Consumer Privacy Hearing Focuses on Expanding FTC Resources, Creating Federal Privacy Law

On September 29, 2021, the Senate Committee on Commerce, Science, and Transportation held a hearing entitled “Protecting Consumer Privacy.”  The hearing centered on strengthening consumer privacy rights, including by increasing the FTC’s resources and creating a comprehensive federal privacy law.

To explore these issues, the Committee invited David Vladeck, Professor and Faculty Director of the Center on Privacy and Technology at Georgetown Law and former Director of the FTC Bureau of Consumer Protection; Morgan Reed, President of The App Association; Maureen Ohlhausen, Partner and Section Chair (Antitrust & Competition Law) at Baker Botts and former Acting Chairman of the FTC; and Ashkan Soltani, Independent Researcher and Technologist and former Chief Technologist of the FTC.

In their opening statements, the Chairwoman of the Committee, Sen. Maria Cantwell (D-WA), and Ranking Member Roger Wicker (R-MS) voiced concerns over rising threats to consumers’ privacy rights and the FTC’s ability to prevent consumer data abuses.  Both senators asserted that the FTC lacks the resources to protect consumers from harm.  Chairwoman Cantwell remarked, “Compliance with existing laws, or compliance with new rulemaking, or compliance with the new privacy law will be insufficient if the FTC is not well resourced, technologically sophisticated, and the policeman on the beat of the information age.”

The hearing covered several key topics:

• Expanding the FTC’s resources and penalty authority:  All witnesses advocated for increasing the FTC’s resources and allowing the agency to issue penalties for first-time violations.  Former Director Vladeck and former Chief Technologist Soltani expressed support for funding a new privacy bureau at the FTC.  However, Sens. Deb Fischer (R-NE) and Mike Lee (R-UT) were skeptical of providing such funding.  Fischer stated, “I’m afraid this funding would waste taxpayer money on unsuccessful agency litigation.”
• Creating a federal privacy law: All of the witnesses backed a federal preemptive privacy bill, except former Chief Technologist Soltani.  Soltani asserted that any national standard should allow states to enact stronger privacy protections.
• Allowing individuals to sue for companies’ privacy violations: Senators and witnesses also focused on whether new data privacy legislation should include a private right of action.  Ranking Chairman Wicker warned against a broad private right of action but said he remains open to a narrow one.  Former Acting Chairman Ohlhausen echoed this view, noting that the right should focus on repeated, egregious violations.
• Beginning FTC privacy rulemaking: Finally, senators discussed whether the FTC should exercise privacy rulemaking authority.  Sen. Richard Blumenthal (D-CT) stated the agency should, while Ranking Chairman Wicker said only Congress could create longstanding privacy policy.  In his opening remarks, Wicker stated, “Anything short of congressional action would create significant regulatory uncertainty for businesses and confuse consumers about the scope and durability of their privacy rights.”  Later, Sen. Lee stated he rejected the FTC’s efforts to seek rulemaking power.

Additional information about the hearing and written statements from the witnesses are available here.  We will continue to track developments regarding consumer privacy rights at Inside Privacy.

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