tv The Communicators Noah Phillips FTC CSPAN November 16, 2018 10:42pm-11:14pm EST
midterm elections. georgetownge from university on c-span. on our free radio app. where history unholds daily. 1979, c-span was created as a public service by america's cable television companies. today, we continue to bring you unfiltered coverage of house, thehe white supreme court, and public policy events in washington, d.c. and the country. c-span is brought to you by your cable or satellite provider. >> we want to introduce you to, noah phillips. three republican commissioners on the federal trade commission. he's our guest this week on the communicators. commissioner phillips, this is the first time in a long time that the f.t.c. has been fully
commissioned, isn't it? >> it's the first time in over 100 years. happen?id that the early.c. began in 20th century, 1915. our statute was passed. get fiveime, it had to new commissioners. the way the f.t.c. was designed was to give the commissioners staggered terms of seven years. while multiple commissioners often come in at the same time, again, the scheme is such that you don't have a whole new group time.ple all at one but that's what happened this time. so here we are, over 100 years later. the the first time since founding of the agency that we have five new commissioners coming in at the same time. >> and you just began your seven-year term in may. >> yes, sir. >> what now is the role of the federal trade commission when it comes to internet regulation? >> thanks for the question,
peter. the federal trade commission has really important missions. the first is to protect competition. our anti-trust laws. the second is to protect consumers. variety ofa statutes. but critically, the f.t.c. act, which for purposes of consumer protection, bars unfair and deceptive acts and practices in commerce. standard.flexible it's broad wording in the statute. and it has been applied over decades to a variety of different technologies and that can include the internet. >> and this has changed over the last year, hasn't it, the responsibilities of the f.t.c.? >> on some level, yes. >> in what way? you may know, under the obama administration, the federal communications commission, the fcc, classified certain internet service common carriers and subjected them to a series of
we sort of that colloquially call net neutrally. the way the f.t.c. is is the f-- so that authority-- we don't have over common carriers. so when someone has designated a we losearrier, jurisdiction. and there was jurisdiction that we had. under the new chairman of the commission,e chairman pai and his colleagues, fcc undid that net order, through something called restoring internet freedom order. the f.t.c.id was put back in control with the jurisdiction it had a few years before. that means as a practical matter is that, with respect to deception, we have the authority that we had before. in that spacers are violating the law, we can go after them.
>> well, joining us in our with commissioner coverss is john, who technology for politico. >> thank you. me.hank you for having >> peter, i should have said before, it's a real honor to be here on c-span. want to touchng i on is also data privacy. we're going into a new congress right now. had the midterm elections. there's been a lot of debate about what a new potential privacy law should look like. lawmakers from both parties kind indicating this is something they want. youhave indicated that don't necessarily think the midterms would sway it one way or another. necessarily based on political party. but there has been some differences in terms of what have pushed with. they've pushed for more powers really f.t.c., notably kind of focusing on rule making authority and what that would like. thune has indicated that some republicans are maybe not as
the idea of that, but still open to talking. the powers do you think f.t.c. should have or could have as congress looks at figuring out what the right balance is? >> john, thank you. let me say the following. prospect of broader privacy statestion in the united raises a really interesting series of questions. them, a lotd with of really important value judgments. and i expect that the administration is, and congress of theseweighing a lot really important things. that's the first step in the for us, through our democratic processes, to look at first determine, you know, what are the problems that we're trying to solve? privacy,e talk about sometimes we talk about empowering consumers. control over data about them. sometimes we talk about data
breach, right? that data that concerns shared -- shared is the wrong word. might be stolen. at that that might put you risk. those are related issues. but they're not the same. i expect, will, be doing a lot of really important consideration of what problems are that we are trying to solve and then what are the best tools to solve them. and then importantly, with congress, right, to what extent get a sufficient level of consensus to arrive at kind of a national solution? should thens about, f.t.c. be given more authority senset have you, are in a secondary. they're secondary to those important value judgments that congress needs to make. >> and what sort of value judgments would you say are kind foremost onesnd that congress might want to look at when it comes to crafting this? pushed forow they've doing it in a pretty short amount of time.
has indicated who an interest in chairing the senate commerce committee, he the booksnts it along by the end of 2019, which is tricky. pointing tokind of some of the key value judgments that you'd look at, what would you initially kind of say and in terms of the powers of the f.t.c., are there any that you would grant? it'sw you mentioned secondary. but in terms of rule making or authority,il penalty things like that, are the things you personally would think that congress would want to do? is that too early to say, given the value question? >> again, i think the value to come is what has first. and you have to decide as with any regulation what are the market failures that we've identified and what the best and most efficient ways to address those market failures? said publicly,e that i hope remains part of this is that kind of taking off my consumer protection hat
competitionon my hat, we need to keep in mind the importance of competition. you want -- you always want to protect consumers 6789 but you mind the to keep in fact that sometimes regulatory schemes can have a negative impact on competition. can entrench incumbents. that may be worth it, right? it may be that the problem is such that we're willing to take a little competition out of the market. but it's something we have to mind.n >> i know that the chairman has talked about that as well. do you think that's happening in europe right now with the privacy rules they've within grappling -- been grappling with? extent is that an issue right now, with the approach they've taken there? put it this way. that's a concern i have articulated. there were early reports about impact on ad tech. after g.d.p. came out, which is you're referring to, there was a study that i saw last week
on venturempact capital investment in the tech space in europe versus the united states. what ultimately results, i don't yet know. but competition is always something you need to keep in at awhen you're looking regulatory scheme. >> so commissioner phillips, current privacy law in the united states, and how gdpr incompare to the europe? >> so i have to start my answer by volunteering that i am not gonna speak that much with europe.to what i'll say for the united states is the following. risk-based privacy scheme in this country that we have developed over really half a century. it includes a variety of different laws. of robust privacy law per se that we think about would be the fair credit reporter act, which has been on
century. for half a had the consumer protection authority that i've described, and we have used that privacy related matters. there are also a bunch of other that target particular areas of risk where congress has determined that we need a law, protecting children, the children's online privacy or hipaa. act, everyone is familiar with hipaa, because you have to fill out when you go to the doctor. what we have a scheme that says protect children or we want to protect information particular. in or financial information. so what we have now is sort of a risk-based system. europe, the g.d.p. r. is a kind of broader look. not as focused on specific areas of risk.
thinkhat reflects is, i to some extent, a different lens through which europeans have issue of consumer privacy. so in the united states, going the founding of the republic, privacy has always been a really important value to us. fourth amendment right, protects an individual against the unreasonable from searches and seizures. and you see laws built around fourth amendment, sort of the values more to that it embeds, developing over the history of the republic. amendment fourth jurisprudence, in a case called carpenter, a development over the law to protect privacy. but historically in the united states, we thought about consumer privacy more as a issue.r protection less as a matter of a
constitutional right. europe, they think of consumer privacy, in individuals' relationships, vis-a-vis the firms with which it does business or what have fundamental a right. prescriptions to deal with privacy issues have sort of started there, whereas traditionally have looked to risk, to harm, and we've built a statutory scheme around that. >> and given those different philosophies, in europe and the does the transatlantic privacy shield factor into that, f.t.c.'shas been the role and how has the administration been doing thus itsin terms of fulfilling commitments on that, and is there anything you'd point to that we should be doing more of, lines?g along those because i know you've been in brussels, i believe, in your few short months as a commissioner and have been active on some of this. in terms of the privacy shield, terms ofou think in the significance there?
>> and calling for the f.t.c. to continue to perform its role, and making sure we're all very about our role. and privacy shield has been one most important things that i have tried to do in my tenure thus far. it probablyers, helps to give a little bit of background. form ofe has had some consumer data privacy regulation thequite some time, since mid-90's. haveheir regulations required companies that want to take the data of europeans and offshore to, on some level. on be in compliance of -- some level be in compliance with their regulators and regulatory scheme. number manifested in a of ways. the way it works right now in the united states is that agree to abide by certain principles with respect to the treatment of data. theyith that agreement,
can -- they enable themselves legally to transfer data out of europe to the united states. that agreement into which or to can sign up, we call the privacy shield. and it's been in place for a few years. so the privacy shield process toolves companies appliesing the commerce -- applying to the commerce department, which does a series of quality controls or whatever you want to call them. the company will warrant that they are part of the privacy shield. then we do the enforcement. have a number of ways that we make sure that companies that privacymises about shield live up to their promises. and where they don't, we punish that.or so they're really what i would describe as four pillars to our privacy shield enforcement regime. the first thing is that, as i the commerceore, department does sort of quality control on the intake for the
process. we get referl referrals from the problems. number two, we have priority treatment for any claims coming from the europeans. if the europeans see a problem with a company, we'll take a look at that and we'll take a look at that first. do, werd thing we conduct privacy investigations of our own, under a number of that we discussed earlier. where a company that we're signed up tos privacy shield, we are looking, thethey complying with obligations of privacy shield? use civily, we will investigative demands, our sort of subpoena authority, to spot-check companies, to make sure they're doing what they say they're gonna do. my view is that this is a robust scheme of enforcement. my view also is that the
commerce department is doing a great job building out their capacity on privacy shield, adding things that they do on that quality control. that is received well. >> uh-huh. and, you know, there's obviously stuff, for the last month or two, kind of going toward that. the privacy and civil liberties of sight board has been filled out a little bit. different things that seem to be heartening some of the folks in europe in terms of how the u.s. has approached that. to touch on that. but in terms of anti-trust too, i did want to kind of switch talk about that a little bit. you know, you have spoken a lot the consumer welfare standard and what that really means. givened to touch on that, there have been other folks who put that ontried to the radar of some candidates going into the 2020 election and potentially new ways of looking at anti-trust, you know, potentially to maybe
of the bigup some tech companies. he's said many different things over the last year or two on that. how do you see that debate? and what is the significance of the consumer welfare standard when it comes to anti-trust? >> let me take the questions thinktely, because i they're both big questions. which one do you want me to do first? len hasbly what barry said in terms of moving away from the consumer welfare standard and that debate whether there is any sort of need to look at things differently, or any moverns with trying to that, you know, away from how we have reviewed things. >> sure. there's no question we're having deeper and much louder debate about anti-trust policy inn we have, that i remember my lifetime. the last time i think we did this as a country was really back in the late 70's and early 80's. and it's actually really to go back and look at that time period, about what
folks were saying in terms of we think about things today. we always talk about things like economic malaise. well ineren't going american industry. you had the growth of foreign beginning tore enter the u.s. markets. globalization. and there were a lot of real concerns about the americanveness of industry. part of that problem, which a at thefolks recognized time, right and left -- i mean, everyone from ralph nader to robert bourke -- was that the anti-trust laws were really unclear. had trouble planning around them. and worse than that, they both conduct.efficient they prevented companies that doing things that would help coworkers, shareholders and so forth. and they actually ended up encouraging firms from doing a lot of things that were bad for everybody.
i'll give you an example. to be quite hostile both to horizontal mergers, that among competitors, and vertical mergers, mergers among different companies in the supply chain. are calledat conglomerates, large companies. example.great the nixon administration got in a lot of trouble with trying to meddle in anti-trust enforcement with itt. firms that had subsidiaries that had nothing to do with each other. they were really hard to manage. so american firms were making bad business decisions. time, foreigne firms sometimes supported by help, wereernment stepping up to compete. if you looked at a parking lot in 1978, the year robert bourke looked at aou parking lot today, they would look very different, not just in
cars but also in the brand. right? this is a classic example of this. the rise of japanese automobiles. it has brought a lot more competition to the american market. so we faced a situation in the late 70's and early 80's where people were really concerned about the lack of competition in america. and the lack of clarity in the-trust law, and decisions it was forcing firms tomake or leading firms make, were very much part of that discussion. so a lot of people spent a lot of time. they had a lot of debates, a lot discussion, they did a lot of learning. and they sort of settled on last we have been for the 40 years, which is an economically grounded consumer welfare standard where we look at, you know, how does something itect consumers, less how affects competing firms. >> so commissioner phillips, do
you have concerns about anti-trust and the technology companies and the growth of the big five? know, to me, part of what we see in technology markets in the united states over time reflects really robust forms of competition. things we learned in the period that i was describing earlier, is that a competitive market isn't necessarily expressed in a multiplicity of firms. competitive market can be expressioned in -- expressed in firms that are constantly innovating, even when they are fewer. and as we know, and as the law allows, there are companies that grow to tremendous scale because toy provide tremendous value consumers, often at very low cost. they can be very efficient. they compete -- they can compete others out of the market. said, when you look at
you seest questions and large players in the market, you whatto make sure that they're doing is competitive, that they're not undertaking strategies that are anti-competitive, that violate the law, and that might be adopted sort of to keep of the market in an unfair way. >> well, and earlier this month, in an interview did kind of mention three of the big technology companies, google, amazon and facebook. and he said, quote, you know, i do have a lot of people talking about monopoly when they mention those three in particular and call for that sort of anti-trust scrutiny. those words mean to you? what is the broader discussion surrounding those companies otherwise? especially when the president of the united states is talking about that kind of scrutiny. what does that mean for you as a federal regulator, overseeing some of those issues? anlook, the f.t.c. is independent agency. and we have a tradition of looking at conduct and not
companies. so i'll say again, the fact that our firm is large, under our law, doesn't necessarily make it a bad firm. make its conduct illegal. but there are times when firms, their place in the market, engage in conduct that is illegal. that we's something need to keep track of. >> so commissioner phillips, you're holding a series of privacy hearings in the next couple of months. is there an agenda for any hearings at the f.t.c.? >> actually, anti-trust is a of the hearings we're doing. we are taking a look at a variety of topics. at theaking a look consumer welfare standard in these hearings. ofre looking at the role labor. we're looking at vertical mergers -- >> labor... >> monopoly is a word that you hear. every child grows up trying to
park placelk and together. seller. is one monopsony is one buyer. or facebookle buying up a lot of small tech companies? is that -- >> not in terms of mergers and acquisitions. let me take an example. for which i don't have a really good actual, practical sort a -- let me give you hypothetical, for which i don't have a practical example. let's say there were -- there was a small mill town and you had two mills. and everyone in the town was employed in those mills. they would compete for workers. the mills decided to merge, and it wasn't easy for people to town, or go elsewhere to work, commute, that sort of thing, then it would be one firm buying that labor.
be an instance where we would be concerned about monnopsony where you have less competition on the buying. you sort ofse where have one buyer of a thing. another sort of area where people popularly talked about it, say, 15 years 20 years ago. walmart. walmart is a big buyer of a lot products. it's by no means the only buyer, but because they're so large, get for themselves really good deals. >> okay. ofso monopoony will be part the hearings you'll be holding. what else will be part of the hearings? >> we've thrown kinded of a wide -- kind of a wide net. at artificial intelligence, intellectual
property, we'll look at something we've been calling common ownership. are taking a very broad look at a lot of topical in anti-trust and consumer protection, including privacy. social mediaig firms, one thing that some folks have pointed to in the last year been the concept of bias, whether any of the big social media companies have a say against conservatives, some see other sort of biases. embedded in the algorithms. is that something the f.t.c. would look at when assessing the any other aspects of how these companies operate? very that's been prominent, especially in the house the last year. there's been multiple hearings subject ofs been the questioning. what is the f.t.c.'s role on that, and what do you make of of those allegations of bias? >> so, look, i understand why concerned about biases in general, right? media bias has long been
folks havehat articulated concern about. it may be, right, that there are biases. what i'm also very concerned about is using anti-trust as a tool to address those biases, if they exist. and the reason i worry about all, we have aof first amendment. relatedly,ll, and the judgment whether the content hosts or produces biased is a question that, on requires certain judgments about what information be.e ought to it requires judgments about, what is biased and not biased reporting? and it may require judgments don't see enough of that perspective in the news.
maybe we need more. democracy, with a free press, we need to be very of law about using tools enforcement to address problems like that. f.t.c., ict to the don't know that we have either any particular capability or any mandate to do so. >> commissioner phillips, how valuable do you think the facebook hearings were this on capitol hill? >> i thought they were quite actually. i thought it was a good members to learn about something that they were talking a lot about. it was a good opportunity for a prominent firm to explain more to members. and i think one of the great benefits of congress and congressional oversight of the general,the state in is that it helps highlight issues of interest to the public. i don't know for a fact but i suspect that part of the reason an importantsuch conversation as we are having about privacy is related to
that. >> noah phillips is one of three republican commissioners on the federal trade commission. two democrats as well. commissioner phillips spent toen years as chief counsel u.s. senator john cornyn on the senate judiciary committee. john hendle covers technology for pol politico. for being on the communicators. >> thank you so much. >> thank you. [captions copyright national cable satellite corp. 2018] >> c-span where history unfolds daily. 1979, c-span was created as a public service by america's companies.ision and today, we continue to bring you unfiltered coverage of the white house, the supreme court, and public policy washington d.c. and around the country. c-span is brought to you by your or satellite provider.
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