Competition Laws' Role in Safeguarding Consumers: Net Neutrality and Privacy Debate, Slides of Market economy

Download Competition Laws' Role in Safeguarding Consumers: Net Neutrality and Privacy Debate and more Slides Market economy in PDF only on Docsity! 1 United States of America Federal Trade Commission Free Markets, Regulation, and Legislation: A Place for Everything, and Everything in Its Place Christine S. Wilson∗ Commissioner, U.S. Federal Trade Commission Remarks at the Free State Foundation Twelfth Annual Telecom Policy Conference Washington, DC March 10, 2020 ∗ The views expressed in these remarks are my own and do not necessarily reflect the views of the Federal Trade Commission or any other Commissioner. Many thanks to my Attorney Advisors, Thomas Klotz and Robin Rosen Spector, for assisting in the preparation of these remarks. 2 Good morning. I am delighted to be here for this Twelfth Annual Telecom Policy Conference. The topic of this year’s conference, Broadband Beyond 2020: Competition, Freedom and Privacy, is timely. But of course, the issues of competition, freedom, and privacy are of perennial importance. In October 2019 I gave a talk in Brazil on free enterprise, free markets, and free people. Under President Bolsanaro, Brazil is throwing off its yoke of socialism and moving rapidly toward privatization and deregulation of its economy. This trend has been welcomed by the Brazilian people, and in particular by Brazilian small business owners, who now have the freedom to decide their own hours of operation and to set their own prices for the goods and services they offer. But these developments abroad stand in marked contrast to trends here at home, when 43% of our population professes support for socialism and one of the Democrat front runners for the presidency is a self-avowed Democratic Socialist. In light of these competing trends, the issue of how best to organize our economy is top of mind in the public debate. Spoiler alert — I’m a big proponent of free markets and competition. I support wholeheartedly the Free State Foundation’s mission “to promote, through research and educational activities, understanding of free market, limited government, and rule of law principles . . . to advocate laws and policies true to these principles.” In keeping with this theme, my remarks today will begin with the benefits of free markets, competition, and deregulation. Next, I will discuss the restoration of the FTC’s jurisdiction over broadband, where competition laws, and not regulations, now appropriately provide the primary safeguards for consumers. And finally, I will turn to privacy and discuss the market imperfections and other imperatives that I believe drive the need for federal privacy legislation. 5 Consequences for consumers are even more dire when government pushes business out of the market entirely. Bureaucrats simply cannot gather and assess all of the information it takes for markets to run efficiently, and cannot swiftly adjust their plans to reflect new data as it becomes available. Consider comparator countries in which one country has replaced free markets with command and control. As of the year 2000, the average life expectancy for men in South Korea is 8.1 years longer than for men in North Korea, and the average life expectancy for women in South Korea is 11.2 years longer than for women in North Korea.8 Similarly, even 30 years after the fall of the Berlin Wall, people in the former East Germany earn 86 percent of the after-tax income of their West German counterparts, East German per capita GDP is 75 percent of West German per capita GDP, and Germans in both regions say living standards in the former East Germany have not caught up with those in the former West Germany.9 Against this backdrop, it becomes clear that limited government intervention in the market creates significant benefits for consumers. Given not only the experience of the United States, but the compelling examples of other countries around the world during the 20th and 21st centuries, I strongly support President Trump’s deregulatory agenda. In particular, I applaud his Executive Order requiring that, for every new regulation created, two must be eliminated.10 This reform has helped significantly slow the growth of new federal regulations. One study shows that the federal government under President Trump is issuing roughly half as many new regulations as it did under President Obama.11 Consider one rough measure of the magnitude of 8 See H.J. Kim, Y.S. Ahn, & S.G. Lee, Health Development Experience in North and South Korea, 13 Asia Pac. J. Public Health S51 (2001). 9 See John Gramlich, East Germany has narrowed economic gap with West Germany since fall of communism, but still lags, Pew Research Center FactTank (Nov. 6, 2019), https://www.pewresearch.org/fact-tank/2019/11/06/east- germany-has-narrowed-economic-gap-with-west-germany-since-fall-of-communism-but-still-lags/. 10 Executive Order 13,771, 82 Fed. Reg. 9339 (Feb. 3, 2017). 11 Susan E. Dudley, Geo. Wash. Univ. Regulatory Studies Center, A Two-Year Lookback on Trump’s Deregulatory Record, July 15, 2019, https://regulatorystudies.columbian.gwu.edu/two-year-lookback-trump’s-deregulatory-record 6 regulations. In the United States, all regulations are contained in the U.S. Code of Federal Regulations (CFR). At the end of President Reagan’s second term, the CFR ran to 122,000 pages. At the end of President Obama’s second term, it had reached a staggering 186,000 pages. In 2018, President Trump succeeded in reducing the length of the CFR.12 I am pleased that the FTC has contributed to this laudable trend. In recent years, the FTC has rescinded several Rules and Guides. 13 Some of these efforts stem from the FTC’s longstanding practice of conducting regular review of its Rules and Guides on a rotating basis. These systematic reviews are thorough: we seek comment on whether regulations remain necessary; their costs and benefits to businesses and consumers; and the effect, if any, that changes in relevant technological, economic or environmental conditions should have on them. The Commission seeks to be receptive and responsive to comments from stakeholders, often making regulatory revisions to address changing market forces. I support these deregulatory efforts but believe the Commission can and should do more. In my time as a Commissioner, several of my dissents have highlighted misguided attempts to expand regulatory constraints14 or missed opportunities to roll back needlessly prescriptive 12 Geo. Wash. Univ. Regulatory Studies Center, Reg Stats, https://regulatorystudies.columbian.gwu.edu/reg-stats. The FTC repealed the Picture Tube Rule, which the Commission determined was no longer necessary to prevent deceptive claims regarding the size of television screens. https://www.govinfo.gov/content/pkg/FR-2018-10- 09/pdf/2018-21803.pdf. The FTC revised the Jewelry Guides, removing outdated provisions as well as lifting restrictions that required marketers of man-made gemstones to use only certain specified labels to describe the stones. https://www.ftc.gov/system/files/documents/public_statements/1393857/g71001_jewelry_guides_statement_of_basi s_and_purpose_final_8-8-18.pdf, 94-95. And, just last year, the FTC rescinded the Nursery Guides, rules governing the sale of outdoor plants, because they served little purpose for industry or consumers. https://www.ftc.gov/news- events/press-releases/2019/06/ftc-approves-proposal-rescinding-nursery-guides. 14 See Separate Statement of Commissioner Christine S. Wilson Concurring in Part and Dissenting in Part Concerning FTC v. Avant, LLC (April 15, 2019), https://www.ftc.gov/public-statements/2019/04/separate- statement-commissioner-christine-s-wilson-concurring-part; Dissenting Statement of Commissioner Noah Joshua Phillips and Commissioner Christine S. Wilson – Regulatory Review of Safeguards Rule (March 5, 2019), https://www.ftc.gov/public-statements/2019/03/regulatory-review-safeguards-rule-dissenting-statement- commissioner-noah; see also Concurring Statement of Commissioner Christine S. Wilson and Commissioner Noah Joshua Phillips (Feb. 28, 2020) (Public Workshop Examining Information Security for Financial Institutions and 7 obligations.15 I will continue to work with the FTC staff and my colleagues at the Commission on a deregulatory agenda. Consistent with my dim view of regulations, and of interest to this audience, I applaud the repeal of the Open Internet Order and the passage of the Restoring Internet Freedom Order. The histories of the ICC and CAB foreshadow the beneficial results following elimination of net neutrality. For example, following numerous blunders, the rail and trucking industries were significantly deregulated starting in the late 1970s, and the ICC was disbanded entirely in 1996. As a result, railroads optimized their networks. They pared unproductive routes and reduced labor costs, increasing efficiency markedly on their remaining routes.16 Rail rates eventually fell across the board,17 and declines were particularly steep for bulk commodities like grain, lumber, and coal that could be moved much more effectively using methods that ICC regulations had previously discouraged.18 Information Related to Changes to the Safeguards Rule), https://www.ftc.gov/public-statements/2020/02/concurring- statement-commissioners-christine-s-wilson-noah-joshua-phillips. 15 See Dissenting Statement of Commissioner Christine S. Wilson on the Notice of Proposed Rulemaking: Energy Labeling Rule (Dec. 10, 2018), https://www.ftc.gov/public-statements/2018/12/dissenting-statement-commissioner- christine-s-wilson-notice-proposed. 16 James M. MacDonald & Linda C. Cavalluzzo, Railroad Deregulation: Pricing Reforms, Shipper Responses, and the Effects on Labor, 50 ILR REV. 80, 90 (1996) (concluding that because of deregulation, “shippers switched to low-cost methods of transport, productivity measures grew sharply, shipping rates fell, and carrier profits grew”). 17 Wesley W. Wilson, Market-Specific Effects of Rail Deregulation, 42 J. INDUS. ECON. 1, 20 (1994) (“The evidence suggests that the majority of commodities prices initially rose under deregulation, reflecting greater market power and modest cost savings. By 1988, however, deregulation produced lower prices in most commodity classifications and did not increase prices in other classifications, suggesting that advances in productivity have dominated any adverse market power effects…. With price decreases and cost savings from deregulation, welfare gains from deregulation are likely positive.”). 18 See James M. MacDonald & Linda C. Cavalluzzo, supra note 15, at 83 (“Railroads moved aggressively in the post-Staggers era to offer volume discounts, and particularly large discounts to unit trains, to shippers of ‘bulk’ products, such as grain, lumber, coal, and other minerals. Because shippers must invest in specialized loading and storage facilities for unit trains, they will not do so without lower rates or improved services.”); RICHARD D. STONE, THE INTERSTATE COMMERCE COMMISSION AND THE RAILROAD INDUSTRY: A HISTORY OF REGULATORY POLICY, at 52 (1991) (“Other ICC rate policies forced the railroads to postpone the use of unit trains (a whole trainload of cars permanently coupled and shuttling back and forth from producer to consumer – most frequently from coal mines to power plants) in the East for years.”). 10 Section 5 of the FTC Act prohibits unfair methods of competition. Its scope is viewed as roughly coterminous with the Sherman Act, our country’s main antitrust law. Through the competition provisions of Section 5, the FTC can effectively address the types of conduct that have concerned net neutrality advocates. Although the Commission has not specifically challenged ISPs regarding these practices, it has sued companies for foreclosing rival content in an exclusionary or predatory manner.26 The Commission also has challenged anticompetitive access,27 discrimination,28 pricing,29 and bundling practices.30 In addition, the FTC investigates whether vertical mergers would foreclose competition in upstream or downstream markets,31 and, where appropriate, imposes obligations to maintain competition post-merger.32 To address these types of practices in the technology space, the Commission is actively strengthening its existing expertise in technology and broadband markets. A year ago, the Commission launched a Technology Task Force, which has now become a permanent division 26 See, e.g., Realcomp II Ltd., FTC File No. 061-0088, https://www.ftc.gov/enforcement/cases-proceedings/061- 0088.realcomp-ii-ltd-matter (challenging conduct and issuing order that forbids real estate multiple listing service from discriminating against listings from discount real estate brokers when transmitting listing information to websites). 27 See, e.g., McWane, Inc., and Star Pipe Products, Ltd, FTC File No. 101-0080b, https://www.ftc.gov/enforcement/cases-proceedings/101-0080b/mcwane-inc-star-pipe-products-ltd-matter (order prohibiting exclusive dealing policy that prevented distributors from purchasing from new competitor). 28 See, e.g., America Online, Inc. and Time Warner Inc., FTC File No. 001-0105, https://www.ftc.gov/enforcement/cases-proceedings/0010105/america-online-inc-time-warner-inc. (imposing conditions to permit merger that included prohibiting discrimination on basis of affiliation with merged firm in the transmission of content). 29See, e.g., Polygram Holding, Inc.; Decca Music Group Limited; UMG Recordings, Inc.; and Universal Music & Video Distribution Corp. (Three Tenors), FTC File No. 001-0231, https://www.ftc.gov/enforcement/cases- proceedings/0010231/polygram-holding-inc-decca-music-group-limited-umg-recordings (issuing order prohibiting agreements not to discount). 30 See, e.g., Toys R Us, Inc. FTC File No. 091-0082, https://www.ftc.gov/enforcement/cases-proceedings/091- 0082/toys-r-us-inc. (issuing order that included prohibition of vertical agreements requiring sales of bundled products when selling to competitors). 31 See, e.g., Statement of Chairman Simons, Commissioner Phillips, and Commissioner Wilson, Sycamore Partners II, L.P., No. 181-0180, Jan. 28, 2019 32 See, e.g., General Electric Company, FTC File No. 131-0069, https://www.ftc.gov/enforcement/cases- proceedings/131-0069/general-electric-company-matter. 11 within the Bureau of Competition. The Technology Enforcement Division is comprised of antitrust attorneys and technologists charged with monitoring U.S. technology markets, including the internet ecosystem. I can assure you that they are incredibly busy. We’ve touched on competition; let’s turn to consumer protection. Section 5 of the FTC Act also prohibits unfair or deceptive acts or practices. Using this consumer protection authority, the FTC has addressed a variety of unlawful practices undertaken by ISPs. Our enforcement actions have addressed misleading representations, throttling, blocking, and privacy and data security practices. For example, the FTC settled charges brought against AT&T in 2014 alleging that the carrier promised consumers unlimited data but then reduced speeds – in some instances by nearly 90% — for those with unlimited data plans.33 AT&T must pay $60 million to consumers harmed by these practices. The FTC also addressed throttling practices in an enforcement action against TracFone Wireless, Inc.34 There, we challenged deceptive advertising that promised unlimited data to consumers but failed to disclose that TracFone slowed service by 60 to 90 percent after users exceeded certain data thresholds. The FTC reached a settlement with the company that included injunctive relief and $40 million in consumer redress. We have also challenged unfair privacy and security practices by ISPs. In one action, we alleged that an ISP engaged in unfair practices through distribution of spam, child pornography, malware, and other harmful electronic content.35 In addition, we have brought cases against two 33 FTC v. AT&T Mobility, LLC, No. 14-cv-4785-EMC (N.D. Cal. 2019), https://www.ftc.gov/enforcement/cases- proceedings/122-3253/att-mobility-llc-mobile-data-service. 34 FTC v. TracFone Wireless, Inc., No. 15-cv-392 EMC (N.D. Cal. Feb. 20, 2015) (consent order), https://www.ftc.gov/enforcement/cases-proceedings/132-3176/straight-talk-wireless-tracfone-wireless-inc. 35 FTC v. Pricewert LLC, et al., No. 09-CV-2407 (N.D. Cal. 2010), https://www.ftc.gov/enforcement/cases- proceedings/092-3148/pricewert-llc-dba-3fnnet-ftc. We also investigated Verizon Communication for unreasonably failing to secure its routers and issued a closing letter in 2014. Closing Letter to Dana Rosenfeld, Counsel for 12 ISPs under the Fair Credit Reporting Act alleging that they imposed less favorable terms on consumers who had negative information on their credit reports, without providing the notices required by law. We obtained a $1.9 million civil penalty against Time Warner and a $2.95 million penalty against Sprint.36 And, finally, we have launched a study of Internet broadband providers and related entities to examine how the companies collect, retain, use, and disclose information about consumers and their devices.37 When the Open Internet Order was repealed, many were concerned that competition and consumers would suffer. (There were also dire predictions of near-apocalyptic proportions that, needless to say, have not come to pass.) I can assure you that the FTC is closely monitoring this arena for both competition and consumer protection practices that could violate Section 5. And we will not hesitate to investigate and bring law enforcement actions where appropriate. III. Privacy Legislation Although I am a proponent of free markets, I fully recognize that markets do not always function perfectly. Sometimes issues arise because companies engage in conduct prohibited under the antitrust laws, and sometimes issues arise because companies make false or misleading statements. In these one-off instances, law enforcement on a case-by-case basis is appropriate. The business practices of ISPs, which we just discussed, provide a good example of this category. Verizon Communications, Inc. (Nov. 12, 2014), https://www.ftc.gov/enforcement/cases-proceedings/closing- letters/verizon-communications-inc. 36 U.S. v. Time Warner Cable, Inc., No. 122-3149 (S.D.N.Y. 2013); https://www.ftc.gov/enforcement/cases- proceedings/122-3149/time-warner-cable-inc; U.S. v. Sprint Corp., No. 2:15-cv-9340 (D. Kansas 2015), https://www.ftc.gov/enforcement/cases-proceedings/142-3094/sprint-corporation-sprint-asl-program-0. 37 Press Release, FTC Seeks to Examine the Privacy Practices of Broadband Providers (March 26, 2019), https://www.ftc.gov/news-events/press-releases/2019/03/ftc-seeks-examine-privacy-practices-broadband-providers 15 resignation, reflects the notion that consumers rationally choose to forego expending significant time and effort protecting personal information.46 As we all know, it is extremely cumbersome to manage online personal data. For example, a recent article noted that some mobile apps ask users for over two hundred permissions and even the average app asks for about five.47 Another article describing a study of smart speakers noted that manually reviewing and deleting thousands of recordings of smart speaker interactions presents an undue burden for users.48 Moreover, data breaches routinely expose sensitive consumer data.49 Together, these two concepts of information asymmetry and privacy resignation explain the privacy paradox and defy the notion that consumers do not value their privacy. The bottom line: markets function inefficiently when consumers face significant information asymmetries, including incomplete information about product features and quality.50 In the face of documented market failures, government intervention may help protect consumers. This is the situation we face in privacy today. Consumers’ data is collected, maintained, shared, and monetized in ways that consumers cannot see and cannot avoid. As demonstrated by the FTC’s robust enforcement program, some of these practices cause harm. A privacy law can provide needed transparency so that consumers can begin to make informed choices. 46 Hanbyul Choi et al., The Role Of Privacy Fatigue In Online Privacy Behavior, 81 COMPUTERS HUM. BEHAV. 42 (2018) (explaining that the “increasing difficulty in managing one’s online personal data leads to individuals feeling a loss of control” and that “[f]requent data breaches may make people feel as though they have no control over personal information, and ultimately drive them into a state of resignation about online privacy.”). 47 Woodrow Hartzog & Neil Richards, Privacy’s Constitutional Moment and the Limits of Data Protection, 61 B.C. L. REV. 1, 53 (forthcoming 2020) (citations omitted). 48 Nathan Malkin et al., Privacy Attitudes of Smart Speaker Users, 2019 PROC. PRIVACY ENHANCING TECH. 250, 262 (2019), https://petsymposium.org/2019/files/papers/issue4/popets-2019-0068.pdf. 49 Rae Hodge, 2019 Data Breach Hall of Shame: These Were the Biggest Data Breaches of the Year, CNET (Dec. 27, 2019), https://www.cnet.com/news/2019-data-breach-hall-of-shame-these-were-the-biggest-data-breaches-of- the-year/. The article does not mention headline-grabbing data breaches at Waze, Wawa, 7-11, T-Mobile, Quest Diagnostic, Flipboard, Dunkin Donuts, and Ascension. 50 PINDYCK, supra note 38, at 625-26, 631-56. 16 Information asymmetry is one important reason for privacy legislation but there are others, including predictability and guidance for businesses. On the domestic front, businesses need clarity and certainty regarding privacy rules of the road. CCPA became effective on January 1, 2020,51 and other states are seeking to pass their own privacy laws, creating an emerging patchwork of regulatory frameworks.52 The result? Burdensome compliance costs and constrained interoperability that undercut the ability of U.S. companies to compete globally. Federal privacy legislation could help avoid this unnecessary burden on businesses while simultaneously providing appropriate protections for consumers. Privacy legislation also could address the emerging gaps in sector-specific approaches to privacy laws created by evolving technologies. For example, the Health Insurance Portability and Accountability Act (“HIPAA”) applies to certain doctors’ offices, hospitals, and insurance companies, but not generally to cash practices, wearables, apps, or websites like WebMD.53F 53 But sensitive medical information is no longer mostly housed in practitioners’ offices. Your phone and watch now collect information about your blood sugar, your exercise habits, your fertility, and your heart health. Because data is ubiquitous, we need a comprehensive federal privacy law. 51 Cal. Civ. Code §§ 1798.100-1798.199 (West 2020). 52 The National Council of State Legislatures found that privacy bills or bill drafts were introduced or filed in at least 25 states and in Puerto Rico in 2019. Nat’l Council of State Legislatures, 2019 Consumer Data Privacy Legislation (Jan. 3, 2020), https://www.ncsl.org/research/telecommunications-and-information- technology/consumer-data-privacy.aspx; see also Michael Beckerman, Americans Will Pay a Price for State Privacy Laws: The Modern Data Economy Is Too Big to Regulate at the State Level, N.Y. TIMES (Oct. 14, 2019), https://www.nytimes.com/2019/10/14/opinion/state-privacy-laws.html (“Fourteen states have considered legislation on internet service providers. Twenty-five states and Puerto Rico have considered legislation focused on various aspects of consumer data. All 50 states, the District of Columbia, Guam, Puerto Rico, the Virgin Islands and even some municipalities have their own laws about how to respond to data breaches. All of those laws are subject to change. In 2019, states considered at least 21 measures to amend data breach laws. Over 150 pieces of legislation on consumer data have been considered, and five states passed bills mandating privacy studies to inform future legislation.”). 53 The Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. § 1320d. 17 On the international front, GDPR came into effect in May 2018.54 Some countries are now adopting various GDPR provisions.55 Others are striking out on their own.56 This growing number of diverging privacy regimes will create incremental hurdles to efficient cross-border data flows. Global data flows have transformed international trade by establishing digital platforms to export goods, improving efficiency and increasing productivity, reducing barriers to market entry, allowing businesses (including small enterprises) to reach vastly larger markets, and improving global value chains. Consistency among regulatory frameworks reduces company costs, promotes international competitiveness, and increases compliance with privacy standards.57 Accordingly, a comprehensive U.S. privacy law that enacts a single privacy standard could facilitate global interoperability, helping to bridge the differences between U.S. and foreign privacy regimes. Having discussed why a free-marketeer like me supports federal privacy legislation, I’d like to highlight the principles and elements I hope to see in a privacy law. Of course, I recognize that the appropriate contours and contents of privacy legislation pose complicated 54 General Data Protection Regulation (EU) 2016/679, 2016 O.J. (L119/1). 55 For example, Thailand’s Personal Data Protection Act takes effect on May 27, 2020. Chusert Supasitthumrong, The Reach and Liabilities of the Personal Data Protection Act, BANGKOK POST (Sept. 3, 2019), https://www.bangkokpost.com/business/1741919/the-reach-and-liabilities-of-the-personal-data-protection-act. Brazil’s legislature passed the General Data Protection Law, which is scheduled to take effect in 2020. Bruno Bioni et al., Int’l Ass’n of Privacy Prof’ls, GDPR Matchup: Brazil's General Data Protection Law, IAPP (Oct. 4, 2018), https://iapp.org/news/a/gdpr-matchup-brazils-general-data-protection-law/. Argentina, too, is considering amendments to its Personal Data Protection Law. Diego Fernandez, Int’l Ass’n of Privacy Prof’ls, Argentina's New Bill on Personal Data Protection, IAPP (Oct. 2, 2018), https://iapp.org/news/a/argentinas-new-bill-on-personal- data-protection/. 56 Personal Data Protection Act 2012 (No. 26 of 2012) (Sing.), https://sso.agc.gov.sg/Act/PDPA2012#P1IV-,; Personal Information Protection and Electronic Documents Act (PIPEDA), S.C. 2000, c.5 (Can.), https://laws- lois.justice.gc.ca/eng/acts/P-8.6/page-1.html. 57 FED. TRADE COMM’N, PROTECTING CONSUMER PRIVACY IN AN ERA OF RAPID CHANGE 9-10 (2012), https://www.ftc.gov/sites/default/files/documents/reports/federal-trade-commission-report-protecting-consumer- privacy-era-rapid-change-recommendations/120326privacyreport.pdf. 20 and I agree. While there undoubtedly will be some tradeoffs between privacy and competition, I am confident that Congress can design a privacy bill that provides appropriate protections for consumers while maintaining competition and fostering innovation. In addition to those high-level principles, I would recommend that privacy legislation include a few additional elements: o First, the FTC should be the enforcing agency. We have decades of experience in bringing privacy and data security cases, and we have the requisite expertise to tackle any new law effectively.64 o Second, any legislation should include civil monetary penalties, which Congress has included in other statutes enforced by the FTC, including COPPA65 and the Telemarking and Consumer Fraud and Abuse Prevention Act.66 o Third, the FTC should be given jurisdiction over non-profits and common carriers, which collect significant volumes of sensitive information.67 o Fourth, any law should include targeted and narrow APA rulemaking authority. That way, the FTC can enact rules both to supplement legislation and to permit adjustments in response to technological developments.68 64 See Fed. Trade Comm’n, Media Resources on Privacy and Security Enforcement, https://www.ftc.gov/news- events/media-resources/protecting-consumer-privacy/privacy-security-enforcement (last visited February 7, 2020) (providing links to privacy and security cases, public events, statements, reports, amicus briefs, and testimony). 65 Children’s Online Privacy Protection Act (“COPPA”), 15 U.S.C. §§ 6501-6506 (2018). 66 15 U.S.C. §§ 6101-6108 (2018). 67 For many years, the Commission has testified in favor of eliminating the common carrier exemption. Fed. Trade Comm’n, Prepared Statement of the Federal Trade Commission: “Oversight of the Federal Trade Commission,” Before the Subcommittee on Consumer Protection and Commerce, United States house of Representatives Committee on Energy and Commerce 17 (May 8, 2019), https://www.ftc.gov/system/files/documents/public_statements/1519212/p180101_house_ec_oversight_testimony_ may_8_2019.pdf; Fed. Trade Comm’n, Prepared Statement of the Federal Trade Commission: “Oversight of the FTC,” Before the Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security of the Committee on Commerce, Science, and Transportation, United States Senate 16 (Nov. 27, 2018), https://www.ftc.gov/system/files/documents/public_statements/1423835/p180101_commission_testimony_re_oversi ght_senate_11272018_0.pdf. 68 COPPA provides a good example of the appropriate division of labor between Congress and the FTC. There, Congress made the requisite value judgments. For example, Congress determined it was important for websites targeted to children to obtain verifiable parental consent prior to any collection, use, and/or disclosure of personal information from children. 15 U.S.C. §§ 6502. The FTC was then empowered through rulemaking to outline the mechanics of how websites or online services could obtain verifiable parental consent. Children’s Online Privacy Protection Rule, 16 C.F.R. § 312.5. 21 o Fifth, any law should include preemption. Preemption is key to precluding a patchwork of conflicting state laws that will unnecessarily burden businesses and hinder domestic and international data flows. And I’ll end the list with something a law should not include – a private right of action, which would allow plantiffs’ lawyers rather than expert agencies like the FTC and state attorneys general to establish a sound and consistent national policy. V. Conclusion I want to again thank the Free State Foundation for inviting me to speak here today. As I noted at the outset, the topics of competition, freedom, and privacy are of perennial importance. I commend the Free State Foundation for its research and education efforts to support free market principles. Government-controlled markets create toxic outcomes for consumers and citizens. But particularly in this era, when we face an onslaught of proposals to expand the role of government, we unfortunately must commit to a constant struggle against the audacity of bad ideas. We must be alert, fighting each day to defend our free markets, our system of free enterprise, and ultimately our individual freedoms. In the words of President Thomas Jefferson, “The price of freedom is eternal vigilance.” Let us all remain vigilant!