'Technology is changing our mission,' FTC's McSweeny says

30 April 2018 5:23pm
FTC Sign

27 April 2018. By Leah Nylen.

Four years to the day after she was sworn in as a Federal Trade Commissioner, Terrell McSweeny is making her exit on Friday.

The day before, a balmy April Thursday afternoon, McSweeny visited her alma mater — Georgetown University Law School — to kick off a program that pairs law and computer science students to propose legislation on tricky privacy issues such as geolocation information and police body cameras.

This is “exactly the type of work we need to be doing to inform the policies and the laws to make sure we are getting the right consumer protection ... for the digital age,” McSweeny told the group. “We intuitively understand that the technology we are using in our daily lives, that we are using to communicate with each other, that we are wearing on our bodies and putting in our homes ... is actually powerful. We aren’t awesome at anticipating all of the risks associated with it.”

More than any commissioner in recent memory, McSweeny has focused on technology and how it is fundamentally changing how the FTC pursues its consumer protection and competition missions. She was the first commissioner to attend Defcon, the world’s largest hacker convention, and has spoken at dozens of events and conferences about the privacy and data security concerns raised by the Internet of Things.

Last month, she won an award for a paper she co-authored on how algorithmic pricing could change the way antitrust enforcers look at merger reviews. She has also been a staunch advocate for OTech, the FTC’s newly created Office of Technology Research and Investigation, and the agency’s chief technologist, a separate official charged with making policy recommendations on technology.

“I spent a lot of time here thinking about technology issues, about how technology is changing competition and how technology is impacting consumers,” McSweeny said in an interview this week. “I hope the FTC continues to expand on including technologists and computer scientists and engineers in what we are doing because technology is changing our mission.

"The mission to protect consumers and competition in the marketplace at a high level remains unchanged," she said. "But technology is changing the way [that] is occurring."

On that note, McSweeny said she would like to see the OTech and chief technologist more formally recognized within the agency and involved in casework as a freestanding Bureau of Technology. The FTC currently has three bureaus — Consumer Protection, Competition and Economics.

“Having experts inform the FTC’s competition and consumer protection work is not new. In the last few years, the FTC has recognized that technologists have a role there,” she said. “To me, I see it as a natural evolution of the institution. We’re starting down that path now and over time I think it would make sense.”

McSweeny joined the FTC on April 28, 2014, replacing then-Chairman Jon Leibowitz, who stepped down for private practice. For 16 months, the FTC remained at full-strength with five commissioners: McSweeny and her Democratic counterparts Julie Brill and Chairwoman Edith Ramirez, and Republicans Maureen Ohlhausen and Josh Wright.

In August of 2015, Wright stepped down from his commissioner spot to return to George Mason University Law School. His resignation left the FTC with only four commissioners — but for the first time in its 100-year history, entirely run by women.

Six months later, Brill would leave the agency, leaving just three commissioners, still all women.

When Ramirez stepped down in March 2017, the FTC was reduced to just two commissioners — McSweeny and her counterpart, now-acting Chairman Ohlhausen. The pair have kept the agency running for more than a year as President Donald Trump’s picks have slowly made their way through the Senate confirmation process. Those nominations were confirmed by the Senate Thursday evening.

McSweeny credited both her colleague, Ohlhausen, and the commission’s staff with helping the agency maintain its bipartisanship and independence during its unprecedented year-long period with just two commissioners.

“I was incredibly fortunate to have a colleague like Chairman Ohlhausen, who is very good to work with in that she’s clear about her thinking and her reasoning on issues and willing to have a conversation about them,” McSweeny said.

Those conversations were sometimes difficult to arrange, since federal law prohibits the pair from discussing agency business without officially announcing a meeting. To get around that, the FTC held several closed commission meetings to allow McSweeny and Ohlhausen to hash out compromises. McSweeny's and Ohlhausen’s staff attorneys also played a big part in helping broker agreements.

“I think we were successful at working together because our teams are excellent and were really able to find pathways forward on issues,” she said.

During their time as a two-person agency, McSweeny and Ohlhausen were mostly in sync except for two or three high-profile instances — such as approving a $4.38 billion deal between Rite-Aid and Walgreens last fall.

“My toughest decisions were frequently around when and how to compromise with my fellow commissioners. It’s important for the FTC to speak with one voice in a lot of instances [but] it can be important for differences of opinion to be aired clearly as well,” McSweeny said. “What’s hard is knowing when to really clearly and forcibly articulate a difference, and when to decide that the best outcome is to yield a bit, compromise, come up with something you can get behind but may not be 100 percent what you thought was the right outcome.”

As Congress grapples with responses to major data breaches such as Equifax and revelations that UK-based Cambridge Analytica misused Facebook user data for political ends, McSweeny said she would support giving the FTC the ability to impose fines and additional authority to issue rules on privacy and data security.

Civil penalty authority “would be helpful particularly in the privacy and data security space,” McSweeny said, noting that the FTC already has the ability to impose fines for violations of the Children’s Online Privacy Protection Act, or Coppa. “The reason I think civil penalty authority is powerful authority is it does allow an enforcement agency — which is what the FTC is primarily — to be slightly more impactful because it carries a bigger stick.”

While the FTC has limited rulemaking authority, McSweeny advocated for additional authority in the realm of data security.

“I think it would be helpful to have data security rules. We hear a lot that industry doesn’t have sufficient guidance,” she said. “We have some models for what data security rules should look like — the [Gramm-Leach-Bliley] safeguards rule, the Coppa requirements — so we know how to write those rules and I think that would be helpful.”

McSweeny said she plans to take several months off to spend time with her family before deciding on her next career move.

On Thursday evening, McSweeny’s replacement — Republican Joseph Simons, Trump’s pick to head the agency — was confirmed by the Senate. He is expected to be sworn in next week alongside Republican Commissioner Noah Phillips and Democratic Commissioners Rohit Chopra and Rebecca Slaughter. A fifth commissioner, Republican Christine Wilson, was confirmed to replace Ohlhausen once she steps down later this year.

The confirmations will mark the first time the FTC has seen a complete turnover since the agency’s first commissioners took office in 1915 — a changeover that’s likely to place a strain on the FTC as it also grapples with major investigations such as reviewing whether Facebook breached its 2011 consent decree, McSweeny said.

“There are about to be a lot of new commissioners, that’s as it should be and it’s a good thing, but it’s a big challenge to get to know everybody and bring a bunch of people up to speed quickly,” she said. “The agency has historically played a role in being independent and a bit of a ballast, good at keeping a consensus over time. It will be interesting to see if, with an entirely new group, that hallmark of the agency changes at all. I hope it doesn’t.”

Global Privacy in 2018