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United States Privacy Digest | A view from DC: FTC prepares for commissioner appointments, potential bipartisanship Related reading: A view from DC: White House preps a 'bridge' to AI regulation



The U.S. Federal Trade Commission is one step closer to returning to a full slate of commissioners after nomination hearings took place in the Senate last week. Nominees and senators alike seem eager to return to a condition where bipartisanship will be possible at the FTC, an agency with a long history of collaboration across party lines.

There can be only three commissioners from the same party on the five-person bench. Hence, U.S. President Joe Biden has nominated two Republicans to fill the vacant seats.

Nominees Melissa Holyoak and Andrew Ferguson currently serve as solicitors general for Utah and Virginia, respectively, meaning both bring with them a background of actively enforcing consumer protection and antitrust law at the state level, as well as coordinating with other enforcers on multistate actions.

The Senate Committee on Commerce, Science and Transportation, which has oversight authority over the FTC, held nomination hearings 22 Sept. The committee also questioned Commissioner Rebecca Kelly Slaughter, who Biden renominated to serve a new term upon the expiration of her original term almost exactly a year prior.

Holyoak was the only nominee to mention privacy in her opening remarks. Reflecting on her children, she mentioned how they provide her with "valuable perspective" on the work that the FTC does. She went on to say:

"This Committee and the FTC have worked diligently on issues relating to children's privacy and safety online. Parenting can be tough. Parenting children's online activity is particularly challenging, especially when our kids seem to understand the technology better than we do. We must continually strive to protect our children, especially as we encounter new challenges that can come from technological advancement. I believe the FTC is uniquely positioned to apply its statutory tools faithfully to confront these challenges, stop bad actors, and educate parents on how to protect their children."

Ferguson seems more at home on the antitrust side of the FTC's enforcement authority, though as Virginia's solicitor general he has also been directly involved in ongoing consumer protection matters. His remarks included an effervescent defense of the "free-enterprise system" as "perhaps America's greatest contribution to the world." But he clarified that free markets only work when society "protects the system from monopolies and fraud." He continued:

"That is the FTC's crucial mission — to protect against unfair methods of competition in our markets and to protect consumers from fraud and other deceptive practices. Without vigorous enforcement of our competition and consumer-protection laws, our free-enterprise system would cease to be the miraculous engine for mass flourishing that has transformed the world. It would promote the interests of a select few at the expense of the many."

FTC commissioners serve staggered seven-year terms they inherit from their predecessor. The staggered timeline was originally set in 1915 when the independent agency was first established. Staggering terms ensure there is a steady rollover of expertise with overlaps between commissioners and less of a chance that a single presidential administration can nominate the entire bloc of commissioners.

On paper the expiration of terms extends in an orderly line back to the original years for each office. In practice, the arrivals and departures of commissioners has never tidily mapped onto the seven-year pacing.

One of my favorite government-produced infographics, which is kept up-to-date on the FTC's commissioners webpage, captures just how unpredictable the terms of FTC commissioners have been over the past century. Despite the fact that formally removing a commissioner is quite difficult — as leaders of an independent agency, they can only be removed for cause by the president or under formal impeachment proceedings by the House of Representatives — more often than not they have served for less than seven years.

Sometimes this is because commissioners are confirmed into an office where the term they inherit has less than seven years remaining. Sometimes, it is because a change in administration leads to a change in the commissioner designated as chair of the agency, a title determined by the sitting president.

Making things even more unpredictable, when commissioner terms expire, they may remain in office indefinitely until the president nominates a replacement with Congressional approval, or they depart on their own accord.

As another historical tidbit, it is worth noting that the main Supreme Court case that determined the standard for presidential powers of removal for independent agencies had to do with an FTC commissioner. The Humphrey's Executor case determined that the president can only remove these types of officials for cause, based on charges such as inefficiency, neglect of duty, or malfeasance in office.

When long-serving commissioner William Humphrey refused to resign his office and continued to inadequately support President Franklin D. Roosevelt's New Deal efforts, the president attempted to remove him from power. The case determined that this sort of removal, for only political reasons, was not allowed. To this date no FTC commissioner has ever been removed for cause.

At times, in fact, commissioners not only serve out the allotted first term but are confirmed to serve another term. Some have served as long as 20 years. Commissioner Slaughter seems poised to join this smaller group of twice-confirmed commissioners. In her opening remarks, she highlighted the bipartisan history of the agency:

"One of the best parts about working at the FTC is the opportunity to engage with people who have a wide variety of perspectives and expertise, including the staff, academics, advocates, attorneys, economists, and of course my fellow Commissioners. I believe the work of the Commission is at its best when it is the product of a robust exchange of ideas and viewpoints. So I am particularly glad to be sitting here today with nominees for the two Republican seats on the Commission. I have sorely missed my colleagues, former Commissioners Noah Phillips and Christine Wilson, and look forward to the opportunity to get to know and work with Solicitors General Holyoak and Ferguson. We will not always agree, but I am committed to always engaging with them and seeking out common ground whenever it is available."

You can watch the hearings and read the prepared remarks of the nominees here. Kelley Drye's Jessica Rich, an FTC alum, also posted a detailed analysis, which is worth the read, especially for her summaries of the types of questions that senators posed to the nominees.

As a first signal of bipartisan cooperation, FTC Chair Lina Khan was in the audience during the nomination hearings. In the coming weeks, the Senate will likely confirm all three nominees to take their positions as joint heads of America's top privacy enforcer.

Here's what else I'm thinking about:

  • What does it mean when free speech rights block privacy and kids' safety laws? The U.S. District Court for the Northern District of California issued a preliminary injunction last week, temporarily blocking California's Age-Appropriate Design Code Act from going into effect. If other courts adopt the reasoning in the case, it could have broad implications for future privacy and kids' safety laws in the U.S. To help understand why the First Amendment is such a powerful tool against these types of laws, and what this means for future policymaking, see Anastasia Couch's detailed resource article, which I updated before publication to track the court's surprisingly broad reasoning.
  • Surveillance oversight leads to recommendations for adjustments. The U.S. Privacy and Civil Liberties Oversight Board issued a report with 19 recommendations for reforms to Section 702 of the Foreign Intelligence Surveillance Act, which will expire unless it is reauthorized by Congress before the end of the year. Notably, PCLOB members split along party lines in the decision to release the report, prompting the minority members to issue dissenting statements with their own recommendations appended to the report, as well as a separate press release. Another White House advisory group, the President's Intelligence Advisory Board, released its own report on FISA in July. These included 13 recommendations for reform, but also the firm conclusion that failure to reauthorize Section 702 could be "one of the worst intelligence failures of our time."
  • Dust off those research papers — it's time for PrivacyCon 2024. The U.S. Federal Trade Commission is seeking proposals for research presentations for its next virtual PrivacyCon, due 6 Dec. The call for papers includes insight into the FTC's top research interests, which perhaps track the agency's other priorities. These include AI and "automated systems," health-related surveillance, children's and teens' privacy, deepfakes and voice clones, worker surveillance, and the advertising ecosystem and surveillance advertising.
  • Generative artificial intelligence could leverage personal information for even more effective manipulation. In an op-ed for Wired, the Future of Privacy Forum's Jameson Spivack and Daniel Berrick warn about the convergence of "AI-driven manipulation" and immersive technologies, "creating endless streams of interactive media personalized to be as persuasive, or deceptive, as possible."

Upcoming happenings:

  • 10 Oct., 16:00 ET: IAPP's D.C. KnowledgeNet hosts a conversation with the chief executive of Singapore's Infocomm Media Development Authority (Future of Privacy Forum).

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