Keeping Pace With Tech Is A Challenge For Regulators

Regulators will always be playing catch-up with technology. Is self-regulation the answer?

By the time regulators do act to protect consumers, it’s generally more reactive than proactive.

“The pace of change is much quicker than it used to be,” Martha Coakley, the former attorney general of Massachusetts, said Wednesday at an event hosted by marketing compliance tech company PerformLine.

Coakley first took the reins as AG in 2007, the same year a massive security breach rocked Massachusetts-based global retailer TJX, parent company to T.J. Maxx, Marshalls, HomeGoods and Sierra Trading Post, among others.

Back then, “we didn’t even have data breach regulation – and that was only 10 years ago,” said Coakley, who went into private practice at law firm Foley Hoag LLP in 2015.

For the most part, the advertising industry has pushed for self-regulation, an effort supported by the current administration and the Federal Trade Commission (FTC), led by acting FTC chair Maureen Ohlhausen.

“Often the discussion in Washington goes, ‘There’s a new technology, we need a new regulation,’ [and] they cut out the middle,” Ohlhausen said in December at an International Association of Privacy Professionals event in Washington, DC, a month before she was promoted from commissioner to acting chair.

In a statement issued by the FTC in April, the commission said it would move “aggressively to implement Presidential directives” to cut down on “unnecessary” regs while seeking the “right answer for consumers.”

“We are focusing our resources where they will do the most good for the public and eliminating wasteful, legacy regulations and processes that have outlived their usefulness,” Ohlhausen said.

The FTC still isn’t operating at full capacity, with only two out of five commissioner seats filled, and an atmosphere of wait-and-see continues to prevail.

“It’s essentially business as usual,” said Brian N. Lasky, an attorney at the FTC’s Northeast Regional Office. “But we don’t know how things will ultimately shake out.”

With the FTC taking a lighter touch, the onus is on the advertising industry to regulate itself.

Coakley advised businesses to pay particular to whether their advertising and marketing practices leave them open to unwanted attention.

“Not only consumers, but your competitors will go running to the regulators to say, ‘They’re doing this and you should look into it,’” Coakley said.

When enforcement actions are taken, companies that make a genuine good faith effort to self-regulate and comply will be in a better position than those that only go through the motions.

Due diligence is a mitigating factor, Coakley said, noting that the people charged with handling compliance need to communicate and coordinate with the rest of the C-suite and marketing so that what the company says actually aligns with what the company does.

Don’t just pay “lip service,” Coakley said.

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