Speaking at a Kelley Drye event on May 3, 2017 -- 100 days into the new Trump Administration -- Maureen Ohlhausen, acting chair of the Federal Trade Commission (FTC), spoke about an issue of “federal overreach as well as good government efforts,” specifically, whether or not an act or practice constitutes a “substantial harm.”
“In both our competition and consumer protection work, I have directed our enforcement efforts on those matters that involve substantial harms,” she said.
“When government intervenes in markets on the basis of unsupported supposition, consumers can lose the benefits of free market competition,” Ohlhausen noted. “These benefits are not trivial; they include things like more jobs, economic growth, higher living standards, and innovation. So our enforcement decisions need to be well-supported by both the facts on the ground and modern economic theory. Our mission is to prevent meaningful consumer harm, not to redesign the economy as we see fit.”
While much of the FTC's consumer protection work involves stopping "obvious" harm, such as the sale of a "bogus product or service" or a company "deceptively" exaggerating the "virtues of its legitimate products" to collect "an unfair price premium that hurts consumers and disadvantages competitors,” the FTC chair suggested that the agency’s data security and privacy work “can become more complex because of the shorter time in which the legal system has had to adjust to certain side effects of generally wondrous technological and social change.”
The legal system has been dealing with traditional fraud forever, but cybersecurity and data privacy issues are a lot newer, Ohlhausen said.
The FTC chair particularly worried about the agency’s efforts to live up to the entirety of the mission statement. “People typically only quote the part of the FTC’s mission statement that talks about protecting consumers and encouraging competition. But the mission statement continues: we are to accomplish this 'without unduly burdening legitimate business activity’.” That is why, she said, the FTC is pursuing “regulatory reform through a full agency effort to streamline investigations, involve economists earlier, and prune unnecessary and outdated regulations.”