Congress moves to give $1B to FTC to fund new bureau to protect privacy in tech platform era

Four people sitting at tables speaking into microphones. An illustrated depiction of a congressional meeting.

The Federal Trade Commission is closer to establishing a new bureau dedicated to protecting privacy in today’s data economy.

A proposal passed by a House committee yesterday would allocate $1 billion to the FTC to staff a new bureau addressing unfair or deceptive practices related to privacy, data security, identity theft and other data abuses. The proposal, part of a reconciliation package of amendments from Democrats to President Joe Biden’s massive jobs and economic recovery plan, came from Rep. Jan Schakowsky, an Illinois Democrat who heads the House Consumer Protection Subcommittee.

“Large tech companies like Facebook have gotten away for years with nothing more than a slap on the wrist for their deceptive practices,” said Schakowsky during a House Energy and Commerce Committee markup session held Tuesday to amend the Build Back Better Act. “With these resources, the FTC will invest and hold companies accountable for failing consumers.” The legislation was moved to the House Budget Committee and still needs approval by the full House of Representatives to go into effect next year.

As data collection and use fuels corporate power, people both inside the FTC and outside who hope to influence it have pushed for a more holistic approach to addressing problematic data practices — one that takes into consideration the increasingly important role of data as a revenue driver for companies. That means finding ways for the century-old FTC, which oversees both consumer protection and competition issues, to evolve to meet the realities of the way companies operate today.   

“The FTC needs to create a new bureau,” said Jessica Rich, the former head of the FTC’s Consumer Protection Bureau, in a July interview with Digiday. “This bureau would address not just privacy, but broader data protection concerns like anti-competitive data practices and the use of data for fraud, racial profiling and discrimination,” she said. Rich, now part of the privacy and advertising group at law firm Kelley, Drye and Warren, spent 26 years at the FTC and directed the agency’s Consumer Protection Bureau starting in 2013. The bureau that Rep. Schakowsky has proposed appears to be along the lines of what Rich recommends. 

In addition to hiring more staff with technical expertise, Rich said people from the FTC’s existing Competition and Economics Bureaus and its Privacy Division (part of the Consumer Protection Bureau), as well as international staff and technologists, could move into the new bureau to form its foundation. The FTC’s chief technologist Erie Meyer said in July at the agency’s PrivacyCon event that she and her team were in hiring mode already, hoping to bring on board privacy engineers, designers, financial analysts, product managers and technologists. 

“The FTC does not have the financial resources and the funds to fulfill the critical responsibilities the American people certainly need, and nowhere is the lack of resources more glaring than in its effort to protect consumer privacy and data security,” said Schakowsky.

Republicans pushed back on giving the FTC what they considered too much money without more specific direction from Congress on how it would be spent. Florida Republican Rep. Gus Bilarikis was among those who opposed the amendment. He and other Republicans pushed for the FTC funding to be guided through the establishment of a would-be federal privacy law. Without that, he said, the FTC funding “could become nothing more than a socialist slush fund.”

While a lot of attention is given to the FTC’s investigations of Facebook and Amazon in relation to antitrust and competition issues, privacy has been top-of-mind this week. The possibility of the new bureau at the agency comes on the heels of the nomination Monday of privacy hawk Alvaro Bedoya as a commissioner. Bedoya, a champion of privacy rights for people of color, immigrants, and working people, is a former chief counsel of the U.S. Senate Judiciary Subcommittee on Privacy, Technology and the Law. Most recently, he helped establish the Center on Privacy and Technology at Georgetown Law, where he co-authored the center’s influential research on facial recognition use by U.S. law enforcement. If approved, Bedoya will fill the seat of Rohit Chopra, who has been named to head the Consumer Financial Protection Bureau.

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