with Bastien Inzaurralde
The more than 100-year-old FTC is under pressure to modernize to take greater action against Silicon Valley -- and there's broad consensus that the agency should be the one to enforce whatever privacy law potentially emerges in Washington. The GAO report may encourage lawmakers to further empower the FTC so its ready to take on this challenge as it considers how to move forward with a privacy law this year.
The government watchdog directed Congress to consider what agency should oversee Internet privacy, what authorities that agency should have and how to balance privacy with industry’s need to innovate. This sets the stage for two hearings at the end of the month, when lawmakers in the House and Senate will examine policy principles for a federal data privacy framework.
From Rep. Frank Pallone Jr. (D-N.J.), the House Energy and Commerce chairman who requested the report:
From Cambridge Analytica to the unauthorized disclosure of real-time location data, consumers’ privacy is being violated online and offline in alarming and dangerous ways. This report shows Congress MUST act in a comprehensive way to protect consumers.
— Rep. Frank Pallone (@FrankPallone) February 13, 2019
Yet there's a complex debate to be had specifically about FTC authorities. The report found some stakeholders wanted to see the size of fines increase. Some critics have said they are not large enough to actually impact technology titans. Another question raised in the report: Whether the agency should have the power to issue fines against first-time privacy offenders.
The FTC generally can’t do that now. The exception is when the offense involves children because as the report mentions, the only comprehensive federal privacy law is the 25-year-old Children Online Privacy Protection Act.
The few privacy fines it has levied against companies — such as the $22.5 million penalty against Google — came after the search giant violated a previous settlement with the FTC. That’s also the case in the agency’s high-profile probe against Facebook, in an investigation opened following the Cambridge Analytica scandal, when a data analytics firm with ties to President Trump's campaign obtained Facebook users’ data without their consent. The FTC is considering hitting Facebook with a record-setting fine for violating a 2011 agreement.
The government watchdog interviewed a wide range of stakeholders in the privacy debate, including tech companies, industry groups, academics, consumer advocacy groups and former FTC and Federal Communications Commission officials. The interviewees were somewhat divided over how the FTC's authorities should be expanded.
“Some stakeholders suggested that FTC’s current ability to levy civil penalties could also be enhanced,” the report said, Most of the former FTC commissioners said the agency should be able to levy fines for initial violations. Some of the stakeholders, particularly consumer advocacy groups, advocated for the agency to have broader rulemaking authority on data privacy and security issues.
Industry representatives, however, warned regulations can stifle innovation and rulemakings can be lengthy. As CNET reporter Alfred Ng noted, the industry players that the watchdog interviewed want to maintain the status quo:
The GAO's report follows legislative proposals for federal privacy law from several senators, including a bipartisan bill from Sen. Amy Klobuchar (D-Minn.) and Sen. John Neely Kennedy (R-La.). Sen. Brian Schatz (D-Hawaii) introduced a bill last year that gained broad support among other Democrats. Sen. Ron Wyden (D-Ore.) floated a proposal last year, and Sen. Marco Rubio (R-Fla.) introduced legislation earlier this year. Yesterday, the U.S. Chamber of Commerce published it's own draft legislation. But this year's privacy hearings are just getting started, and it's unclear which elements of these proposals will move forward.
The privacy debate comes amid a broader discussion about the future of the FTC — which is also tasked with addressing the competition concerns the technology behemoths present. The FTC is holding its own set of hearings about the future of competition and consumer protection, essentially trying to gather input on how the government should address these challenges in the digital age. The FTC was scheduled to have a hearing this week on privacy and data, but it was rescheduled for April.
“There is a growing debate about the federal government’s role in overseeing Internet privacy,” the report said.
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BITS, NIBBLES AND BYTES
BITS: The school district where the Parkland, Fla., high school shooting left 17 people dead last year is considering adopting an experimental camera software system to monitor students, The Washington Post's Drew Harwell reported. The artificial intelligence-powered system, called Avigilon, has an “appearance search” feature that can surveil students as long as they can be seen by the camera. “The artificial-intelligence software has been trained on millions of images to comprehend the basic look and movement of people, and its builders say it can now recognize students from afar by their appearance — taking into account the shape of their body, their hairstyle, their facial attributes, and the look and color of their clothes,” my colleague wrote.
Supporters of the system say it could identify risky behavior faster than people can. Yet Mahesh Saptharishi, chief technology officer at Motorola Solutions, which bought Avigilon last year, also said that the accuracy of the “appearance search” capability changes with lighting or the time of the year. “The desire for technological solutions to the human problem of school violence has nevertheless emboldened a flood of tech and surveillance start-ups competing for public customers,” Drew reported.
NIBBLES: The Securities and Exchange Commission filed insider trading charges against former Apple executive Gene Levoff, The Post's Hamza Shaban reported. The SEC alleged that Levoff, a former senior director of corporate law and corporate secretary at Apple, traded Apple stock by using insider information at least three times in 2015 and 2016. “Levoff breached his duty of confidentiality to Apple and its shareholders and exploited corporate information for his own benefit,” the lawsuit alleged, according to my colleague. “Through his illegal insider trading in 2015-2016, Levoff profited and avoided losses of approximately $382,000.”
The agency also said in the complaint that as the head of the corporate law office for Apple, Levoff was tasked with ensuring that employees abided by Apple's insider trading rules. “Levoff’s alleged exploitation of his access to Apple’s financial information was particularly egregious given his responsibility for implementing the company’s insider trading compliance policy,” Antonia Chion, associate director of the SEC’s Division of Enforcement, said in statement. “The SEC is committed to pursuing insiders who breach their duties to investors.”
BYTES: Lawmakers on Capitol Hill grilled T-Mobile and Sprint executives over the proposed merger between the two companies during a congressional hearing, The Post's Brian Fung reported. T-Mobile chief executive John Legere told the House Energy and Commerce subcommittee on communications and technology that the merger would increase competition, even though it would at the same time remove one company from the market. Sprint Executive Chairman Marcelo Claure said Sprint would have to increase its debt by billions of dollars to pay for expansions if the merger doesn't materialize.
Phillip Berenbroick, a policy attorney for the consumer group Public Knowledge, dismissed the companies' arguments in favor of the merger. “Don’t buy it. We’ve heard this before,” Berenbroick told lawmakers, according to my colleague. House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) warned that mergers can lead prices to go up for consumers. “For the last eight years, major industry consolidation occurred without significant oversight, and the consequences of that have been borne by consumers and hard-working Americans,” Pallone said. “In the past, we’ve seen mergers jack up consumer prices, cut away meaningful choices and outsource, undercut and eviscerate good-paying jobs.”
PRIVATE CLOUD
— Apple chief executive Tim Cook said the company would examine a Saudi government app that can allow men to track women's travel and prevent them from leaving Saudi Arabia. “I haven't heard about it,” Cook told NPR in an interview on Monday. “But obviously we'll take a look at it if that's the case.” Apple's iTunes and Google Play are both hosting the app, called Absher, Business Insider's Bill Bostock reported. Sen Ron Wyden (D-Ore.) has asked Apple and Google in a letter to “immediately remove” Absher from their app stores.
— Apple's self-driving test cars require more interventions from test drivers than autonomous vehicles from other companies such as Alphabet's Waymo, Bloomberg News's Mark Gurman reported. “Test drivers disengaged the autonomous mode on Apple’s cars once almost every mile, based on data the company disclosed in an annual report to California’s Department of Motor Vehicles,” according to Bloomberg News. “Waymo’s cars went about 11,017 miles between disengagements, and Cruise’s went 5,205 miles.” Apple has criticized the state's disengagement reporting requirements before.
— More technology news from the private sector:
PUBLIC CLOUD
— Federal Communications Commission Chairman Ajit Pai said major carriers may face regulation if they don't carry out an initiative to curb unwanted robo-calls this year, the Verge's Colin Lecher reported. Pai wants carriers to implement caller ID authentication to help put an end to spoofed robo-calls. “If it appears major carriers won’t meet the deadline to get this done this year, the FCC will have to consider regulatory intervention,” Pai said in a statement.
— The Trump administration announced that Apple's Cook and IBM chief executive Ginni Rometty will be among the members of an advisory board on workforce policy, CNBC's Lauren Feiner reported. The American Workforce Policy Advisory Board has 25 members and will help devise a strategy to improve American workers' skills amid technological changes. “Emerging technologies like artificial intelligence will change the way every job is done,” Rometty told CNBC in a statement. “I look forward to finding new ways for all Americans to participate in this digital era by building the job skills that are already in demand in our economy.”
— More technology news from the public sector:
FAST FWD
— News about tech workforce and culture:
#TRENDING
— Tech news generating buzz around the Web:
404 ERROR
— Instagram said it was working to fix an issue that appeared to cause some popular accounts to lose millions of followers, the Verge's Julia Alexander reported. Celebrities such as Ariana Grande and Selena Gomez lost millions of followers on the platform, according to the Verge.
From Instagram:
We’re aware of an issue that is causing a change in account follower numbers for some people right now. We’re working to resolve this as quickly as possible.
— Instagram (@instagram) February 13, 2019
— More news about tech incidents and blunders:
BURN RATE
— Today in funding news:
CHECK-INS
Coming soon:
- Senate Commerce Committee hearing on “policy principles for a federal data privacy framework” on Feb. 27.
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