc has reviewed mergers in the broadband cable space, and there have been previous oversight by the ftc in this area. We would look at a merger on a casebycase basis, so say, is this going to hurt competition . What will be the outcome on prices, availability . Kind of factors. Thats the kind of thing that goes into an antitrust analysis. Recently you wrote to ntia to submit your comments on data and privacy. What did you tell the national andcommunications Information Agency . So i wrote comments in my own views. O its just my but i talked about big data and i talked about big data is the tool. Be used well and it can be used poorly. There are many benefits that can big data. I think there will be great new insight in many areas, but some that are top of mind for me are in health care and, you know, research,s of reaching underserved populations in providing new insights. Our moren some of difficulttosolve problems that we face as a society. Bigare there risks from data as well . I think thats true. Ofhink you can take pieces previously kind of separate pieces of information and assemble them into a profile may give sensitive insights into a consumer. And the question for me is, you all these benefits and you have some risks. What do you do then . And i often talk about my approach to regulation, which id like to call regulatory humility, which is the idea that we understand the technology well. We get a good sense of the benefits, the risk. As a regulator or an enforcer, i educate myself, and then say, okay, what risks are actually likely to happen . Target ourwe approach to address those risks, while not reducing the benefits to consumers . I think thats one of the approaches that is important in data space, isg to say, there are a multitude of benefits. There are some risks. What approach do we take . I talked about focusing particularly on harms, kind of a riskbased approach that says, is there a particular use for that couldf data cause substantial harm to consumers . And thats where we should focus attention and enforcement efforts. Are there enough protections for personal privacy right now . So there are more protections than people might realize. In the u. S. , we dont have an overarching privacy law like they have in europe. Privacy have a directive. We have regulation for health for financial information. We have regulation for communications information. Thathat doesnt fall into bucket comes under the ftc, the ftcs authority. A very activeeen enforcer in the area of privacy and data security. Theres more to be done. One of the things that has certainly been in the news recently is all these data breaches, big company data breaches. Affected. Mers are so the ftc has tried to, through our fairness authority, make it to companies that if you have information about your customers, that the release of could cause substantial harm to them, financial harm, medical information, those types that you need to take reasonable precautions to safeguard that data. Been weve brought more than 507 data 50 cases, pushing those, to remind companies this is a very important thing that you need to do to make sure youre not doing an act or an unfair practice that hurts your consumers. Also beenency has active in going after companies that have been collecting data withoutsumers necessarily their permission or consent. Recently in,ome up you know, cases involving whereok and cupid, theyve performed what they call psychological tests on users necessarily having told explicitly what was going on. Do companies that perform those types of test have an obligation informed consent from consumers . Well, to take the first part of your question first, and then turn to the second, so we have brought Enforcement Actions that areompanies collecting what we consider Sensitive Information about without their consent. We brought a case, and consumers didnt know that the functionality of a flashlight, you know, they thought, well, this is good. A flashlight. They didnt know it was also collecting precise location information. Consider precise location information, financial information, medical information, information about kinds of to be the Sensitive Information for which companies should get express consent before they collect it. Enforcement in that area. Then turning to your question about the testing, we, under our tohority, we would have approach that under unfairness. So the question would be, did it harm tosubstantial consumers that a consumer could not avoid and that is not benefits toy competition or to consumers . So thats the type of analysis and we would have to apply see, was there a substantial harm . And under our the ftcs haverness statement, we said substantial harm is financial, medical, health and safety, things involving children. But that more subjective types of harm, such as emotional harm, be considered test. Ntial under our there are i believe there the ftcplaint at relating to the facebook psychological study. Update onovide an that . Where does that sort of complaint stand . Ftc investigations are nonpublic. So i cant really provide any information. So one of the things that the ftc has gotten public with recently is a Court Decision called Butterfly Labs, which was selling bitcoin, Mining Computers to consumers, the ftc alleges that that Butterfly Labs was not providing those computers on a timely basis. Can you tell me more about that case and what you are alleging in that . Its an interesting case, because of the technology that is involved, right . These Bitcoin Mining machines. So i think thats what makes it interesting. But what makes it routine is the allegations are that they providing the machines to people, who had ordered them. So we looked at their shipping they had taken orders. They had taken money and they had to ship them out. Really the was gravamen of our complaint there, was that the company wasnt the orders. And they werent providing consumers the benefit of the bargain. It. Umers paid for they expected to get it, and they didnt get it. So while it was interesting that Bitcoin Mining, it was really whether they were fulfilling those orders and atther the machines worked all. Maureen ohlhausen, another case thats recently settled was children. Case with 19 million. Purchases, yes. And, first of all, whats the genesis of a case like that . How does that develop . Do you find out about it . So we had a number of cases in this area. Case with apple. We have active litigation with amazon. Now we also settled a case with google. Purchases. Ng inept the way we became aware of this was there was quite a lot of paid to this issue, because parents were starting to complain and say, how did i suddenly have 300 worth of smurf ferries on my account . And so there was a lot of many consumer complaints in this area. It. Ooked into what we alleged in these cases the companies failed to give consumers notice that there in theset purchases childrens games that would result in real money being the account holder. So what we required these in thees to do, settlements, because one is still in active litigation, was onetime notice per device that says, when you enter open assword, it may 15minute billing window subsequent to which all other through without a password, or that in some of these childrens games in particular, it was very unclear what was real money and what was had toney, so that they make it more clear to consumers. The reason i supported isorcement in those areas im very excited about new technology. Im a big believer in it. It myself. Theres a big Movement Towards mobile payments which i think can have terrific benefits to consumers as well as competition. But the basic consumers protections need to go with technologies. One of the basic precepts is that consumers need to know what andre being charged for whats the triggering event for that charge. So that was at the heart of those cases. Okay. 19 million. Where does google cut does check . Cut a does it go to the u. S. Treasury . Do they refund to the parents . Refund to consumers. The ftc does not get the money. Thats the idea, that they need refund to consumers this amount of money. Isnt ultimately given to consumers, we figure out a way to use it to benefit consumers. So 19 million, thats for google probably a drop in the bucket. This any kind of deterrent for future misbehavior . Answer that in two ways. First, our role is to stop the consumers and make those consumers whole, right . So it has to be the redress its a redress, not a punishment, so it has to be keurps on making those whole consumers whole, so the amount would have to be tied to what harm was done. But i dont think you can underestimate the impact of a company being sued. They care about their brand, their reputation. A lawsuit against them that national andw, International Coverage actually, i think, has a deterrent effect top of the amount of money that they may have to pay in consumer redress. And we also put them under order. So they are under an order with the ftc for a number of years so they we monitor to toe sure they are adhering these requirements. Just to follow up on that, technology is changing so days, and many of these orders last for, you know, decades. Should we be thinking about revisiting how long these orders and, you know, particularly given how quickly new technologies come on the market even Business Models change on a, you know, basis . Omonth i think thats a good question. Our orders are typically 20 years long. Is, is that too long . I also think you need to look those orders require . Were not designers. Were not there giving design a company. Ons to were saying its much more of a performance kind of standard. Are you giving consumers appropriate notice before you charge them . Those are the kinds of things an order would require. Are you giving them appropriate notice . You decide how the notice should given. A new Technology May have a whole new way to give that notice. To dictate orng forecast what that might be, but basic, are consumers getting the information they need to make that decision . Violations, oftentimes these privacy violations have arisen because the processaw in the company had for maintaining its information or more training has access to the information. Why do they have access to it . It with . Hey sharing do they have the right protocols in place . Our orders require a process. Are you auditing your privacy protocols annually or every two years . Thing. At kind of Maureen Ohlhausen in this wild, wild west were living in with regard to technology. Ftc, the the department of justice, weve got otherftc and probably inncies who all have a foot the management, regulation and enforcement, et cetera. Are there i mean, how do you what . Out who is doing so it takes a lot of coordination and discussion. Thewhen i used to run office of policy and planning at the ftc, that was a big role that i had actually, was in with other parts of the government, the federal putrnment and the state, to forth a consumers viewpoint. Thisis proposal, regulation, going to make consumers better off . Whether it was from a ampetition standpoint or Consumer Protection standpoint. I think thats the role the ftc plays. An industryspecific regulator. But our authority is to make consumer interests are protected. So i think the important way to do that is to coordinate with agencies as much as possible. Last year i wrote a paper, i gave a speech, wrote a paper about the importance of avoiding whereutional conflict necessary, where it might arise. So i do try to minimize institutional conflict. But there are times when the consumers viewpoint, the approach to the ftc the that the ftc can bring to the table does need to play an Important Role in with otherg agencies. Final question, brian. Back to Net Neutrality, right where we began, many consumers have expressed the opinion that, know, the fcc ought to apply neutrality rules to make sure isps continue to behave well. Does the ftc, how interpret its mandates, so to comes toen it representing consumers . So going back to my original point, that whats in place now is that transparency requirement. The ftc, as long as not reclassified as a title 2 common carrier sure thosen make promises can fulfilled. Im concerned that if that reclassification happens, and the ftc is taken, you know, out that consumers on balance wont be better off. Maureen ohlhausen, republican commissioner of the federal trade commission. Brian fung of the washington post. Thank you. Cspan, created by americas years ago ands 35 brought to you as a Public Service by your local cable or satellite provider. On the next washington
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