The Hill - Innovating the Federal Trade Commission for the 21st Century

News Article

By Reps. Michael C. Burgess, and Leonard Lance

New jobs and economic opportunities in the 21st Century are closely tied to innovation and technology. More innovation, using the power of data and American ingenuity, means more jobs and opportunities.

To achieve this goal, the government cannot be an obstacle. Outmoded rules and unpredictable regulations are the greatest impediments on the road to growth and innovation. 

Ironically, an agency first created to control the old industrial economy will play an increasingly important role in the new technological age -- the Federal Trade Commission (FTC). The FTC's role on questions like consumer protection, privacy, data security, competition and more are rapidly expanding. Yet many of the practices the agency uses to accomplish its goals are rooted in a paradigm over a hundred years old and created to help bust big monopoly trusts in 1914. 

It's time the agency charged with regulating the innovation economy get some innovation itself. The subcommittee recently examined over a dozen bills that seek to modernize the FTC for the 21st century and put innovation first, and this week we will vote on a number of those bills to modernize the FTC.

According to the Department of Commerce, 75 percent of economic growth in the U.S. since World War II is linked to technological innovation.

This is a stunning data point. It means we owe a lot to innovators who have risked so much to bring new products, services, and jobs to the market.


But we increasingly face global competition and our lead could unravel quickly if policymakers are careless. Rather than rest on our laurels, we can--and should--do better.


Nowhere was this more apparent than in our Disrupters Series of hearings over the past year, which presented the opportunity to understand how federal policies help or hinder the growth of emerging technologies. The committee examined the marketplace of tomorrow, and highlighted technologies and business models that are upending incumbent industries and creating jobs.

Each of the Disrupters Series technologies raises questions. Much of this inquiry at the federal level is the province of the FTC charged with interdicting "unfair" or "deceptive" acts or practices.


The FTC's ability to stop new business practices as they develop raises a separate set of difficult questions. On one hand, the FTC must be able to address new kinds of harm. Security and privacy must be accounted for. On the other, it should be careful not to stamp out new business models unless they actually do inflict harm on consumers, as opposed to presenting a threat of theoretical harm. 


The benefits that result from innovation speak for themselves--and the corresponding costs of preventing them are enormous. Consumer protection authorities must adopt an approach that refrains from snatching those benefits from consumers' hands before they can be realized. The bills our members are proposing are in the spirit of current consumer protection law, but make some perfecting adjustments to ensure that job creating innovation can continue.


In theory, the FTC's consumer protection model based on enforcement actions is ideal for a fast-moving space like tech. But if the FTC moves too far away from bringing enforcement actions with a clear analysis of identifiable harms and benefits, innovation could be thwarted.
Our legislation is pro industry, pro consumer, and pro FTC. Each bill is designed to help reduce some of the ambiguous legal liability weighing on innovators.


The FTC approach to policing evolving, tech-driven industries is on the whole appropriately flexible and strong. Edge cases in which its authority is untested, however, present tantalizing incentives to plant a flag in new territory. We seek to ensure there is a countervailing disincentive from burdening innovative practices--and that illegal activity under the FTC Act is more clearly defined.


We believe our approach will not only help the Commission be more transparent, but ensure that the incentives for innovators, consumers, and the FTC are aligned. 

We are in the midst of the innovation era, and it is important that our policies reflect the exciting realities of the 21st century.

It is especially critical that government agencies like the FTC at the forefront of job creation are encouraging jobs and innovation, not standing in the way. We must pursue policies that disrupt the FTC's entrenched ways to help modernize this important agency for the 21st century.

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