Net Neutrality, Tech Antitrust Questions Anticipated at Senate Commerce FTC Confirmation Hearing

Senate Commerce members we talked to were largely tight-lipped about what they planned to focus on during the hearing. Sen. Ed Markey, D-Mass., said he will focus on “consumer protection and privacy issues” and whether the four nominees “understand the FTC's role as a bulwark of protection against anti-competitive activity.” Markey suggested he also has concerns about at least some of the nominees. Senate Commerce ranking member Bill Nelson, D-Fla., said he has a plan for his line of questioning -- “stay tuned.” Senate Consumer Protection Subcommittee ranking member Richard Blumenthal, D-Conn., planned to “determine” his hearing priorities late Tuesday.

There will likely be significant interest in nominees' vision of FTC future direction, especially since the commission has been “deadlocked” since now-former Commissioner Edith Ramirez resigned last February (see 1701130030), said R Street Institute Tech Policy Manager Tom Struble. The four would give the FTC a 3-1 Republican majority, with Chopra the Democrat. Simons would replace current Democratic Commissioner Terrell McSweeny, whose term has expired but who can stay.

Some will be watching to see whether Simons or the others aim to continue priorities acting FTC Chairman Maureen Ohlhausen set when she took the reins shortly after Trump became president, Struble said. The FTC has “limited resources so they have to pick and choose their battles wisely,” he said. Any conversation about the FTC's path will include multiple antitrust and privacy issues, lobbyists said. Many in the tech sector anticipate questions about whether the nominees believe the FTC should take a more critical antitrust look at major internet firms like Google, Amazon and Facebook, one tech lobbyist said. Some Democratic senators may choose to make the Republicans' use of a Congressional Review Act resolution last year to end FCC ISP privacy rules (see 1703280076) a “point of contention,” another tech lobbyist said.

Ex-FTC Chairman William Kovacic, now George Washington University Law School Competition Law Center director, said he believes people will be surprised by the quality of the nominees. “I think there was some concern, given the flamboyance of the president and the possible interest he would have in trying to direct policymaking, that it might be difficult to get really good people to serve," he said. "I think those worries have not been borne out. I think the appointments have given a lot of people confidence that the agency will be in good hands.” Simon was a “very effective and strong enforcement official at the FTC” in the early 2000s, Kovacic recalled. “I expect he will be again, and an active and aggressive enforcer. I’m not sure you could have expected that 13 months ago.” He added that he believes FTC is going to be a lot tougher than critics had anticipated.

Among the topics he said are sure to come up were: Will the FTC adopt a tougher takeover policy? What is the agency going to do to address a rapidly-changing tech industry? How does the agency plan to respond to issues surrounding tech giants and issues for data protection privacy?

The FTC is facing unprecedented challenges to jurisdiction and enforcement authority, said Center for Democracy & Technology’s Privacy & Data Project Director Michelle De Mooy. "We’ll be looking for a sense of where nominees stand on issues like regulating the privacy practices of internet service providers and how they would interpret the agency’s Section 5 ‘unfairness’ authority,” she said of the FTC Act. CDT will look for an understanding of how nominees might define "reasonable" security practices by companies, partly because recent data breach legislation would require them to issue rules on data security.

“I'm sure you'll hear a great deal from members of both parties” about how the FCC's order to rescind its 2015 net neutrality rules will affect FTC authority on the issue, a communications sector lobbyist said. “From the Democrats you'll probably hear questions about whether the nominees think they will have the ability to effectively police violations of net neutrality, and from the Republicans to the contrary.” Ohlhausen said last month the agency is looking forward to its renewed role policing competition in broadband once the FCC order takes effect, noting new transparency requirements included in the rule require carriers to provide information about how they manage traffic (see 1801090067).

There also may be questions about some of the nominees' experience -- or lack thereof -- in antitrust and other FTC matters, some lobbyists said. There may be scrutiny of Chopra and Phillips, whose experience with FTC issues is far more limited, a lobbyist said. Those questions are unlikely to be a major impediment to all four nominees' chances of being confirmed, though Senate Democrats appear likely to insist the full Senate take up the four only once Trump nominates someone to take the remaining vacant Democratic FTC seat, lobbyists said. The Trump administration is considering Rebecca Slaughter, chief counsel to Senate Minority Leader Chuck Schumer, D-N.Y., for the vacant Democratic slot on Schumer's recommendation (see 1802060039).