(Bloomberg) -- The Federal Trade Commission’s decision to tackle online privacy opens a new area of conflict for Chair Lina Khan, bringing the agency under fresh fire from conservatives who argue that Congress is better-suited to draft data-security rules.
The rift is already evident within the FTC itself, where both Republican commissioners voted no and issued dissents, citing concerns the agency’s efforts would undermine pending privacy legislation.
Khan, who was brought in by the Biden administration to reinvigorate antitrust enforcement, has drawn criticism from some Republicans and business groups for what they see as her aggressive agenda for the agency, which also has a consumer protection mandate.
Khan’s opponents, including the US Chamber of Commerce, which has sued the FTC over what it calls a lack of transparency, immediately called into question the agency’s authority to issue rules -- signaling another court battle could be coming.
Unlike Europe, the US doesn’t have a comprehensive law regulating consumer privacy, though several states have passed their own measures. Congress has struggled for more than a decade to pass a federal law. While one bill has advanced in the House with significant bipartisan support, its fate remains uncertain.
“Case by case enforcement may fail to deter lawbreaking or remedy the resulting harm,” Khan said during a press conference Thursday. “Our goal at this stage is really to begin building a rich public record to inform our assessment of whether a rulemaking is worthwhile.”
The agency asked for public comments to help it determine whether rules are needed to limit how companies sell or share information collected about people online. That marks the first step in a process to draft regulations for what it called “commercial surveillance,” which experts said could take nearly a decade to finish.
“I don’t think we should do this,” GOP Commissioner Noah Phillips wrote in his dissent. “I have said, repeatedly, that Congress -- not the Federal Trade Commission -- is where national privacy law should be enacted.”
Republican Commissioner Christine Wilson, who previously said she was open to an FTC privacy rulemaking, said a “significant” reason for her vote against the initiative was her concern that the FTC proceeding could erode support for the pending privacy legislation, known as the American Data Privacy and Protection Act. That bill has support from GOP senators and bipartisan backing in the House Energy and Commerce Committee, where it advanced 53-2 in June.
The concerns of Wilson and Phillips, who plans to step down later this year, were quickly echoed by congressional Republicans.
Privacy protections “should be achieved by the American people speaking through their elected representatives and not through executive action,” said Representative Cathy McMorris Rodgers, the top Republican on Energy and Commerce and a supporter of the current privacy legislation. The pending bill “continues to be the best path forward.”
Unlike executive branch agencies, the FTC, which is an independent agency, must follow a longer, more complicated procedure that includes several rounds of public comments and hearings to make rules. The first step involves asking questions about potentially unfair or deceptive business practices and how common they are.
“We can’t just issue a rule,” said Samuel Levine, the director of the agency’s Bureau of Consumer Protection. “We won’t make a decision on whether to issue a rule until we have a chance to hear from” the public and affected companies.
Democratic Commissioner Rebecca Kelly Slaughter, who first pushed for the FTC to issue privacy rules two years ago, said the rulemaking is “complimentary” to the congressional action.
“Until a law is on the books, the FTC has a duty to use all our tools,” she said. “We are asking questions and will follow the record.”
Democratic FTC Commissioner Alvaro Bedoya, a privacy expert who helped draft the questions for public comment, rejected calls for the agency to forgo its own privacy efforts because of Congress.
“This process is not going to interfere with that effort,” Bedoya told reporters.
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