Former FTC Officials Provide Their Perspective on the FCC’s Proposed ISP Privacy Rules

Until the Federal Communications Commission issued its Open Internet Order, the Federal Trade Commission acted as the Internet’s privacy enforcer. The FTC brought individualized enforcement actions against companies that clearly placed consumer information at risk.

The FCC has not been content to see whether the courts will uphold its power grab. It has issued proposed rules based on the Open Internet Order. One of these proposed rules limits how Internet Service Providers, or ISPs, can collect and use consumer data.

The practical impact of the proposed rule allows the FCC to exercise jurisdiction over Internet-related privacy violations. The proposed rule places two “privacy cops on the Internet beat.” In other words, the FCC has decided to encroach significantly into the FTC’s privacy enforcement authority.

In a recent article in Fortune, former FTC Chairman Jon Leibowitz and former FTC General Counsel Jonathan Nuechterlein explain the FTC’s traditional jurisdiction and how the FCC’s proposed rule will do nothing to protect privacy while insulating “Big Data… from ISP competition.”

According to the authors,

The FCC should hold ISPs to the same privacy standards to which the FTC successfully held them for many years—and to which the FTC still holds all other companies. We were disappointed, then, when the FCC recently proposed to subject ISPs to a detailed set of burdensome data-privacy rules with no precedent in the FTC’s regime… The rules would further subject all ISPs—and ISPs alone—to unprecedented compliance costs and keep them from efficiently monetizing online data in the same way that Google and Facebook have long done, with astounding consumer benefits. Such restrictions would exert upward pressure on broadband prices and undercut the FCC’s central mission of promoting broadband investment and adoption.

The article is worth the time spent reading, as it operates as a primer for the proposed ISP privacy rule, lays out the traditional enforcement authority of the FTC relating to Internet privacy, and discusses the impact the proposed rule will have on Internet industries.

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