Chairman Muris promises evolution at FTC

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New Federal Trade Commission Chairman Tim Muris is warning he intends to take a skeptical view of Web marketers that significantly alter privacy policies long after consumers sign on. He may also have more bad antitrust news for drug makers, and he is concerned about marketers that pass credit-card numbers to affiliates without customers' knowledge.

"There appears to be a growing opportunity to misuse credit-card info," said Mr. Muris. "There appear to be situations where someone has [a] credit-card number and [the consumer] doesn't really know they have it, and the combination may be leading people to be signing up for services they didn't think they had signed up for."

In an interview last week, Mr. Muris applauded the FTC's role under former Chairman Robert Pitofsky, a Democratic appointee of President Clinton, but said the agency needs to continue to evolve to meet 21st century needs.

President Bush brought back the 51-year-old ex-George Mason University college professor and Republican for his third assignment at the FTC after earlier tours that included heading the advertising practices and competition sections of the agency.

Some of the evolution includes better use of the complaints the FTC gets as the foundation of enforcement agendas and more consumer-education outreach, but Mr. Muris also cited specific changes he wants to make.

Mr. Muris, who in his 1980s tenure sued Orkin Pest Control for unilaterally changing terms of a warranty, said he will look closely at companies that change terms of privacy policies. The FTC in May closed an investigation into's change in privacy policies.

"In the area of privacy, pretexting [posing as someone else to get information] and identity theft, people violating their privacy policies, those are three areas I am very interested in and would make a priority," he said.

At his Senate confirmation hearing in May, Mr. Muris said he was still forming his privacy stance, especially on the Pitofsky FTC's urging of privacy legislation to protect adults. Mr. Muris said last week he hasn't yet formed that stance and is examining a number of privacy issues.

"I'm trying to understand the context of privacy and I'm spending far and away more time on privacy than on any other single issue," he said.

Mr. Muris said one question he is asking is what would happen if the FTC applied its four "fair-information practices," policies that include notice and choice to offline information collection.

He also intends to examine the gathering of offline and online information into consumer profiles.

"Profiling raises some serious questions," he said. "I've asked a lot of questions on profiling. One of the questions I've tried to ask is what are the consequences, what are the harms?"

On the advertising side, Mr. Muris said he would like to pay more attention to fraudulent health claims on the Web, and he also thinks the FTC should target career con artists who jump from scam to scam.

For the moment, Mr. Muris is deferring most comment on congressional pressure for the FTC to go after marketing of violent movies, video games and music to kids. Another FTC report on industry practices is due this fall.

"I don't have firm opinions," he said. "I do think the violence issue is a serious issue. I do think the FTC has a proper role in its investigative function and will continue that. I also think that the First Amendment and the practical issues are serious."

Mr. Muris said he would like the see the FTC remain active in tobacco issues, although he said he has not read various legislative proposals to transfer some FTC oversight of the tobacco industry to the Food and Drug Administration. He also praised the Council of Better Business Bureaus' National Advertising Division as a "flagship" of industry self-regulation.

On the antitrust side, he makes clear that drug makers have a new worry. The FTC, which has already taken on drug makers for deals that delayed the entrance of generic drugs onto the market, is looking at other antitrust violations Mr. Muris declined to detail.

"The commission has been active in the drug area. If anything, we will be more active," he said. "There are some other areas that are related to the drug cases the commission has brought. ... I think it is quite possible the commission will be even more active in that area."

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