September 14, 2018 at 5:00 am ET
“The future depends on what we do in the present,” according to the teachings of Mahatma Gandhi. This wise advice is especially applicable as our government focuses on adapting and planning our future in an era of unprecedented technological change.
This week, to much too little fanfare, the Federal Trade Commission started an important series of hearings on competition and consumer protection in the 21st century. They are hearing from a wide variety of people on how the digital economy affects everything from consumer privacy and Big Data, to antitrust law and whether the digital advances have increased concentration versus competition in the economy. The Commission will also examine the effect of laws and regulation on innovation in the digital economy.
This is especially timely because the Federal Communications Commission’s Restoring Internet Freedom Order issued earlier this year makes it clear that the FTC is now the expert agency charged with protection of consumers in the digital ecosystem. This makes sense – the FTC has had authority for consumer protection in all industries for over a century. The FTC has a track record of this important work in consumer protection, and the hearings present the appropriate opportunity to refine it for the internet economy.
At the outset, it is very important to understand what consumer protection means in the internet ecosystem. In the years before the Restoring Internet Freedom Order was adopted, there was no level playing field in this area. One group of companies (internet service providers) was regulated heavily, while another and increasingly more powerful group (“edge” providers) was not. The irony was that the edge providers collected the lion’s share of consumer data and then, in some cases, either used it for their own financial advantage or allowed third-party applications to use it without consumers’ knowledge or approval.
So when the FTC holds hearings on “Privacy, Big Data, and Competition,” as it will in November at American University or on “Algorithms, Artificial Intelligence, and Predictive Analysis” next week at Howard University, it’s important to not just pay attention but link the significance of this to Facebook CEO’s Mark Zuckerberg testimony to Congress this year about the serious breaches of privacy on the Facebook platform. This is not the last time we will hear of privacy breaches in the edge provider universe, because when the financial model makes the consumer’s data the product, the incentive lies on the side of as much disclosure as possible.
Most consumers have become so accustomed to the ease of researching and shopping online seemingly for “free” that they have little idea of what happens with their data. There is virtually no transparency, and most consumers do not bother to read through the lengthy, small print, multi-page privacy policies, each and every time they visit a website. To make matters worse, it is not always clear how to control the privacy settings on some platforms — or how much is instantly waived by the simple fact of using the site or another site the company owns. As my mother would say, “There really is no free lunch.” Someone, somewhere always picks up the check.
As the Facebook example shows, self-regulation of consumer privacy has not worked. The delay in disclosing privacy breaches, to the detriment of unsuspecting users who did not realize that in some cases their “friends” had unwittingly shared their data, proves the point. After the fact, there is no way to put this genie back into the bottle — the data is gone, forwarded to known and unknown sources whose motives are not always good and likely even predatory. If you need money and you are targeted based on your search or your website views, then the last thing you need is repetitive predatory loan ads. Facebook’s ineffectual effort to have consumers’ data returned to the company merely proves the point that privacy issues are not best left to edge providers who have demonstrated that this is not a priority.
The correct public policy would place all participants in the internet ecosystem on an equal footing, with equal responsibilities. In other words, from the consumer perspective, consumers have a right to one set of privacy expectations no matter where they are on the internet; no matter how they access the internet; and no matter what they choose to search on the internet, from telehealth to e-commerce, to applying for a job, to just looking at a map or whatever.
These hearings have the ability, in the present, to provide strong data and varied insight on the issues upon which the FTC can act to build the right policies on privacy that will spur appropriate action when necessary. Earlier this year, the FTC opened an investigation into Facebook. Now the question becomes what more can be done, proactively, to protect consumers before the next privacy scandal.
Protecting consumer privacy online and consumer data is not a flash in the pan. It will require constant vigilance — by the FTC, by all companies in the internet ecosystem and, of course, by consumers.
Congress, too, can take an important step in the right direction by enacting a law that includes the core principles of an open internet (no blocking or throttling of legitimate online content and no unfair discrimination based on content) and strong consumer privacy protections, along with an explicit conferral of jurisdiction and authority to the FTC in this area as a direct supplement to the jurisdiction it already has in place. The FTC will have a key role to play as the 21st century digital economy evolves — and to ensure that it evolves in a way that is fair to consumers rather than tilting the playing field towards unnecessarily protected big players.
Twenty years into e-commerce, it is past time for everyone to move this important task to the top of our public policy priority list. The future depends on it.
Kim Keenan is the co-chairwoman of the DC-based Internet Innovation Alliance.
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