Watching the Federal Trade Commission’s (FTC) first publicly broadcast meeting in over two decades was a lot like witnessing a runaway train with no intentions of slowing down.
That was by design. New Chair Lina Khan, less than one full month on the job, was unabashed in enacting her agenda. The items on the docket were announced one week prior; deliberations among commissioners were not allowed; 45-day comment periods were not sought. A meeting praised by Democratic commissioners as being an open forum included time for public comments, but only after all the rulings had been made.
Such an approach might cause concern. Seeing Republican Commissioners Noah Joshua Phillips and Christine Wilson motion their Democratic colleagues to take a step back and open the items on the agenda to public comment, only to be overruled in 3-2, party-line votes, raises alarm, regardless of the politics at play.
Out of the meeting, held July 1, came four votes that put the consumer protection agency in stronger position to enact rulemaking and pursue enforcement. The decisions have the potential to reshape the compliance landscape in key areas like antitrust, data protection, and more.
FTC Commissioner Rohit Chopra, expected to soon takeover leadership at the Consumer Financial Protection Bureau, praised the rulings as helping “move past the agency’s era of perceived powerlessness and move on to actually protecting competition and families in this country.” In other words, the pressure is on for companies.
Privacy law on the table
Key among the meeting’s votes were rulings that scrapped self-imposed restrictions on the way the FTC pursues rulemaking and enforcement. A 2015 antitrust policy statement that was approved by a 4-1 vote during the Obama administration was rescinded after it was deemed “shortsighted” and “constrained the agency’s use of its authority to stop anticompetitive business tactics.” Also, the process under which the FTC initiates policy proceedings was streamlined—staff analysis reports are no longer required, and oversight by an administrative law judge has shifted to the agency’s chair.
The old system “reinforced the myth these rulemakings required elaborate and interminable judicial processes instead of straightforward public participation,” said Commissioner Rebecca Kelly Slaughter. She acknowledged the ruling could help the agency “tackle cutting-edge issues like data abuses that underpin so many contemporary business models”—a key development considering Congress’ lack of progress on a federal data privacy law.
Phillips sensed the writing on the wall in sharing his disapproval.
“If we are talking about, say, fashioning a national privacy regulation—a complex policy question with important tradeoffs that has bedeviled Congress for years—I would imagine that the impacted consumers and businesses alike would benefit from more information and the ability to examine whether we have a sound basis for the proposals we are adopting,” he said before his motions to keep the staff reports and independent judge in place were both denied. “Leaving it to a majority of five unelected individuals who no longer have to show their work to the public doesn’t seem like a good idea to me.”
Blast from the past a bad omen?
“This desire to make regulating easier—not better—coupled with public statements from my colleagues over the last few years make very clear the FTC is about to embark on a raft of regulation not seen since the 1970s,” warned Phillips.
That time period was evoked on several occasions by Republican commissioners during the hearing. During that decade, the FTC’s broad interpretation in defining “unfairness” was nearly its downfall—at one point, Congress cut funding for the agency and shut it down.
“There are many at the FTC who lived through the 1970s and 1980s and experienced the public and Congressional backlash during those dark days of the agency’s history,” said Wilson. “There are many others who worked with and learned from those who lived through that period. Current management would be wise to seek their guidance.”
Transparency in question
Seeing how the FTC does business is a step toward accountability. The time for public comment at the end of the meeting, though, was a façade.
No matter what anyone had to say, the decisions had already been made. Regardless, few commenters focused on what transpired—instead, many shared their pleas for the FTC to strengthen enforcement against Big Tech companies. Khan is already expected to do such.
One commenter spoke out against the leadup to the meeting, criticizing the lack of information made available to the public and the short window given to weigh in.
“There were only six days to provide written comments before this meeting,” he said. “This isn’t enough time.”
Transparency is a buzzword for Democratic leadership at the FTC. Their actions regarding public input must reflect this. Otherwise, the train is at risk of running off the tracks.