America's tech regulator gets five new commissioners in one go

THE Federal Trade Commission, the agency responsible for data privacy and antitrust enforcement, had a staid 2017. Amazon’s $13.7bn acquisition of Whole Foods grocery chain sailed past it after a short review. No acquisitions made by Google or Facebook were examined, despite mounting concerns that tech giants are able to buy up new firms before they ripen into true competition. The FTC was short-staffed for most of the year: thanks to presidential foot dragging and partisan spats, just two out of five commissioners were in place. As The Economist went to press, the Senate was due to confirm five new commissioners at once, the first time that has happened.

The interrogation of Mark Zuckerberg, Facebook’s CEO, may have proved tepid, but it saw lawmakers grappling with big questions for the first time: what exactly Facebook (and, by extension, its tech firm brethren) is, and what, if anything, should be done about the power it holds? The FTC’s new chairman, Joseph Simons, an antitrust lawyer who was chief of the commission’s competition bureau in the early 2000s, is well versed in these questions. He addressed them directly in his confirmation hearing, telling the Senate Commerce Committee that while big companies that provide high-quality services are fine, antitrust laws should be vigorously enforced if firms use anticompetitive means to get big or stay big.

If he wants to act upon that sentiment, Mr Simons will find support in the form of Rebecca Slaughter, the fifth and final nominee for commissioner. Ms Slaughter played a role in shaping the Democrats’ Better Deal campaign platform, which includes promises to regulate antitrust not solely on the basis of the price and output of firms’ products, but also on whether corporate practices “limit access to services, stifle innovation, or hinder the ability of small businesses and entrepreneurs to compete”. For firms with free products, such as Facebook and Google, such qualitative regulation could prove problematic.

The other seats will be filled by Rohit Chopra, a Democrat formerly of the Consumer Financial Protection Bureau, and Noah Phillips and Christine Wilson, Republicans. The commissioners start with a backlog of work. The FTC has yet to rule on the gigantic 2017 Equifax data breach, and is investigating whether Facebook’s provision of data to Cambridge Analytica violated a settlement agreement the firm made with the agency in 2011. Thomas Struble of R Street, a policy research non-profit, says the settlement required Facebook not to misrepresent either how much information third parties can get hold of, or how it verifies the privacy practices of those parties.

The Cambridge Analytica scandal hinges on these questions. The answers, and any penalties, are for the refurbished FTC to determine. Standard treatment for tech-company violations has merely been further settlement agreements, although Facebook’s existing agreement does come with financial penalties for violation that run into the trillions.

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