House Members Join Senators in Urging FTC Action Against P2P
A bipartisan group of House members turned up pressure on the FTC to determine whether peer-to-peer networks are violating the FTC Act. While P2P has been under fire mostly for enabling copyright infringement, 17 members of the House Govt. Reform Committee led by Chmn. Davis (R-Va.) and ranking Democrat Waxman (Cal.) suggested other issues that might be in the FTC’s jurisdiction, such as deceptive trafficking of pornography and spyware. The Aug. 10 letter, a copy of which we've obtained, was sent to FTC Chmn. Timothy Muris, whose last day on the job was yesterday (Aug. 15). He’s been replaced by Deborah Majoras, through a recess appointment by President Bush.
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Davis and Waxman have held several hearings on P2P this Congress and pressed through the House a bill by Waxman, HR- 3159, that would all but prohibit P2P on govt. networks. That bill cleared the Senate Governmental Affairs Committee unamended and awaits a Senate floor vote. “We are in favor of additional investigation” into P2P and its relation to the FTC, the 17 House members wrote, “including many of the issues raised by our Senate colleagues.” While recognizing “that P2P technology is not inherently bad,” the committee members said they felt an obligation to protect consumers, particularly children. They urged the FTC to keep investigating and asked to receive the results. The letter didn’t address copyright infringement, over which the FTC has no jurisdiction. Neither the FTC nor the House Govt. Reform Committee had commented on the letter by our deadline.
FTC officials have been under pressure from several senators to exert authority over P2P but have so far resisted. Last spring, 5 senators urged the FTC in a letter to take action. Senate Judiciary Committee Chmn. Hatch (R- Utah) and ranking Democrat Leahy (Vt.), Senate Appropriations Committee Chmn. Stevens (R-Alaska) and Sens. Boxer (D-Cal.) and Smith (R-Ore.) argued that children are misled into downloading inappropriate and sometimes illegal content, and that pedophiles “use file sharing to distribute illegal pornography.” The FTC gave a tentative response. It said in part that any failure by P2P software makers to disclose to consumers risks of using their software wouldn’t seem to violate FTC Act Sec. 5 barring “unfair and deceptive practices.” Boxer at a Senate Commerce Competition Subcommittee hearing called that response “inadequate.” Arguing most P2P activity is illegal, she told FTC Dir.- Bureau of Consumer Protection Howard Beales that she and subcommittee Chmn. Smith (R-Ore.) were prepared to write legislation authorizing the FTC to act if the agency concluded it couldn’t.
Pornography and spyware are 2 avenues the FTC could pursue against P2P, the House Govt. Reform members wrote. They cited a General Accounting Office report commissioned for the committee that found “child pornographic content can easily be found on and downloaded from P2P networks,” and that these often are labeled with keywords such as “Britney,” “Pokemon” and “Olsen twins.” Of the results for GAO searches on those terms, 56% were pornographic files, although only 1% was child pornography.
The FTC has begun an examination of spyware, and held an all-day workshop on it this year. P2P wasn’t a frequent topic there, however. The House Govt. Reform letter cited a committee investigation that found “P2P programs are often bundled with additional programs known as spyware and adware.” The letter said “computer users may be wholly unaware that spyware or adware is operating on their machines, collecting their personal data, and using that data to generate revenue for the seemingly free P2P programs.”
Members of Congress aren’t the only ones frustrated with the FTC’s inaction on spyware. The Center for Democracy & Technology (CDT) filed a complaint against a spyware company at the FTC in Feb., and included a detailed outline of the FTC’s jurisdiction. “We haven’t seen any action on it,” Assoc. Dir. Ari Schwartz said. Unlike the House Govt. Reform Committee members, however, Schwartz didn’t see the FTC’s primary target as P2P. “Not all P2P is tied to spyware,” he said, but when it is, the FTC should go after it. “The FTC’s just taking so long on this,” he said.