Khan Would End FTC Privacy Effort if Congress Enacted Law
The FTC is willing to suspend its privacy rulemaking if Congress enacts a new federal privacy law, Chair Lina Khan told House Commerce Committee members Tuesday.
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The House Innovation Subcommittee hosted Khan and Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya during a hearing on the agency’s $590 million budget request for fiscal 2024, an increase of about $160 million from 2023. House Commerce Committee Chairwoman Cathy McMorris Rodgers, R-Wash., raised concerns about the agency’s privacy rulemaking. She asked Khan to commit to suspending the effort if Congress passes a law and to stick to the “narrow contours” of the rulemaking authority prescribed in the new law.
“Absolutely,” Khan told her. “We stand ready to enforce any privacy legislation that Congress passes.” Slaughter and Bedoya agreed. Slaughter told ranking member Frank Pallone, D-N.J., that Congress can achieve far more by passing a new privacy law than the FTC can through rulemaking.
The agency is wasting precious resources by pursuing so many rulemakings, said House Innovation Subcommittee Chairman Gus Bilirakis, R-Fla. He asked if Khan is willing to work with Republicans to move away from “progressive legal theories” and focus on the fraud program at the FTC.
Fraud remains a core part of the agency’s work, but the U.S. Supreme Court’s decision in AMG Capital Management v. FTC, which stripped FTC authority to obtain monetary relief, was a “huge setback,” said Khan. Staff has acted “heroically” to find ways to combat fraud without Section 13(b) authority, she said. Slaughter noted the agency recouped about $10 billion using the authority in the 10 years leading up to the AMG decision. The FTC is thrilled to work with Congress to continue to try to craft legislative solutions to fix the Section 13(B) issue, said Khan. Slaughter said without the authority, companies have far less incentive to settle with the agency, and staff is creative but it’s hard to calculate the exact loss from the AMG decision.
House Commerce is committed to enacting a new privacy law, said ranking member Frank Pallone, D-N.J. He asked for Khan’s thoughts on the data minimization requirements included in the American Data Privacy and Protection Act, which the committee passed 53-2 in 2022 (see 2303010063). Data minimization requirements are “vital,” said Khan: The less data collected upfront, the less risk for major data privacy hacks.
Bilirakis said it's “regrettable” there weren’t any Republican commissioners to testify, citing the resignations of Commissioners Noah Phillips and Christine Wilson. He accused Khan of “stretching” agency authority and driving career staff away from the agency in record numbers due to her “progressive” agenda.
Democrats have a “very different” opinion about the direction and success of the agency under Khan, said House Innovation Subcommittee ranking member Jan Schakowsky, D-Ill. She noted the FTC’s record-breaking children’s privacy settlement with Epic Games, saying the agency needs additional authority and resources to accomplish its mission. She noted Phillips and Wilson departed the agency willfully before their terms expired. Republicans don’t like the agency’s enforcement role and would “simply gut” the agency at the “expense of consumers” if given the chance, said Pallone, backing restoration of the agency’s Section 13(b) authority. Slaughter said agency staffers have “full plates,” and their “top concern” is that the agency lacks the proper resources it needs to protect consumers. She urged Congress to pass a comprehensive privacy law and restore the agency’s consumer redress authority.