There are many predictions of what the Federal Trade Commission’s priorities will be under its new Republican chairman, Andrew Ferguson.
The prevailing point of view is that Ferguson will take a far more business-friendly approach than his predecessor, Lina Khan.
In September, for example, a few months before then President-elect Trump announced Ferguson (still a commissioner at the time) as his pick for FTC chair, Ferguson delivered a speech entitled “Staying in Our Lane: Resisting the Temptation of Using Consumer Protection Law to Solve Other Problems.”
Enough said.
But being business friendly isn’t necessarily a synonym for being indifferent to consumer protection. Far from it.
“It’s not as if all bets are off,” says Kyle Kessler, a partner at Womble Bond Dickinson in the firm’s privacy and cybersecurity group.
“He’s not just going to put his feet up on the desk and be like, ‘Congress, do your thing. I’m taking a nap,’” Kessler says.
So what’s in the tea leaves for the FTC as Ferguson, who took over as chairman in January, settles into his new role? Kessler helped me catch the vibes.
AdExchanger: The consensus is that we’ll see less privacy enforcement by the FTC under Ferguson. Will there be any exceptions?
KYLE KESSLER: I think we’ll still see enforcement actions related to children’s data and the ad tech space, including at least some focus on location data, especially in relation to child-focused apps and gaming apps.
I’d say everything else is pretty much off the table.
On January 16, the FTC finally issued its final rule amending the regulations for implementing the Children’s Online Privacy Protection Act. The rule was last updated in 2013! A few days later, President Trump issued an executive order pausing all federal rulemaking activity until a Trump appointee could review and approve each rule. What effect will that have on the new COPPA rule, which hasn’t been published to the Federal Register yet?
The biggest challenge with the new administration is how rapid the changes have been. My clients feel like they can’t keep up. It’s hard to know what to worry about and what to pay attention to.
But with something like COPPA, you can’t just take a wait-and-see-approach. You have to move forward with the understanding that it’s going through. And even if it doesn’t, many of the changes a business would make to comply at the very least brings it closer to a privacy-by-design approach.
What does Trump’s executive order mean for the FTC’s Advanced Notice of Proposed Rulemaking on commercial surveillance and data security, which was issued under then-chair Khan in 2022. Is it dead in the water?
It’s such a good question. There was so much time spent on that under the previous administration. But the new administration has basically frozen the entire system, and unless they decide to pick it up and move forward in a similar or modified manner and continue the process, which is unlikely, then yes, I think it may be dead.
Earlier this year, I heard Republican FTC Commissioner Melissa Holyoak speak at a conference, and she decried the FTC’s aggressive stance on consumer protection and the use of incendiary language, notably “surveillance.” Will that type of terminology fall out of favor now?
I think so. That word is probably gone. And we likely won’t see as many studies and no more rulemaking. The only enforcement we’ll see are things that further the administration’s agenda. Not to be a cynic.
To be fair, though, isn’t that pretty much the case anytime there’s an administration change?
That’s right. Although it really will be interesting to see where this FTC brings its enforcement actions when it does, because there will be fewer of them than we saw under Lina Khan.
It was a very active three years under Lina Khan. How much of her legacy will be undone and what will live on?
If the question is, “Do I think there’s going to be a complete revamp of the FTC?” the answer is, “I don’t think so.” The previous FTC did a lot, especially regarding sensitive data as an umbrella term with a focus on location data and children’s data, and I believe that will continue.
Putting aside whether you agree or disagree, the previous FTC did test the boundaries of its powers to create a path for regulation, including with its interpretation of Section 5 of the FTC Act. That won’t be happening anymore.
Ferguson is definitely more friendly to Big Tech, but that doesn’t mean this FTC won’t bring enforcement actions, and we could see that happen in the ad tech industry in particular, where it’s often easier to see when companies are pushing the limits in terms of data collection.
Any free legal advice you can share for ad tech companies?
Go back to basics and work within a notice and choice regime, especially when it comes to the collection and use of sensitive data. That’s the safest way to move forward, because it’s almost administration proof.
No matter what happens during this crazy administration, if you fully embrace the basics, you’re probably going to be okay.
Answers have been lightly edited and condensed.
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