New FTC Chair Has Warned Against Stricter Privacy Rules

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President Donald Trump has named Republican Maureen Ohlhausen, a Republican who has opposed net neutrality and neutrality and warned against government regulations intended to prevent discriminatory data practices, as acting chairman of the Federal Trade Commission. The move comes on the heels of the nomination of pro-competition Republican Ajit Pai to head the Federal Communications Commission, which now oversees privacy issues related to Internet Service Providers.

Credit: FTC

Ms. Ohlhausen, who was named to the FTC in 2012 by then-President Barack Obama, can be expected to take a pro-business approach aimed at reducing regulatory red tape that she and others argue stifles competition and could limit the benefits of data use.

As Data Privacy Day this Saturday approaches, the moves, though not unexpected, come as disheartening news for privacy advocates who have crusaded for stronger regulations protecting consumer data privacy. Industry entities – from advertiser trade organizations to tech firms vying to cash in on the ad industry's hunger for identifiable consumer data -- however, can be expected to praise the new leadership selections as signs that government barriers to controversial data collection and sharing practices will fall, or simply not be erected at all.

"We are very pleased with this appointment," the Association of National Advertisers wrote in a statement send to Ad Age today. "Acting Chairman Ohlhausen has consistently supported and praised industry's efforts to develop an effective privacy self-regulation effort through the Digital Advertising Alliance (DAA). ANA has found Acting Chairman Ohlhausen and her office highly and effectively focused on the major developing issues in the digital marketplace, and we very much look forward to working with her in her new leadership position at the FTC."

In addition, the trade association praised the choice of Mr. Pai to lead the FCC, suggesting in a blog post that it is likely he will reconsider the recent FCC rules requiring ISPs to obtain opt-in consent from consumers before using and sharing data including geographic locations, browsing history and app-usage information. The trade group also made a point of congratulating President Trump on his inauguration.

Recently, Ms. Ohlhausen signaled that industry self-regulation is suitable for protecting consumers against potential privacy infringements associated with cross-device tracking. In a concurring statement referencing the FTC's Cross-Device Tracking report, she alluded to the agency's 2009 report on behavioral advertising, noting:

The Behavioral Advertising Report noted that consumers might be surprised if their activity on one website informed advertisements on a different website. Likewise, today's report notes that consumers might be surprised if their activity on one device informed advertising on another device. As such, today's report does not alter the FTC's longstanding privacy principles but simply discusses their application in the context of a new technology.

The FTC essentially has supported the ad industry's self-regulatory programs led by the Digital Advertising Alliance and the Network Advertising Initiative, most notably the DAA's Ad Choices program which notifies people when ads have been targeted based on previous web interactions and allows them to opt-out from receiving such ads. Though it was subtle, Ms. Ohlhausen's comments regarding behavioral advertising's similarities to cross-device tracking could be perceived as an indication that she will not push for additional regulations restricting data use related to cross-device tracking.

She has also warned against additional rules curbing data practices that could result in discrimination against people when it comes to obtaining jobs, loans or fair credit rates. In a statement responding to the FTC's January 2016 report, "Big Data: A Tool for Inclusion or Exclusion?" Ms. Ohlhausen wrote, "Concerns about the effects of inaccurate data are certainly legitimate, but policymakers must evaluate such concerns in the larger context of the market and economic forces companies face…. If we give undue credence to hypothetical harms, we risk distracting ourselves from genuine harms and discouraging the development of the very tools that promise new benefits to low income, disadvantaged, and vulnerable individuals."

The new FTC Chairman, who replaces former Chairman Edith Ramirez, also has vocally opposed the concept of net neutrality, arguing in a recent paper that "In the end, the FCC's Open Internet Order is likely to harm consumers by replacing competition with unneeded government regulation."