FTC Could Drive Edge Regulations

Review of digital age competition policy will keep up pressure
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WASHINGTON The stars look as if they are even more aligned for a government crackdown on dominant edge platforms.

The European Union’s smackdown of Google has helped drive calls from Democrats worried about online privacy for a little less conversation and a little more regulatory and legislative action on this side of the Big Pond.

That push comes as the Federal Trade Commission gears for a months-long hearing fest on how to exercise its enforcement muscle in general — some argue it needs more such clout — including over online privacy, security and neutrality, particularly now that the FTC is overseeing the edge and net neutrality by internet service providers.

Congress has been moving in an edgewise regulatory direction for months, including hearings on election meddling and privacy issues. The Senate Intelligence Committee on Sept. 5 will hold a hearing with executives from Facebook, Twitter, and Google on social-media manipulation.

The FTC hearings will then keep the spotlight on Web issues. One Democratic staffer on Capitol Hill noted that the FTC has some added regulatory muscle to flex if it doesn’t like what it hears in those hearings.

Embeds in Focus

On Aug. 14, watchdog group Campaign for Accountability called for congressional investigations into the use of embedded Facebook and Google staffers by political campaigns to help them influence elections — as in get their candidates elected.

Comments were also coming in thick and fast from both sides as the FTC prepared to launch its fall hearings.

The Content Creators Coalition, which represents musicians including multi-Grammy Award winner Roseanne Cash, told the FTC that its members need government protection from big edge providers they say are abusing their dominant positions on the Web. The Hollywood studios are pushing as well.

In an Aug. 20 technology policy speech, Motion Picture Association of America CEO Charles Rivkin said: “We live in an AI world that is still operating on an AOL policy framework. There was a vision for the internet, and this is not it. It’s time to realign our expectations and the incentives that will help us meet them.”

That included urging the FAANGs (Facebook, Amazon, Apple, Netflix and Google) of the world to act against “a growing list” of online problems such as election meddling, hate speech and piracy. But “assumptions and public policies that shaped the early days of the internet are insufficient,” Rivkin added.

Edge providers won’t let the new regulatory talk turn into action without putting up a fight. “Intervention in data-driven markets without evidence of harm to competition could harm consumers and deter innovation,” the Computer & Communications Industry Association, a trade group that counts Amazon, Facebook and Google among its members, told the FTC, while continuing to identify ISPs as the real problem that needs government minding, including by restoring net neutrality rules.

The CCIA was downplaying the importance of data collection of the power many in Washington argue it gives edge providers. “The accumulation of data alone is not a tool for companies to shut out competitors, and is unlikely to lead to decreased competition,” it argued.

Algorithmic decision-making has been branded as a tool to censor speech or discriminate against speakers, but the CCIA said not to worry. “These technologies will lead to significant benefits for consumers and businesses … creating opportunities in education, finance, healthcare, and employment for low-income and underserved communities.”

In the wake of a record $5 billion fine against Google by the EU’s European Commission, Sen. Richard Blumenthal (D-Conn.) last month called on the Federal Trade Commission to ramp up antitrust oversight of the search giant and “end its decade of inaction.”

As to the data and privacy protection risks that seem to be concerning Democrats and Republicans alike, if oversight hearings and information requests from FAANG are any indication, CCI suggests they are not greater than for any other data-intensive business and simply require businesses to bake in privacy by design. It said the same goes for the bias issues that have been particularly problematic for Republicans.

Politics at Play

There is also a practical political reason for the spotlight to remain on the edge, said a Hill Democratic aide, even in a pro-business Republican Administration.

The aide, who asked to speak not for attribution, said that a get-tough stance on left-leaning Silicon Valley tech firms is a good fundraising tool for Republicans and that won’t change anytime soon. For Democrats, the issue is more nuanced, but they are interested in privacy issues such as the California privacy legislation.

Were more states to adopt their own privacy regulations, the Democrats could become interested in national privacy rules, which edge providers have pushed back on.

With the drumbeat of bots, Russian meddlers and Holocaust deniers online, social media’s current liability protection from user posts could be in jeopardy, the aide said.

And while the FTC is routinely cited for a lack of regulatory muscle — essentially having to regulate by lawsuit and investigation — the Democratic aide pointed out that it has investigative authority it has not used yet in this context.

If it does not like what it hears from edge providers in those hearings, it has the ability to subpoena documents from relevant players, and they can’t say no.

The FTC uses its subpoena power sparingly, so as not to look as if it is conducting fishing expeditions. But it is serious enough about its competition oversight in the new digital, Internet of Things age to be holding the hearings.

If stakeholders looking for tougher oversight of the edge don’t like what they hear in the public hearings, look for them to urge the FTC to use its subpoena power.

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