Recent FTC chair signals push for rules on data collection and dark patterns that sidestep Congress

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The Federal Trade Commission’s recent acting chair wants rules curbing manipulative data collection and argues the agency has the power now to set them.

Rebecca Slaughter, an FTC commissioner who served as acting chair of the agency until June 15, said giving people choice and control over their data isn’t working to stop data privacy or market competition abuse. Instead, she said it leads to “notice fatigue” and gives companies reliant on collection of data — the currency enabling market power in the digital marketplace — incentives to employ manipulative approaches such as the use of dark patterns to garner user consent for data tracking and collection. 

“I want to sound a note of caution about approaches that are centered around user control,” said Slaughter speaking yesterday during a conference on data privacy policy held by Centre for Economic Policy Research, a nonprofit group conducting research on issues affecting the European economy.

While she said she thinks transparency and control are important, Slaughter also said, “To put the burden on consumers to work through the markets and the use of data, figure out who has their data, how it’s being used, weigh decisions, I mean, I think you end up with notice fatigue, you end up with decision fatigue, you get very abusive manipulation of dark patterns to push people into decisions, so I would really worry about a framework that is built at all around the idea of control as the central tenet for the way we solve the problem.”

Instead, she said the FTC and other policy makers should make rules to stop businesses from excessive data collection and abuse. “I’ll keep coming back to the notion that I think what instead we need to be focusing on is where is the burden on the firms to limit their collection in the first instance, prohibit their sharing, prohibit their abusive use of data, and I think that that’s where we need to be focused from a policy perspective.”

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‘We don’t have to wait for Congress to act’

The FTC has authority to craft rules to limit data gathering right now, said Slaughter. “We don’t have to wait for Congress to act,” she said. “We do have rule-making powers at the FTC, and we should be using them.”

An FTC commissioner since 2018, Slaughter had served as acting chair of the agency from January through June 15, when a new chair, Lina Khan — a vocal proponent of modernizing antitrust laws — was sworn in to lead the commission. During Slaughter’s time at the helm, she laid the groundwork for using the agency’s existing rule-making powers by establishing a rule-making group within the FTC’s Office of the General Counsel in March. The goal was to enable the commission to “strengthen existing rules and to undertake new rulemakings to prohibit unfair or deceptive practices and unfair methods of competition.”

Establishment of the group reflected Khan’s own arguments made in a lengthy 2020 paper published in the Chicago Law Review called “The Case for ‘Unfair Methods of Competition’ Rulemaking,” which supported the FTC using rulemaking power to supplement antitrust adjudication. Lawyers from Morrison and Foerster in May wrote that, if Khan were to be confirmed a member of the FTC, “Slaughter clearly would have allies in any substantive rulemaking.”

Connecting dots between dark patterns, data collection and antitrust

Also during her time as acting chair, Slaughter oversaw the FTC’s April workshop focused on the use of dark patterns. “We know that in today’s digital marketplace, data is currency,” said Slaughter during her remarks kicking off the event. “And we increasingly see companies using dark patterns to manipulate people into giving up their personal data, which is then sold, aggregated, analyzed and used to target advertising and manipulate future purchases.” Then she connected the dots between abuse of dark patterns in data collection and antitrust. “This conduct can be particularly pernicious when orchestrated by large platforms, who may use data collected through dark patterns to enhance their own market power.” 

Referring to the FTC’s own pending antitrust case against Facebook, Slaughter suggested that in addition to a potential break-up of the company, the agency should consider remedies that address the root causes of data collection abuse. “It all to me comes back to putting guardrails around how data is collected in the first place, stored, shared, used and that will help protect privacy — it will also help protect competition — and that those two things are totally aligned.”

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