Transcripts For CSPAN2 The Communicators 20160726 : vimarsan

Laws so enforcing the antitrust laws. We look carefully at making sure the way consumers interact with the marketplace, that is one of the key focuses of the agency, and then we are also trying to insure there is vigorous competition out in the marketplace. Host how does that intersect with the communication . Guest we tackle how consumers are interacting with technology, all of the innovation we are seeing today, and also how technology has entered consumers daily lives. As an agency, we need to make sure we stay on top of Technological Developments and we understand how consumers are engaging with the marketplace. Host and what is the interface with the federal Communications Commission . Guest there is some overlap. One of the areas we have overlapped on has to do with enforcement of the nocall rule in the area of telemarketing so there has been a great deal of collaboration in that area. In issues that relate to private Data Security that is another overlap particularly in light of the federal Communication Commission to reclassify broad broadband. We work well with them as we do with a number of other federal agencies. We share information with the department of justice and because of the broad jurisdiction that the federal trade commission has where we intersect with federal agencies. Host we will talk about some of those issues i would like to start by asking what is the commissions role in protecting American Consumers privacy . Guest we have a vital role. The way we go about protecting consum consumers is we insure companies dont engage in unfair or deceptive practices. We have developed important jurisprudence in that area. Today, and over many the course of years, companies have made promises with regard of their data access, and it is up to us to make sure companies actually fulfill the promises they are making. Just to give you one example, you may be familiar with the poplar mobile app known as snapchat . We brought a case against snapchat a couple years ago because they had made a promise their socalled snaps, they are pictures or messenings, that they would disappear forever. Messages. In fact we look into that and learned that those snapchats were not in fact disappeadisapp forever and we brought action because they made a promise they were not fulfilling. That is just one example we have brought action about companies that make particular promises about using Consumer Information and that their data complies with those. For example, we insure that companies provide reasonable security measures to protect Consumer Information. I think one of the Biggest Challenges that we face today is the protection of data. As we know, we are seeing massive collection of data through all of the innovation we see. The fact that the cost of storing data has plummeted and the fact that companies now have very significant analytic power to use and find initial uses of data being accumulated and that comes with certain risks so at the same time we see innovation and we can offer substantial benefits to consumers whether it is in the area of health or have breakthroughs because of the ability to collect information today and analyze it. You can see other potential industrial uses that just have powerful gains in efficiency at the same time that nasas collection and storage of data also creates risks and one of things we have paid close attention to is analyzing whau those risks are and if we think it is a risk that falls within our authority appropriate action and providing recommendations to companies about how they can deal with those risks. Do you think most americans understand the amount of data that is collected and the nature of the natea that is collected about them. Guest i dont. So much of the Data Collection that takes place happens behind a curtain. The data is being collected and they understand. But it is i dont think they understand necessarily the extent of the data that is being collected or the fact hat a company may decide to share that information with third parties. I think that changes the equation dramatically. Just by way of example, i think a consumer will understand if they are wearing a particular fitness device on their risk the company is gathering their Health Information and other related data to provide very useful information. But they may not necessarily understand that this company may be sharing that information with a third party and then perhaps down the line what if what happened is that information is then being used to make determinations about what insurance i get and what if that information is going to be used for other determinations. Maybe that is information a crediter or employer might want. If i have a smart refrigerator there might be revealing the propensity to grab the ice cream snack at night and what impact would that have . Those decisions can impact areas where companies are making very important choices and decisions about consumers and we need to be very careful about how that process unfolds. Host currently is a company that sells a wearable fitness device do they have the right to provide that information to third parties . Do we have the right to opt out of that . Guest right now there is no federal legislation in the area that tackles these issues comprehensively. We have certain legislation we enforce. We have the fair credit reporting act for instance we enforce which in certain areas does provide protections to consumers and also has provisions that allows consumers to insure there is accurate information. So if there is an adverse decision being made on the bases of a Consumer Report the consumer is entitled to learn about that and is entitled to seek to make any collections if the information that is contained in that Consumer Report is inaccurate. We are making sure that companies who had not seen themselves as a Consumer Reporting organization and didnt feel they fell within that that they are now imp liicating this and we will make sure companies are aware of their obligations and consumers get the associated protections that come with that. At the same time, a company sharing, there is no prohibition against sharing with third parties. What we do is, if the company is making promises about that, we would seek to enforce that but that is happening. Let me elaborate on that. A couple years ago we issued a report on the data broker industry. This industry that many consumers dont know exists but companies that are in the business of dealing in Consumer Information. These companies are getting information from Online Sources and offline sources and purchasing data from companies that are collecting it. They are compiling that information and they have files on virtually every American Consumer and many consumers worldwide. They are then combining that information and placing labels on us. Sometimes it is based on like if you are an enthusiastic in hiking but sometimes the labels have to do with your socioeconomic status. In my mind it is important. They are there to be more tra e transparency about the data being collected and how it is being used and we at the agency feel it is important consumers have more control over how information is being used. Let me also highlight that thisida thisidathis data we see today, there was a study that indicated that 91 of those surveyed felt they had lost control over how their information was being collected and how that information was being used. To me that is not a good sign. It is not a good sign for the marketplace that you see consumers not happy and having confidence that is marketplace is going to be adequately and safeguarding their information. I think it is important for these issues to be addressed because i think consumers should be able to take advantage of these Great Services available through the American Companies and inventors. I think that is one Important Role we see ourselves playing. You mentioned some of the dangers that exist in this widespread Data Collection. Why dont we have a comprehensive law that would protect consumers . Guest there have been some Bills Congress has considered but they have not moved forward with anything. The majority of the commission have recommended that Congress Enact legislation in this area. I personal feel that it is questionably important for there to be just some basic safeguards for consumers that encompass the need for security and control. Insecurity is another area. Sadly we dont have federal based security laws. So to me that is something that we absolutely need to confront. I can tell you that the issue of securing personal information is just incredibly important. I think that is another very significant concern. The ntia recently issued just about a survey indicating that 84 of households that use the internet have concerns about privacy and security. The top concerns are Identity Theft and credit and bank fraud. That is very much in line with what we see. We have a database that we fwath gather complaints from consumers and Identity Theft is one of the top complaints year after year. That is an issue that affects millions of americans and the latest statistics from 204 are nearly 18 Million Consumers are victims of Identity Theft. So the more data being accumulated this is something that is just increasing. It is only going to increase more. These are issues we need to confront and in my mind it is important for there to be legislation in this area because to my mind given theitate t the data i see, it is clear companies are not to what they need to do and we need to take action. Even if we dont see new legislation from congress, is the commission doing enough to end hacking . To protect consumers from da databreaches from hacking . Guest it is a solution one agency wont address. You need industry to be engaged, you need other legislative efforts because it a complex problem. What i can tell you is that i have been focusing on enforcement and talk about enforcement but we want at a mock sure Companies Understand what their obligations are and how to go about providing appropriate security. We certainly understand that small and Medium Sized Companies may feel overwhelmed and underresour underresourced to tackle these issues. We have put out guidance in this area in the last year. We have also held events around the country where we brought together experts who can talk in a very concrete way about the approaches they used to tackle some of these challenges. We are doing what we can to make sure companies become more aware of what they can do to provide appropriate security. But i think it is a complicated issue but in my mind certainly one thing that is necessary is some form of legislation but also educate. Making sure that companies can adequately have to tools to deal with the issue. Host just to follow up a little bit. Does the ftc have enough enforcement tools if you are seeing flagrant violations of security . Guest i think the Data Security legislation one thing i think would be beneficial would be to sieve the agency Civil Penalty Authority in this area because a main authority we can establish there has been actual harm to a consumer who can seek to get consumer redress. In the absence of that we can have to rely on relief which means a company gets an injunction that would require them to have appropriate security Going Forward and if they violated the order Going Forward there would be a penalty that could attach. In the first instance, it is conceivable if we dont have specific details about actual harm that has taken place we wouldnt have any other form of relief other than an injunction and that may not be enough of a deterrent. I think it would be useful to have Civil Penalty Authority and with various criteria we would evaluate. Host chairwoman, do you agree with the 91 of americans who feel like their information is out of their control . Gues guest i feel companies are not doing what they should and not offering consumers appropriate choices in a way that makes it easy for consumers to be able to take positions on what happens with their data. Many companies rely on long privacy policies that are filled with legals that are hard to understand and opaque. We arga Companies Use simpler language and particularly when people rely on mobile devices that they shift to something that is what we call just in time notice meaning that lets say i downloaded a particular app and that app wants to access my location which is what we consider to be sensitive location, where i am going day in and day out, that i be provided notice the app seeks to access that information and gives me a choice so i have the ability to say no, i dont want this app to access that information. Those kinds of choices, i think a are needed and i dont think companies, generally speaking, are providing appropriate control for consumers. I will say, we have certainly seen Companies Make progress in this area. And i am pleased about that. But i think a lot more work meads to be done to make sure consumers really understand what is happening with their information and better appropriate choices are provided the them. We talked to Technology Companies in silicone valley about privacy what is the issue or concern they bring to you the most or you hear the most . Guest i think the general concern is, you know, concern about placing costs on them that would inhibit their ability to be as innovative as possible. My answer back is i think Consumer Protection innovation can go hand and hand. If consumers are not confidant in, lets say, a particular device collecting information they will not purchase that device. I think it is important for consumers in order to avail themselves and be terrific products out there it is important for them to make sure that information is secure. Let me also point out that another issue that comes up is the more we use devices, wearable devices and other devices in our homes, not only had they collecting a ton more Additional Information from what used to be private spaces; our homes. Now you have these devices collecting all sorts of information but in addition to that in means in terms of security the risk of exposure of vulnerability increases because of the number of devices. We recently brought Data Security action involving a company that made routers and routers, this particular company, ases, said its router had vulnerabilities and as a result of that, and there were vulnerabilities in their cloudbased storage, it exposes your entire home network. So again, this is just going to show that at the same time we see all of these wonderful devices that provide added convenience and have the potential to collect information that can be used for really significant breakthroughs. It can be beneficial to society and consumers. We have to be cognizent of the risks. Host you refer to the snapchat and the asus Data Security cases. Has those been resolved . What is the next step . What does it mean to take action . Guest we tend to resolve most of our cases through settlement but we will go to trial if need be. I will say that most of our cases, particularly in the area of the privacy arena, and Data Securitying, we are in the process of litigating the windham action but it settled. Host asus and snapchat have been settled . Guest they are under an order that requires them not to make any misleading promises. One criticism i have heard about the ftc approach and snapchat is a good example. So the policy of snapchat was found to be deceptive. And i am wondering does that mean snapchat is changing its actual policies or just what it lists as its Privacy Policy . Guest we are not here to tell a company what do to or newt do. But snapchat was trying to differentiate themselves based on what they said were proprivacy related features and if you are doing that you need to actually comply with that and make sure that is the case and it wasnt the case with snapchat. In my mind, it is very clear, i think with looking at the information and data have, consumers care about privacy, maybe not everyone but i think there are Different Levels in terms of how much consumers privacy they want and will seek. But it is an issue on which a company can differentiate itself. Speaking also as being part of a competition agency, we want to see more and encourage more competition in the area of privacy. But of course if you are touting a feature you have to make sure your device actually does it. Earlier this year the fcc proposed new rules that would limit the data that broadband providers can collect on their consumers and i want to know what the ftcs stance is on that proposal . Guest pleased to see that the fcc is insuring companies under their jurisdiction provide appropriate privacy. The ftc did submit comments and made suggestions about how we thought they could make changes that would make their proposed rules even better and in certain respects we felt the rules were not as strict and in other ways we thought the rules could be more loose and under the framework we used they could change their rule. Ultimately the general approach we feel should apply, particularly this relates to choice mechanisms, we feel that information that is sensitive and that includes health, financial information, or content of communication that we feel is something where people if they want to share that they ought to opt in rather than to simply be they required to opt out. In our mind, those are Sensitive Information that people of a general matter would not expect to be used, lets say shared with, a thirty party. In our view, that is where you would want a system where someone makes the selection, yes, you can share that information with a third party. Absent that consent it should not be permitted. But aside from that, General Information that might lead a company to advertise to me about the kind of Running Shoes i might like or nonsensitive, noncontent related in that circumstances we think it could be appropriate for consumers not to share that an optout could be protective. We made a few other suggestions about how to deal with security issues. But generally, i think the approach that they took is something we are in line with and by that i mean they focus on the importance of transparency and providing choice to consumers and also focus on the importance of security. Host we have one minute left and time for one more quick question. Where do you see the election going in terms of the ftc . Host lets leave it there. What are some of the issues the next ftc will be facing . And has it been debilitating to only have three members rather than your full five. Guest let me start with the latter question. It is always better to have a full set of five commissioners. But at the same time we are working, we have a great group of colleagues and we are working well and i think we will continue doing all of the great work the agency has been doing. As far as the election goes, it has been an Unusual Campaign so far. I am not going to make any predictions. What i will say is the work we do, you know, there really is bipartisan consensus. Our own commission is comprised of a bipartisan grup of commissioners. The issues we talk about will continue to confront the agency and i think you will see more in line of what you have been seeing. An agency that works well and is very effectively protecting its consumers and promoting security. Host a graduate of Harvard Law School and chair of the federal trade commission. And covering tech policy of buzz feed and native of Fort Lauderdale and graduate of uve. Thank you both. Washington journal is live from the Democratic National convention in philadelphia. Coming up tuesday morning, after the first day at the Democratic National convention morning call washington correspondent laura bash will cover. And then we talk about the role in the historic supreme court