By Amy Miller. Originally published on FTC:Watch on April 7, 2017.
Utah Attorney General Sean Reyes, a leading candidate to chair the Federal Trade Commission, learned about unintended legal liabilities as a law student at Berkeley, but not in a classroom.
Reyes, a surrogate for the Donald Trump campaign in Utah and Nevada, has emerged as a leading candidate for FTC chairman. He made consumer protection a priority as attorney general, and teamed up with District of Columbia Attorney General Karl Racine, a Democrat, last year in urging the federal government to reopen its investigation into Google's search practices.
But Reyes didn't focus solely on enforcement at a recent talk before an audience of legal and tech professionals in Silicon Valley. Instead, he talked about taking risks, and the unintended, sometimes humorous, consequences that can follow. His experience contains a good analogy, he said, for the legal risks, uncertainty and unintended outcomes tech companies deal with every day.
He wanted to share a story, he said, about the "sharp cultural contrast" he experienced after arriving in Berkeley as a young graduate of Brigham Young University, eliciting laughs immediately from the audience.
"See, that's a joke in and of itself," Reyes told an audience at the "Emerging Technologies and Torts of the Future" conference March 29 in East Palo Alto, California. "I don't even have to tell the story."
Reyes, though, continued his tale. He had landed a spot on the men's volleyball team at Berkeley, he said, and one afternoon after practice he was slated to bring snacks for a visiting church group of about 70 or 80 youngsters. But practice ran late, and with no time to buy food, "I knew I was in trouble," he said.
Luckily, he thought, he ran into some students who had just finished a protest, a familiar sight at Berkeley, and a bake sale. After detailing his predicament, the obliging students gave him the last of their cookies, donuts and brownies — for free.
"I was the hero," Reyes recalled. "I fed the masses. Until about 45 minutes later."
That's when someone from the group asked Reyes if he had made the refreshments himself, and if he had ever eaten pot brownies.
"No, no," Reyes said, aghast.
"I'm not sure, but I think you might have brought some pot brownies," the man said. "Because some of the congregants are having a bad reaction."
Anxiety and fear about being sued by an angry parent immediately washed over him, he said, having just finished a course in torts. No one sued him, he said, but no one ever asked him to bring snacks again.
"That's kind of an analogy for what you all are doing," Reyes told the audience. "You are out there sacrificing. You are out there taking risks. And yet you may be walking into unintended liabilities that you are not even aware of."
Emerging technologies in finance, healthcare and education are booming, with billions of dollars in sales predicted, and it's taken resources and sacrifices to create products that make lives better, Reyes said.
But they face many legal risks. All the data being collected by Internet of Things devices is also creating serious liabilities for companies and consumers, he said.
"We as a society can often become more vulnerable in ways no one would have predicted," Reyes said. "In addition to that, you face policymakers who sometimes don't get it, who don't understand."
One of the biggest issues tech companies face is that there are no federal cybersecurity guidelines and standards, he said. Reyes said he'd like to see legislation that creates "nimble" standards state AGs could follow and enforce, and that can also be updated and tweaked as technology evolves.
"I will do whatever I can in whatever position I have to make sure there's more reliability for cybersecurity standards," Reyes said.
Reyes also cautioned against overreach, saying regulators need to practice "regulatory humility," a phrase used often by acting FTC Chairman Maureen Ohlhausen, a fellow Republican. Companies will be more willing to work with regulators if they don't think regulators are just gathering data for a "fishing expedition," he said.
"Harms have to be real," Reyes said.
At the same time, tech companies shouldn't be afraid to meet with their state attorneys general to talk about their products and any regulatory issues they may face, Reyes said. His office has even helped companies, including a fresh fruit and vegetable delivery service, navigate tricky regulations so they can get their products to consumers.
"The human touch is incredibly important," he said, adding that "most of my colleagues don't bite."
Meeting informally with an AG will never get a company favored treatment if there's ever a problem, he said.
But regulators "may be less likely to jump to conclusions if we know who you are and your business," Reyes said. "It won't help you if you're breaking the rules, but if you're not breaking the rules, it can be very helpful to have a relationship."
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