We extend a special welcome to our witnesses and thank them for appearing. Remotely all appear this morning. Commissioner noah phillips, commissioner Christine Wilson and rebecca slaughter. This agency was established in 1914 by the federal trade commission act. The fcc is chiefly responsible for protecting consumers from unfair, fraudulent Business Practices in the marketplace, including protecting Consumer Privacy and the security of their data, preventing harmful uses of technology and combating deceptive advertising and illegal robo calls, among other issues. The fcc is also responsible for educating consumers about fraudulent activity and theatory business practice fcc is intended to help prevent americans from falling victim to frauds fraudsters and other actors. Recently discussed, the subcommittee hearing on covid19 scams last month, coronavirus becauseted a new avenue of stayathome orders, a prime target for exploitation. I appreciate the ongoing efforts to protect consumers from Identity Theft, and other online date online data during this crisis. It is an opportunity to discuss what more can be done to deal with deceptive and unfair commercial practices. Fcc begins by ensuring the has the Proper Authority and resources at its disposal to carry out the broad statutory mandate. The authority under the u. S. Safe web app web act with Law Enforcement agencies to combat international crimes. This has provided critical, crossborder enforcement tools to the fcc to take swift action such as internet pyramid schemes and data theft. The reauthorization of the act was favorably reported in the committee in march, and we will have a finalized committee report. Once this is completed, i errored urge congress to reauthorize quickly before it expires next month. There have been challenges to the scope of the fcc authority ftc act, under the which the Supreme Court plans to address in its next term. Has requiredn scant scammers to give money back to those they fronted. Statute toard the empower the fcc not only to behaviorjoin improper but also to compensate victims for their losses. Protects ability to privacy and security of data is also essential. I hope we can all agree the pandemic further underscores the need for Strong National data i was the legislation. Law would provide all citizens with more transparency choice and control and would provide certainty and clear and workable rules for businesses across all 50 states. I hope commissioners will discuss the scope to protect privacy and security of personal data and outline additional tools that are needed to safeguard from misuse and authorized access. I am sure commissioners want to discuss the potential impact of the recently invalidated eu u. S. Aield framework, provided method for companies to transfer ina back and forth compliance with eu Data Protection requirements and in support of transatlantic commerce. The ftc has played a Critical Role in employing clients with the Privacy Shield as was the status in 2016. This hearing was an opportunity to review how the ftc is working with the department of commerce to develop interim guidance for thousands of u. S. Companies, including many small and mediumsized businesses impacted by this recent decision. Some policymakers are proposing the ftc take a more active role in unfair and with issuesactices ranging from section 23 on the Communications Decency act, to compensating collegiate athletes for the use of their name, image, or likeness. I look forward to hearing more about the ftcs authority and expertise to address these matters, as well as whether it has sufficient tools to protect consumers engaging in these commercial activities. Clearly, with the ftc, there is much to discuss. I thank the commissioners again for their testimonies. I will now turn to my friend and the Ranking Member for her opening remarks. Senator cantwell. Sen. Cantwell. For coming today as we invite people to talk having onimpact it is the economy and the health care system. My view is simple. You should be doing everything in your power to help americans during this time of crisis. Is of extreme importance and our nation continues to reopen one of the worst Health Emergencies and biggest economic crisis sees crises we have ever faced. We have seen that the covid19 pandemic has attracted data actors and scam artists, including those who take advantage of peoples fear and the dire circumstances. I am sure every member of the committee has heard from constituents on the issues, about buying ineffective facemasks, or being subject to ing attacks or coronavirus cures that are miracles. People have bought prep goods for their family and just like the spread of covid19, these are happening those in every part of the state. There was a recent story about seven dollar50 for sanitizer. Price gouging continues to dial up. These scams are happening everywhere, impacting Rural Communities and hurting americans young and old. People have been scammed out of over 2. 5 Million Dollars since the pandemic began, and more than 3500 reports of fraud. While many attorney generals have gone after these profiteers, i believe the ftc is holding back and you could be doing more. We must move beyond warnings and threats in response to these unconscionable scams. Must see the ftc act of having real enforcement and real consequences to protect consumers and families when they are most vulnerable. Cleareve the ftc needs price gouging legislation to go after these scammers. We must not allow them to exchange exorbitant prices, sometimes for lifesaving supplies like personal or medical equipment simply because their families are desperate. On the front lines of the isdemic, i can tell you, it not a good thing to get calls from emergency room doctors who are saying they are getting price gouged on essential equipment when they are on the front lines of the pandemic. We need to make it clear it is illegal to peddle it noneffective masks and we need to empower state attorney generals to go after bad actors , souttress the argument this is especially true, given our crisis today. Internet platforms should also be working with federal and local Law Enforcement to identify price gouging. I plan to introduce in the coming days federal legislation to move both on price gouging, definition, to make sure the law is clear, and to enforce Civil Penalties for deceptive covid scams. Onis time for us to act important pieces of legislation and to protect our consumers from these very important issues during a time of crisis. People need help and support, not deception and schemes, and we need a more aggressive ftc. Thank you. Wicker we look forward to seeing the legislation, once you get it introduced. To testimony, summaries of testimony, from our witnesses, and written testimony has been submitted, and admitted into the record in full at this point. We ask each member of the commission to summarize testimony, in five minutes if possible. We began with the honorable joseph j simons, who joins us remotely along with the other members. You are recognized. Thank you so much chairman wicker, Ranking Member cantwell, and members of the committee, it is an honor to be with you today, especially alongside my fellow commissioners. Despite the challenges presented by the pandemic, the ftc has remained open, active, and aggressive. We have used every tool in our arsenal on covidrelated initiatives, while simultaneously handling our everyday efforts to protect consumers privacy and Data Security, stop fraud, ensure that advertising claims are truthful and not misleading, and combat illegal robocalls. Andwhat is truly extraordinarycommission staff has accomplished this while quickly transitioning from nearly 100 officebased work to nearly 100 telework. I want to take a moment to focus on one of my Top Priorities privacy and Data Security. Our enforcement in these areasincluding cases against facebook, google and youtube, and equifaxhas been highly successful within the limits of our authority. But, as i have said before, section 57 is a 100yearold statute that is an imperfect tool for this purpose. I believe we need more authority, which is why i urge you to continue your hard work to enact privacy and Data Security legislation that would be enforced by the ftc. As policymakers, it is appropriate for you to make the difficult valuebased decisions underlying new privacy protections. From an enforcement perspective, i ask that the legislation give us 1 the ability to seek Civil Penalties, 2 jurisdiction over nonprofits and common carriers, and 3 targeted administrative procedure act apa Rulemaking Authority to ensure the law keeps pace with changes in technology and the market. This is similar to the approach Congress Took under the childrens Online Privacy protection act coppa . We will continue to vigorously enforce existing privacy statutes, and we will use our extensive expertise and experience to enforce aggressively any new privacy or Data Security laws that you pass. We also need your help to clarify our authority under section 13 b of the ftc act,10 which is our principal means of getting money back for consumers. Using this authority as it has been interpreted for decades, the ftc has returned over 10 billion to consumers in just the last four years. Recent court decisions, however, threaten this essential authority, and this issue is now before the Supreme Court. I strongly urge you to clarify the law. I want to thank the committee for advancing legislation to reauthorize the u. S. Safe web actan indispensable tool in combatting crossborder fraud. However, without further congressional action, safe web will sunset on september 30. I would like your continued support in pushing this effort across the goal line, and keeping safe web in our enforcement arsenal. Though i am asking for more help, please know how grateful i am for what you already have done on these issues. I am also very thankful for the Financial Support congress has given the ftc this year. The 20 million increase averted fulltime employee reductions, and instead allows us to hire more people for some of our most critical work. I also want to mention the recent European Union eu ruling on the euu. S. Privacy shield and note that we are studying its effects. We stand ready to support the administrations efforts in this area, but at the same time we will continue to hold Companies Accountable for their privacy commitments, including promises made under the Privacy Shield. I will end by briefly highlighting our antitrust enforcement. We are on pace for the highest number of merger Enforcement Actions in 20 years since fy 2000 . We have brought four monopolization cases in the last two years. Last year we formed the Technology Enforcement division ted , which is currently pursuing a number of very significant investigations involving big tech platforms, and we have used our study authority to issue special orders to alphabet, amazon, apple, facebook, and microsoft requiring them to provide information about prior acquisitions not reported under the hsr act. We are committed to using every resource to effectively protect consumers and promote competition. We look forward to continuing to work with you, and i would be happy to answer your questions. You now we thank turn to commissioner noah phillips. Phillips thank you. I am honored to be with you today to testify about the important work we do with the ftc. You for yournk flexibility on format. It is always good to be back even if it means virtually. There is a lot to cover and i look forward to our discussion but i want to highlight an important issue, which i know is important to you, Data Security. Hardly a week goes by without americans worrying about another cyberattack or one ability. Revealed, researchers vulnerability on devices running windows, which could impact billions of devices. Consumers get this. Its 2018 study showed Identity Theft is the number one privacy and security issue concerning americans. Considering the harms americans have in mind when they think about private, Data Security legislation is one of the best things we can all do for privacy. The endemic use of data in our economy is not going away and it waysrts not only the new [no audio] commissioner, your video froze for a moment, so we want technicalre these we want to make sure we can iron out technical difficulties and that you can resume. We will just pause for a moment and have the advice of our technical experts. Can you hear me . We can. Connection issue. If you can backup a sentence or two, we will hear you. We do not see you. My apologies. Attacks areority of thwarted. In 2019, there were still many data breaches in the u. S. , exposing 160 million records. The loss, corruption, of these data, can pose serious harm, including identity and ip theft, exposure of Sensitive Data, years of litigation, and so on. A attic Data Security is profound National Security issue. We investigate and bring actions against companies that failed to maintain reasonable Data Security or mislead consumers about it. Recent examples include our enforcement against an auto Dealer Management Software and an app that raised profound privacy problems. Bureauifax, the credit neglected to fix, resulting in the theft of records of over 145 million americans. We are imposing new firemens for Data Security orders, like certification and a better thirdparty process. Statutes give us Data Security authorities, and heightened sensitivity, but the regime today has gaps, including areas of particular vulnerability. Consider the internet of things. The proliferation of connected devices is good for consumers. It creates risks. The manufactured 16 million device may not have angst to secure it. We grapple with the issue in 2017 against a wifi router, and just a few months ago in our maker of awith the smartwatch. The department of homeland ,ecurity and cybersecurity which builds up cybersecurity and partnership with public and private entities, is also active on iot. He regularly consult with visa and refer to them as a resource in consumer Business Education. We view use of their tools, such as those that help victims identify risk favorably in our security investigation. I think we have to go further and encourage participation through mechanisms like integrating their work into hours. Today, i want to stress the importance of the commissions call. We need to be flexible to deal with Rapid Technological Development and mindful of the fact that many are often themselves the victims of felony. Specific congressional mandate and incentives are critical to protect data. As reported just days ago, many Large Companies have vulnerabilities. Most could address Security Problems often fail to do so. Data privacy is something on which many of you have been working hard. It is an important part of our mission. Security legislation is i think one of the best things we can do. [no audio] sen. Wicker just so you know, on the sentence on data privacy, that is when your video froze up, mr. Commissioner. Perhaps we can iron that out. Can you hear us now, sir . I believe the chairman is addressing you. Forgive me. I did not hear the question. Sen. Wicker you are in the middle of a sentence about data privacy and your screen froze up again. . F you could restart there briefly, the legislation is one of the most important things you can do. Sen. Wicker very good. If you will just appreciate finish her statement, we will appreciate it. Thank you. I will submit a copy for the record of course. Sen. Wicker all right. Do you have more of the written statement of your verbal statement that you would like to complete . Why dont we just go ahead into the next witness, because we have these difficulties. We thank you, commissioner throat commissioner phillips. Thank you. Chairman wicker, Ranking Member cantwell, and members of the committee, thank you for the opportunity to appear before you. The federal trade commissions responsibilities are wide and farreaching, with many directly relating to the crisis we face. Health care and pharmaceuticals, disinformation and fake reviews, abuse and misuse of data, and so much more. But, there is one area in particular that the ftc can and should prioritize protecting americas Small Businesses. According to a survey by the society of Human Resource management, 52 percent of Small Businesses believe that they are likely to fail due to the effects of covid19. If this comes true, millions of businesses and many more millions who work for them could lose their livelihoods, devastating local economies in the process. The ftc has an Important Role to play to protect Small Businesses from abuse. First, we must crack down on Small Business loan sharking. Many Small Businesses are struggling to access credit, including through the paycheck protection program. This is giving an opening to bad actors that target restaurants, stores, and other local businesses with predatory loans. These lenders provide funds to businesses in exchange for future credit card receipts, but the terms often set the Small Businesses up to fail. In these contracts, Small Businesses must agree to confessions of judgment, where borrowers automatically plead guilty if the lender sues them for payment. These clauses are illegal in consumer contracts, but are being unfairly weaponized against Small Businesses. The ftc is the only federal agency with authority to crack down on these nonbank Small Business lending practices. We have taken some important actions, and we must systemically eliminate these illegal practices before its too late. Second, the ftc must safeguard operators of franchised businesses from abusive practices by franchisors. Franchised businesses encompass a broad swath of businesses across the economy, from auto repair to real estate to Fitness Centers to fast food and more. Operators of franchised 2 businesses employ americans across the country, and theyre also more likely to be minorityowned, compared to other Small Businesses. However, there are signs that franchisors may be using the pandemic to impose new policies that are exacting more economic pain on franchise operators. For example, subway and 7eleven franchisees are fighting back against attempts by franchisors to gain more control and implement practices that shift more cost and risk to local business owners. The ftc administers the franchise rule and enforces laws that prohibit unfair Business Practices by franchisors. This responsibility is critical, given the threats faced by operators of franchised businesses today. Finally, the ftc will need to police markets for anticompetitive mergers that scoop up scores of Small Businesses. One common Acquisition Strategy is called a roll up. This is when a buyer, often a private equity fund, acquires a substantial number of small players in a market and combines them into a single large firm. For example, many independent medical practitioners are seriously struggling, and many believe they will need to sell their practices to an Investment Fund or a hospital system, due to the dire economic straits they face. The slow extinction of independent physician practices, in particular, may have a serious impact on cost and quality of care. Many of these deals are not subject to merger reporting, because theyre relatively small. However, when buyers are acquiring sometimes dozens or even hundreds of these Small Businesses, this kills competition and can make it more difficult for new players to enter the market. The ftc will need to use its authority to halt anticompetitive acquisition sprees and monopolization schemes that stamp out competition and small players. In closing, we face unusual and extraordinary times for our economy, and the ftc will need to sharpen its focus on the impact of the pandemic on Small Businesses. Thank you for again for the opportunity and i look forward to your questions. Sen. Wicker thank you. Thank you. This is my new baby, two months old. Americans, i am home with my kids, so she is with me today. Sen. Wicker she seems very relaxed about your positions on the issues. Hopefully. Her name is in the committee record. Very proud. Be let me start over so i can address the committee. Thank you for having us here today. Like most americans and yourselves, for me fallout from the coronavirus is front of mind these days, so i am going to confine my oral remarks to that topic. I worry most about the burden borne by three groups in particular kids, workers, and patients. As a parent who has been struggling to manage Distance Learning for her kids, even with the best circumstances and resources, i am especially sensitive to education issues. The pandemic has exacerbated the existing deep disparity in Educational Equity in this country. From day one, we saw wellresourced schools transition relatively seamlessly to online models with continued learning. Families with access to broadband and devices, and the flexibility for a parent to be available at home, muddled through. But for millions of americas kids from vulnerable communities, school simply stopped. As many as one in six kids lack the equipment necessary to participate in Distance Learning, and nearly one quarter of kids lack reliable internet accessconditions that particularly affect rural, urban, and lowincome families. The Solutions Parents and School Districts are considering pose increased risks of privacy harms to kids, particularly kids in communities already battling the equity gap; we need to acknowledge that privacy and data issues are also equity and civil rights issues. Hybrid and inperson learning models will require unprecedented collection of personal data to facilitate Contact Tracing, quarantines, and family choices. Online learning demands rapid adoption of a suite of technologies that may often be unvetted and used without supervision. Where wealthy childrens families can pay for privacyprotective services, poor kids may pay by sacrificing their privacy. The ftc should help mitigate these potential harms. I was glad that the agency worked quickly to put out guidance on how to protect student privacy. The ftc must aggressively use coppa and general section 5 authority to hold Companies Accountable if the Solutions Offered to fill the education gap violate current law. But i want to be realistic about the bestcase scenario many families face for the current Academic Year shared devices, hastily filled with emerging apps and platforms, being used by kids for hours with little oversight by adults. Current law provides very little protection in these circumstances, particularly for applications targeting teenagers or general audiences. The need for comprehensive dataprivacy legislation with meaningful limitations on the collection and use of data and prohibitions on discriminatory practices, dark patterns, and data abuses has never been greater. The ftc stands ready to enforce a federal privacy law, and my hope is that the pandemics catastrophic consequences for children will serve as the final push for such legislation. Until then, i believe the mounting data harms emerging from the crisis demand that the Commission Consider initiating a rulemaking under magnusonmoss to identify and address serious data abuses. In addition to supporting kids, we must support workers. As a parent with four young kids at home, i am fortunate to navigate the challenges of childcare and Online Learning from the privileged position of employment. At least 11 of my fellow americans do not share that good fortune. I echo commissioner chopras calls for the ftc to focus on supporting Small Businesses, which are a significant source of employment and may be particularly squeezed right now. I believe the ftc must also use its Competition Authority to better protect our workforce by sharpening our attention on anticompetitive conduct and mergers that harm workers. Employers ought to compete to attract workers by providing the highest wages, most attractive benefits, and, especially today, the most Robust Health and safety measures. We should focus on these issues in our Enforcement Actions and also consider whether and how our Rulemaking Authority might be applied to address them. The most fundamental challenge we all face, of course, is how to help overcome the deadly publichealth crisis, which we know has an outsized impact on seniors and communities of color. The ftc must continue to protect access to care by challenging problematic hospital and healthcareprovider mergers that increase prices and limit patient choice. We must vigorously apply scrutiny to pharmaceutical mergers as well as address anticompetitive conduct involving healthcare services. We also must seek creative ways to challenge pricegouging. Creativity is no substitute, however, for clear authority, and i would ask congress to give the ftc a direct mandate to stamp out abusive pricing practices. In closing, i want to acknowledge the dedicated Public Servants at the agency who have been working through this crisis in incredibly challenging circumstances. Working from home, especially for parents of young kids, is harder than i could have imagined. Chairman simons deserves great credit for providing unmatched flexibility for staff across the agency to ensure they and their families remain safe, and the staff deserve equal credit for their tenacity, resilience, and unwavering commitment to the important work of the commission. I look forward to answering your questions. Sen. Wicker thank you, commissioner. It is indeed ironic that just as you were speaking about online lost yourearning, we video, though we could hear you on the screen. A text was saying that we lost the picture because of low bandwidth. I apologize. No, i think it points out the problems we have. If a member of the federal trade commission has problems with distance testimony, you can imagine what those students who are trying to do Distance Learning are experiencing. Howdy tell you that hattie has a beautiful head of hair and was well behaved. So thank you for that testimony and now we turn to commissioner wilson. You are recognized. Thank you. Chairman wicker, Ranking Member cantwell, and members of the committee, i am pleased to appear before you today albeit remotely . I would like to highlight two areas where i respectfully believe that congress could assist the federal trade commission in fulfilling its mission to protect consumers and competition first, by enacting federal privacy legislation; and second, by maintaining the focus on consumer welfare and economicsdriven enforcement in antitrust. With respect to privacy legislation, i agree with chairman simons Opening Statement on this topic. Federal privacy legislation is necessary for several reasons. First, businesses need predictability in the face of a growing patchwork of state and International Privacy regimes. Second, consumers need clarity regarding how their data is collected, used, and shared so they can make informed decisions about which goods and services to use. Third, there are growing gaps in the sectoral coverage of our existing privacy laws. For example, hipa covers the privacy of health Data Collected by a doctor but not by apps. The need is more urgent now given covid19. For millions of americans work and school have moved online. Consumer data is being deployed to monitor compliance with quarantines and for Contact Tracing while many View Technology as key to safely easing quarantines and resuming normal life these tools depend on Sensitive Health and location data. We now face many new and complex privacy issues. Interestingly effective Contact Tracing requires widespread adoption, but Digital Trust is lacking. A the Washington Post poll found that half of smart phone users who could use Contact Tracing apps wont because they dont trust text companies. Privacy legislation would help build Digital Trust which is necessary to help foster continued innovation and investment. Privacy legislation is also necessary to protect our Fourth Amendment rights. Consumers surrender Sensitive Data through their use of phones and other connected devices. If citizens know and accept that nothing is private then they have no reasonable expectation of privacy and Fourth Amendment protections evaporate. While privacy is important so is competition. Privacy ledgeilation must be crafted so as to maintain competition and foster innovation. Research indicates the passage of gdpr in the eu led to decreased Venture Capital investment and entrenchment of dominant players in advertising. Compliance is costly for Small Businesses and new entrants. U. S. Legislations should seek to avoid these pit falls. With our dual mission in Consumer Protection the ftc is well situated to provide Technical Assistance to congress on this issue. Four other considerations for legislation. First the ftc should be the enforcing agency given its decades of experience. Second, like kapa, legislation should include civil monetary penalties. Third it could have jurisdiction over nonprivate incoming carriers which collects sensitive information. Finally, targeted rule making would allow them to assess technological development. The consumer welfare standard in antitrust which measures the impact of competitive conduct on consumers is under attack. The consumer welfare standard also addresses other important factors like quality and innovation. If people wanted only the cheapest products we would still use flip phones instead of smart phones. But price does matter. Antitrust scholar herbert campus written attack low prices as essential aept trustntitrust goals is going to hurt consumers the most. Some conduct can drive up prices without increasing quality or innovation, but most of the building practices and mergers we review require closer scrutiny. Economic analysis helps us determine whether any harm to competition is outweighed by benefits to consumers. Without Economic Analysis antitrust at best would be a series of rules at worst antitrust untethered from Economic Analysis would be subjective and vulnerable to political manipulations. Companies would seek the favor of legislators and regulators instead of courting consumers. Im happy to answer any questions you may have. Well, thank you very much. Another thing i wanted to mention after the testimony of Rebecca Kelly slaughter was to thank her for pointing out what a wonderful job the staff of the ftc does, and im sure each member of the commission subscribes to that. We certainly, senator cantwell can say the same for our hardworking and talented and knowledge staff here in the committee on both sides of the dias, and that gives me a chance to say that. Lets start off, and i guess well begin with the chair, so chairman simons, lets talk about the ftcs role and in particular president trumps executive order in may in preventing online censorship. Specifically section 4 of this order calls on the ftc to take action against Online Platforms that restrict speech in a manner inconsistent with their terms of service. What is your view, mr. Chairman, on the ftcs responsibilities under the executive order . And have you seen any examples of the behavior described in the order and taken any action under your authority so far . Thank you, mr. Chairman. We havent taken any action according to the executive order. We get complaints from a wide variety of sources from the public, from congress, from competitors, from people in industry, from consumer watchdogs and its very important we get those complaints and we Pay Attention to them. Lots of complaints come from members of this committee, and were very thankful you provide us with such thoughtful complaints. Were an independent agency so we review all of them independently. We have jurisdiction over commercial speech, nondeceptive and unfair. And then some other statutes. So we look to see whether the complaints are subject to unfairness im sorry whether theyre within our authority as i described. And our authority focuses on commercial speech not political content curation. If we see complaints that are not within our jurisdiction then we dont do anything. If we see complaints that are then we take a closer look and figure out if theres a violation and then we determine whether its appropriate for us to act. So, mr. Chairman, you dont view political speech as within your jurisdiction . Correct. And so if the public and members of the senate are concerned about Online Platforms like twitter and facebook being inconsistent in the way they restrict political speech you do not view that as within the purview of your statutory responsibilities, and therefore the executive order does not instruct you in that specific area. Is that correct . Yes, for political content curation, yes. Okay, now, who else would like to comment on this . Im going to take my whole five minutes on this. Chairman wicker, im happy to weigh in. I think putting aside the executive order the issue of section 230 is one whereof great concern i think, and theres a growing bipartisan consensus that it has been abused. We see whether it comes to counterfeit and defective goods, an unlevel Playing Field between Online Platforms and brick and mortar stores. And in general i think the scrutiny is warranted when it comes to Technology Platforms abusing any liabilities and public privileges and using that as regulatory arbitrage. I think many of these platforms do have too much power to dictate certain policies and regulations, and i dont want to see them continue in my view to overuse and abuse the legal immunities that congress has provided. And i think we need to take a hard look at that particularly when it comes to the use of surveillance based behavioral advertising. I think that Business Model is inconsistent with the origins of section 230. Section 230 as supposed to safeguard and promote speech. Its not supposed to, you know, prioritize certain types of things over the others based on what makes those companies more money. You know, commissioner, i think you make some very good points there. And i would observe that the hearing in the house of representatives last week on a bipartisan basis indicated a real concern that these platforms are awfully big and too powerful, and that it is a matter of concern for the consuming public. So i appreciate your testimony there. I also have a comment, senator wicker. You noted that this was a bipartisan issue in last weeks hearing, and i actually have chairman nadlers quotes in front of me. He asked was the ability to make money in any way affect googles aggurhythm in terms of what news appears in a users typical search results. He noted now we hear google and facebook are making money over what news they let the American People see. He said it is a very dangerous situation. And so i agree social Media Companies now provide a significant portion of america with its news. And so there is concern about content curation. My colleague, commissioner chopra and i have previously asked the ftc in a Public Statement to prioritize 60 studies that explore how content curation and targeted advertising practices impact data collection, use and sharing and how the monetization of data impacts the creation and refinement of algorithms that drive content curation and targeted advertising practices. So i think this issue as my colleague commissioner chopra noted is a really important one for us to consider and learn more about. And have those studies been authorized and commenced at this point . Nothing has been publicly announced, senator. Senator . Yes . I hear a voice. Perhaps youre being censored at this point. Let me say this will be a further topic of questions, and ill not further intrude on my time at this point but recognize the distinguished Ranking Member. Well get back to you for an answer once we get these kinks ironed out. Senator cantwell . Thank you, mr. Chairman, and for holding this important hearing and all the feedback from the commissioners. Id like to go back to price gouging. In april in the state of washington the attorney general launched a see it, snap it, send it campaign to fight price gouging. The initiative followed 400 price gouging related to complaints around cease and desist letters to washington based Online Sellers accused of price gouging in upwards of 150 site visits to businesses that were subjects of these complaints. So this is a very important and timely issue as it relates to the crisis, and we want to make sure that americans are getting all the help that they deserve. Currently the federal agencies have very limited authority to prevent price gouging. The ftc as the chair was just mentioning go after unfair and deceptive practices which really hasnt been used in cases of price gouging. So that is why i believe we need a new definition particularly during a time of an emergency. During a time of an emergency you should not allow for these unconscionably excessive prices, and i think we should do something about that. So i wanted to ask you chairman simons, do you support congress doing something specifically on price gouging authority . Senator, we agree that price gouging is a very serious problem especially for ppe and the like. We currently work with the doj and the states to refer cases to them because as really not a good fit for price gouging authority, but we would vigorously support and enforce legislation if Congress Passed a law on price gouging. We think that legislation should include a triggering event and a time limit. It should be national in scope. It should define the products that are covered. Describe what constitutes an excessive price increase, and provide carveouts for offsetting cost increases. Thank you. Thank you for that list. I agree. And i think particularly when you define a crisis, we have certainly been involved in what we think have been manipulations of oil markets and certainly people who took advantage of oil prices during a hurricane and certainly been involved in electricity rates and what we thought were manipulated electricity markets. So anyway, look forward to working with you on that. Commissioner slaughter and chopra, thank you, commissioner, for mentioning well, first of all, enlightening our day. Enlightening our day. Thank you. But also, for mentioning broadband, and i know the chairman agrees that we have an important opportunity in front of us with the next covid package as were seeing schools make decisions about what theyre going to do on the Education System for the fall, we really have to address this gap, and we need to make sure that the dollars are there and the specific programs are there for broadband. So we look forward to working with everybody to make sure that gets in a package. But on this issue of price gouging, commissioner slaughter, you also mentioned, and commissioner chopra, what is your perspective about the core provision of a price gouging law . We heard from the chairman, but what do you believe needs to be in the legislation . Thank you, senator, for the question. And youre right about broad band. You can see with all of us struggling with our feeds occasionally, we can see how important it is. In terms of price gouging, i agree with a lot of what the chairman said in terms of what the parameters of price gouging legislation would look like. I would want to make sure it wasnt too limited and didnt put too high a burden on the agencies to establish that the circumstances have been met, because when thats the case, then we cant really bring the cases effectively that we want to to protect the public, and the last point i would make is i agree also that section 5 is very much an imperfect tool for addressing these kinds of problems. But i want to see us in all cases including in the case of price gouging or maybe especially, thinking about whether particular circumstances might give rise to a creative use of section 5 authority in this on this topic, and this is something commissioner chopra and i both talked about in terms of drug price spikes recently. I think we would really benefit from clear legislation from congress, but very much share your view that this is a high priority and something that we can see the real life effects of for American People every day. Thank you. Commissioner chopra, did you thank you. I agree. Just two quick points. I do not want to see any federal law delete the state laws, the preemption of state laws i dont think is appropriate when it comes to this issue, and i also hope given some of the framework in the defense production act as well, that you also consider criminal penalties in certain circumstances. Yeah, i certainly believe we have done Effective Work on this as it relates to Energy Markets and having criminal penalties has been given the ftc i mean the federal Energy Regulatory commission the tool they needed to police Energy Markets. We dont need Higher Energy costs than we should be paying, and i know my time is expired but i want to mention on commissioner wilsons point about content curation, this is really a very severe problem that is undermining the newspaper industry. The fact that these content creators are basically becoming the entry point of delivery is limiting the options for our broadcast and content deliverers in the newspaper business, so i look forward to seeing what the commission comes out with on this, but i think this is also a very important issue that needs to be addressed. Thank you. Thank you very, very much. Senator cantwell. Senator fisher is next. Thank you, mr. Chairman. Chairman simons, as im sure you know, this committee has been evaluating a path forward on the name, image, likeness rules that have begun to take shape at the state level along with the proposal recently developed by the ncaa. Im interested to hear your perspective on this matter, particularly on the ftcs role in importing any new federal nia rules. As talks continue on a potential framework, what new authorities and resources do you believe the commission may or may not need to enforce added protections for student athletes . I think you have to unmute, sir. There you go. Can you hear me . Yes. Thanks for the question. I think i was unmuted and by mistake muted. Sorry for that. I am a big believer that competition should function in almost every situation including college athletics. I have been very concerned for a long period of time that students are not getting what they should get in terms of compensation for what they do. This is particularly serious because it has a large effect on minority disadvantaged communities. Particularly with the football and basketball programs. And so i am very, very excited about what you are doing. And i encourage you to go as far as you can. In terms of expertise, we dont really have very much expertise at all in this area as an institution. The doj has really been the one thats been interacting with colleges, including college athletics. And so we dont have that base that the doj has. But having said that, if you want to give us authority, we will, of course, enforce it. But depending on exactly what you pass, it might require a lot of increased manpower on our part in order to do that. And also, depending on what you pass, if it looks Something Like a professional regulation like where youre regulating agents or things like that, and any kind of certification or any type of way, i think that would be not particularly suited for our agency. Thank you. Over the past few months, we have seen the pandemic add new volatility to our Food Supply Chain. And that requires a massive shift in logistics. And amid the financial strain, consumers are trying to stock up on food while producers and retailers are doing their best to insure that the grocery shelves are stocked. The ftc has an important responsibility to help safeguard americas food supply. Mr. Chairman, in terms of the ftcs role, what policies do you feel would be most effective to focus on for maintaining a stable Food Supply Chain during these unprecedented times . So our big focus with respect to food is the retail aspect of it. And so were very focused on that. Were doing our best to make sure that they are as competitive as possible and that competition flourishes at the retail level. The doj is the one that focused on the production of meat and things like that. And were dealing with agriculture, the agricultural side of it, so we would defer to them on that part. In terms of the retail part, were focused on making sure theres good competition for consumer benefit. As you know, the act was drafted following an ftc report that highlighted abuses by major meat Packing Companies at that time. And leveraged their market power. Commissioner chopra, i would be interested in your take on this as well. Particularly on more recent concerns about vertical integration trends that were seeing in the Food Industry. Thank you, senator. I totally share those concerns. What were seeing in the Food Industry from farm to Table Including what chairman simons said on the retail side, but also on the production side, there are serious issues with how certain large, powerful players are able to dictate terms and the lives of so many, whether theyre poultry growers or livestock producers and ranchers. I am concerned that the usdas rule making on the packers and Stockyards Act is going to make matters worse. Its going to make it even harder to make sure that our food markets are competitive and fair. The ftc does have some limited authority under the packers and Stockyards Act, but as we have seen during this pandemic, just recently, the jbs Mountain States Rosen transaction, theres going to be a lot of issues when it comes to the stability of our food supply, and i think we all as federal agencies need to think about it, including our National Security regulators as well. Right. You do have you do have say over retail sales of meat and livestock products. And when you look at, as i know you have been focused on that vertical integration, obviously that has an impact on those retail sales, vertical integration that takes place. I thank you for your comments and hope to work with you on that. Thank you. Thank you, senator fisher. Let me just exercise a little discretion here and intrude on the next round of questioning. Thank you. Mr. Chairman, you dont want this issue of athletic name, image, and likeness, do you . You would rather the Justice Department have that, right . Yeah, they have the expertise in that area. Does any member of the commission disagree with the chairman on that . Who wants this issue . I would personally favor a private right of action for some of this. Its very hard to police some of these markets, and in some cases, the players themselves may be well situated to vindicate their own rights. Would you like for the ftc to have jurisdiction over it . Thats really your choice. I dont think that we seem best situated, but well do ultimately what Congress Passes laws instructing us to do. Okay, if anybody wants to comment quick mr. Chairman, could i just make a comment there . I agree with commissioner chopra that a private right of action would be appropriate. Okay. And please submit feel free to submit written responses expanding your position there, and senator klobuchar, i appreciate you letting me delay your questioning for a moment. Youre recognized. Sen. Klobuchar well, thank you, mr. Chairman. And again, thank you for conducting along with senator cantwell this really important hearing right now. You know, i told many of you this before, but i think that this pandemic has shed a big magnifying glass on some issues that we know are already out here with consolidation, with consumer scams and the like, and i appreciate all the commissioners being here. Start with following up on some of senator cantwells questions. Im on her bill on privacy, and senator kennedy and i have a separate bill, but i wanted to ask, i think it was in your Opening Statement, chair simons, that you mentioned you believe you needed additional Rule Making Authority. I think commissioner chopra also has taken this position. Could you briefly, i have a lot of questions, answer that, in order to do things on privacy outside of legislation. Chairman. Yes, thank you, senator. So in terms of the rule making, what were looking for is a targeted Rule Making Authority. So not kind of pass a general statute that says we want federal privacy legislation. Let the ftc figure it out. No, we think that is your job and you have done great efforts, as you describe, to move that along, and we encourage you to go further and get across the finish line on that. In terms of us, though, just like the congress did with copa, they allowed us to have apa targeted rule making to do things such as change definitions to account for changes in technology or changes in business methods. One example from copa was there, the original language did not include photos. So this was like in 1998 or 2000, and photos werent a big thing in terms of being uploaded to the internet. Now, of course, they are and theyre really important and sensitive. Thats just an example. Before i go to commissioner chopra, one other question of you because i dont think we have delved into this yet. On the front of the hearing in the house last week with the ceos of amazon, facebook, google, and apple, do you based on what you heard at the hearing, i assume you watched it or read the transcript, do you believe the ftc should look back at consummated mergers, not just to learn from them but potentially to take more enforcement action given what we have seen with instagram and whatsapp, with facebook and some of these others, and what the market is looking like right now . Yes, thank you, senator. I dont think it would be appropriate for me to comment on any particular investigation or company, but i have said before that, yes, we have the ability to look back at consummated mergers and to undo them, and certainly, we have done that many times in the past. We have a litigation going on now where were doing that. So that is something that is definitely on the table for us. In addition, what we have done is issued 6b orders to all of the major tech platforms to get information about acquisitions that were not reportable under the act. And were looking at those too. One thing we discussed in judiciary before, the antitrust i cut you off. No, im good. Okay. Okay. One thing you and i discussed at the antitrust subcommittee, and i guess a few of the other commissioners could briefly pitch in here. I looked back historically at the staffing for the ftc. This is not about your decisions, chairman, and when you look, youre like a shadow of yourself from the 80s from the Reagan Administration on down, and yet youre dealing with trilliondollar companies and are expected to be the counterweight to those companies and expected by the public and by all of us, democrats and republicans, to be looking at these things. Senator grassley and i have a bill, as you know, to add more resources with filing fee changes for the mega mergers and the like. I think we should be doing more going into next year in a big way, but could you just briefly say whether more resources would be helpful. The public needs to understand and my colleagues need to understand that shift over time and how its just literally is going to be impossible for us to take on legions of lawyers at trilliondollar companies to do all the stuff everyone is talking about from senator hawley on if we dont have the resources. Yeah, we dearly need the resources. You make a very good point that in the 80s, we were about twice the size we are now. Some of that had to do with computerization and more efficiency among the staff, but still, i think we are behind, and we need more resources. Were busting at the seams. Were having trouble staffing the existing mergers as it is. Like i mentioned earlier, we are on pace to have more mergen Enforcement Actions than any time since fiscal year 2000. Exactly, and heres the point, for my colleagues who want to be fiscally responsible, which we all do, is that you bring in money, the ftc and these antitrust divisions of the Justice Department, brings in money with these fines, and we get a look at all of this in the context and whats happening to Consumer Prices in this new gilded age that were entering in if we dont do something with this pandemic profiteering and other things going on. Let me respond to one thing in particular about that, senator. That is the way the hsr act is currently determined increasing the fees actually would not go into our budget. But you could change that legislatively, and we would ask that you do that. Got it. Okay. Im just going to turn to i said commissioner chopras name but im running out of time quickly. Commissioner slaughter, are you there . She was going to have to go. I was going to compliment i will ask this first on the record, but its simply about the exclusionary practices bill we have. And the need to update our standards for these mergers in light of whats going on around the country with monopolies and the like. I can do that on the record. Thank you, mr. Chairman. Thank you so much, senator klobuchar. Chairman, thank you for having this hearing. Your subcommittee had a hearing two weeks ago on the issue of Consumer Protection in the times of covid19. So ill skip those questions today. Senator blumenthal is in the room. It seems like i should be asking you about data privacy, but im going to deal with at least for this round of questions with the u. S. eu Privacy Shield. Chairman simons, the court of justice of the European Union recently invalidated the Privacy Shield arrangement as a basis for lawful transfers of data with more than 70 of the nearly 5300 companies being small to medium sized businesses , including many in my home state, i would understand this to be an extremely urgent matter for Digital Commerce in the United States. Just simply to begin with, do you agree with the significance of this . Im sorry, yes. Particularly for Small Businesses. I was muted, sorry. Thank you, chairman. Thank you, chairman. Your website, the ftcs website, includes an update on the recent developments related to the Privacy Shield. It states in there, and i quote, continues to expect companies to compline with the ongoing obligations with respect to transfers made under the Privacy Shield framework. This statement aligns with the ftcs previous discretions in refraining from bringing any enforcement action in 2015 when Privacy Shields predecessor safe harbor was invalidated in schrims 1. Can businesses expect a similar enforcement by the ftc in the aftermath of this invalidation of the Privacy Shield . Basically, theyre making promises that they are following the Privacy Shield principles, and if they dont, thats a problem under our act, under section 5. So companies could say they could put on their website, were no longer certified under Privacy Shield. Its been overturned by the eu courts. But they would still be obligated to protect the data in a way that they promised going forward. So if one thing they might have to delete it or otherwise just protect it in the way that they promised pursueant to the provacy shield principle. In that circumstance, how does the ftc respond to that business . You mean if they dont . Yes, if let me first start with if they do, then the ftc would take no action, is that right . Thats right. Okay. Commissioner wilson, let me direct this to you. I would warn that the European Court surveillance concerns in relation to Privacy Shield should not be conflated with the concerns about consumer data privacy. However, is it fair to say that the enactment of a preemptive federal privacy framework might make determining a future determination by the eu easier . Yes. Thank you for the question. And i would agree with that statement. And then let me ask all, in the case of if that is the case, would you support enactment of the consumer data Privacy Security act which provides a uniform National Standard . I have seen some of the commissioners have answered that question, and other senators dialogue, but that uniform National Standard, i would ask for a yes or no from each of you. Well begin well begin yes, sorry. Commissioner wilson. Yes. I think that one federal privacy standard is incredibly important. The internet does not stop. It even has International Borders and businesses need to the predictability and certainty of one standard. Are there any other commissioners who have not spoken to this issue this morning . I dont believe i have. Can you hear me . Yes. Great. I would say i support the idea of a national floor, that makes a lot of sense to me, but i would be concerned about a law where that floor is too low or a law that invalidated stronger state privacy statutes or prohibited states from having the ability to innovation to fill gaps that arent filled by the federal law. Thank you. Mr. Chairman, my time is almost to expire. Lets go ahead, though, since we have not specifically heard from commissioner philips and commissioner chopra on that. Thank you. I thought we had from commissioner chopra. Mr. Chairman, i agree that a national law would be helpful. I do have concerns about deleting all of the state laws. The ftc has dealt with this in the past in terms of working with state laws, determining if theres conflicts, and then what is more protective. And i think we could go down that path again to make sure we dont delete states that decide they want higher levels of protection. Senator, this is commissioner philips. Can you hear me . Yes. Thank you. I just want to echo what my colleagues, chairman simons and commissioner wilson said about the need for a coherent and singular federal standard. Not only would this help businesses save costs and keep barriers down for smaller firms relative to larger. It will also help with another critical privacy issue we face, that is consumer understanding. Its easier for consumers to understand one standard. Let me thank the commissioner for that answer. Its a point that has not been made often previously. Thank you. And thank you, senator moran. Senator blumenthal. Thanks, mr. Thanks, mr. Chairman, and thank you to senator moran for raising the privacy issue. We are continuing to strive for bipartisan solutions, which i think should be within reach at some point, because clearly, his questions and the answers we received and most important, the feelings of the American People are we need stronger privacy protection, and we should continue to work to that end. But as important as new legislation is, the commitment to enforce the tools that the ftc has right now, on monday, twitter disclosed it faces an ftc fine up to 250 million for its misuse of account security information for ad targeting. According to twitter, this breach of trust lasted between 2013 and 2019. Six years. And this announcement follows twitters catastrophic and dangerous breach of dozens of highprofile accounts last month. Twitter has been under a Consent Order since 2011 for exactly these kinds of problems. An order that requires biannual audits and a comprehensive Information Security program. So i think that the public is rightly skeptical about the ftcs use of its existing tools and its inconsistent and inadequate enforcement of the laws already on the books, and i would like to hear what the ftc has to say about this issue at length, but i want to turn first to the issue of antitrust. The house hearings, i think, should give the ftc a greater sense of urgency about bringing an action based on antitrust against both facebook and amazon, which are within its purview. I want to ask chairman simons, can we expect some kind of antitrust action against tech firms that have monopolistic power and may have abused that monopolistic power by the end of the year . And what is preventing action now . Thank you, senator. I dont want to prejudge the outcome of an investigation, but let me say this. We are focused on, and this is the most important thing that we are doing on the competition side of the ftc, which is these investigations of the tech platforms. We formed a new group in the bureau of competition, the Technology Enforcement division. Specifically dedicated to investigating these types of companies, and they are incredibly busy. Theyre very active. And i have told them that what they are working on is the most important thing in the bureau of competition, and that they should do it as quickly and as efficiently as possible, and im very confident they are doing that. Have you given them a mandate that is action oriented . I think the American People want to see action. Oh, yes. I have absolutely. And i talk to them regularly. Let me ask you about some of the scams that have appeared in the wake of the pandemic, as you know, the ftc has issued 255 warning letters about these snake oil scams that have appeared promising cures. Its really the wild west out there. Warning letters simply lack the deterrent and enforcement value of actions. Do you plan more action to stop these kinds of consumer scams that exploit peoples fears about the pandemic and their search for treatments and cures . Yes, thank you, senator. We try to do what is most effective and most efficient to get the problematic advertising or claims off the internet. And so we are able to get out these warning letters very quickly, and so far, they have been extremely effective. Extremely effective. Overwhelmingly, the Companies Take down the problematic language within 48 hours, and where they dont, then we initiate Enforcement Actions. And we brought a number of those already. I think today, in fact, we announced three or four new ones, so we had seven of those already. Well, let me just interrupt. I apologize, my time is running out, but sure. We know from experience, i know as a former u. S. Attorney and a state attorney general that a warning letter means that the company can just come back and you can do an enforcement action, but the better course is to have a judgment on the books that can be enforced rather than have to begin the case all over again. Let me just ask you, finally, on the issue of privacy, in his dissent in the facebook privacy settlement, commissioner chopra criticized the ftc for not deposing facebook executives. Dont you believe that the ftc should depose Mark Zuckerberg in your ongoing antitrust investigation . I cant comment on the specifics of any individual matter, but it depends on the circumstances. What we do, its fact specific. Sometimes its important to depose the ceo, and sometimes its not necessary. But where its important and helpful, we try to do it. And the other thing i would say is, particularly with respect to facebook, we got we had emails from lots and lots of people. We did not need to get mr. Zuckerberg in a deposition for that case. Dont you think in the antitrust investigation it will be necessary to depose both zuckerberg and jeff bezos . Well, mr. Bezos works for amazon, and i cant comment. I understand. Separate antitrust investigations, but shouldnt right, i cant comment. Im sorry, i cant even comment on whether theres an investigation of amazon. The only investigation that is publicly known that our tech group is doing is facebook, and thats only because they have disclosed it themselves, so were able to confirm that. Other than that, we dont discuss individual cases. Fair enough. My time has expired. The credibility of the investigation is going to depend on its completeness and aggressiveness and seems to me that the public will be satisfied only if you do depose the very top executives of whatever company you are investigating. Thank you. Thank you very much, senator blumenthal. Senator blackburn. Sen. Blackburn thank you to each of you for the time to be here today. Mr. Chairman, i think that chairman simons, i think you know that the facebook compliance is very important to us in dealing with social media is very important to us. Youre hearing a lot about it from letters and notes that are coming to you. We are hearing a good bit about it. So i have been jumping back from the judiciary hearing to this one. So let me ask you this. Just very briefly, when do you think youre going to bring this to a conclusion . And are you satisfied that we are going to be able to get to a conclusion with the issues with and all of this going back to the 2012 order . Okay. There we go. Unmuted. Are you talking about the facebook privacy order or are you talking about a facebook antitrust investigation . Lets take privacy first, and then we can go to antitrust. Okay, sure. So the order, the negotiated order settling the order violation section 5 case against facebook was finally entered, i think, on april 27th or 28th of this past year. It was in litigation in front of a judge in the d. C. District court. We know all of that. Where do you feel you are in compliance, or they are in compliance and then are you satisfied with the progress, and then i will add something on it because the clock is ticking. What kind of legislative balance do you think we need to strike to make certain that you all can properly deal with this . I cant comment on any particular investigation of any particular company, but we are very focused on that order in particular, and compliance with it, if theres any problem with it, we will be on it, we will be active, but i cant talk about anything in particular about existing in the public. But you are pleased with where you are in the process, is that what you are saying . As we speak to whatever kind of legislative balance we need to strike to empower you to conduct enforcement to hold big tech accountable, because when we hear from tennesseans, they will say, theres a lot of conversation around this, but what are you going to do about it . So what kind of legislative action needs to happen . I think what Union Colleagues are doing in terms of a new federal privacy legislation is absolutely critical, because our 100 euro statute is not really up to the task, we dont have anything remotely close to what the europeans have with gdp are, so its really important for your work on the federal privacy legislation to continue. Ok, ive got another question, and im not going to have time to get through this, but looking at the invalidation of the Privacy Shields of the e. U. ,of justice of the and some of the european Data Protection authority, they have signal that they do not foresee of grace. To allow data flows to continue during the negotiation of the successor agreement, like that which occurred in 1516. So i would be interested to know if any of you have had conversations with any of your dpa colleagues in europe about the importance to both economies of allowing these data flows to continue, and also if you have a sense of whether or when there might be a final or collective decision on allowing data transfers to continue while a successor framework is negotiated. And chairman simons, i will come to you first and anyone else that wants to weigh in on this, just raise your hand. Thank you, senator. The commerceg with department and other parts of the administration and we stand by ready to help them in whatever way we can be useful to them. We will have to see what direction they had in and we will support them as much as we can. This is commissioner phillips, if i can just add, thank you so much. I really appreciate it. A little bit of context, when thestates harbor agreement, u. S. Government, the European Commission were already negotiating what became the Privacy Shield agreement. It was because of that ongoing negotiation that the european privacy authorities agreed to do what you are describing, which is to allow firms to continue to transact the data. I share the disappointment of secretary pompeo, i do not think it is fair to is fair to hold u. S. To a standard. It is very important in particular for Small Businesses. Were going to do whatever we can to support the Commerce Department in its efforts to continue to hold Companies Accountable to the privacy promises they make. Thank you. Does anyone else want to weigh in on this . I yield back my time. Chairman,ou, mr. Members of the commission. The first thing i want to say is, i just want to thank the commissioners for making it very was ault to determine who republican appointee in who was a democratic appointee. This is the way these commissions should operate, its the way the Commerce Committee likes to do it, and it is a real pleasure to sort of dig into the without necessarily digging into each other. Reporting, what actions does the ftc take to verify that theyre following the cares act provisions and to furnishersthe data are accurately reporting the data . Thank you, senator. We have investigations open, we brought some actions as well. Workshop that was specifically focused on accuracy with the cfpb, and we are working with them as well. They have Supervisory Authority under the three credit bureaus. So we work with them and talk to them about accuracy issues in that regard. Can you talk a little more about that . In front of the banking committee, i dont mind a consultative educational process, but im a little concerned as to where the enforcements stick is, and to the green extent that the cares act specifically instructs the we arereport monitoring for that, if we see something problematic, thats a priority for us. Commissioner, do you want to add anything generally and about the publicpolicy question of whether or not consumers should have access to their own credit reports . I really think we are long overdue for broader reforms of what i see as a broken oligarchy, where consumers are the product, theyre not the customer. The cfpb really is the lead on this because of their broader authorities, are really want to see the ftc continue its focus on some of the tenant screening and employer background check abuses, because if we see some of this being misreported, youre going to see people who are trying to get back to work, trying to get a new place, and they cannot afford the current one. They might be blocked from doing it. So weve got a lot to do, but weve got to really figure out what were going to do long term , trans union, and experience, because its just simply not working, the current system. Some of the folks that are exasperated by the big three and their conduct in their unwillingness to give in any way are sometimes characterized as wanting to undermine the ability to do proper underwriting for mortgages and car loans and everything else. Thats not what were doing. Were trying to make sure the error rate goes down and that consumers have access to their own information. I remember being in a Congress Committee hearing one of the representatives from the big three set our error rate is only 5 . Which means that many millions of people are being prevented from having a job or a mortgage or a car as a result of the errors of these companies, and they just plug along profitably. Commissioner, what do you think you can do under the ftcs authority here . Just to be candid with you, i think the congress rightfully stripped the ftc of much of its authorities here and it to the cfpb. I have obviously been disappointed at the cfpbs actions in this regard because i think theres much more that they can be doing, given the much broader panoply of authorities that they have. Enforce the fo cra, including with respect to whether certain large data brokers and tech platforms may be subject to its requirements, but have been flouting it. But i agree, we need to reform the big three credit reporting agencies and its going to take time, but we need to introduce some real competition because its just not working right now. . Thank you very much, commissioners. I want to thank all of you for your testimony and also for your service, greatly appreciate the complexity of a lot of the issues you are dealing with. My West Virginia girls rise up program to encourage young women to take on leadership roles and to encourage future leaders in america. There was a recent wall street journal article that referenced of fifthhat found 78 through eighth graders, girls in particular, were lonely and isolated during this pandemic time, and certainly understandably so. It was also quoted that girls aboutn 1014 are spending 34 hours a day on tiktok, snapchat, and instagram to stay connected. As children and teens term to sort turn to more social media platforms to stay connected, what are you doing to make sure youre not violating the childrens Online Privacy act . Thank you, senator. We are monitoring the market very carefully. To techgiven advised providers, to schools, to so s, consumers, and thats what we are doing so far. One of the things i think that this points to is that we really need federal privacy legislation. This is an area where it is not just a matter of are you doing what you say, its a matter of what youre doing may not be properly if you dont say anything about it. No one could have anticipated availabilities maybe were some parents might have prevented the use of it are limited the use of it, now its become more difficult to do that isause the only way the law keeping in touch. So i am concerned about that. Im going to shift to another issue, to commissioner phillips on the made in america provisions. I know there has been some lack of clarity in terms of what does it mean to you, what does it mean to consumer perception. Where are we on that made in america . Being made in china, the ,ack of ability availability very frustrating. Were going to try to do something about that here, overly in the next cares package. Do you have a comment on that, commissioner phillips . Bysure, let me just begin following up briefly on your last question. Its important also to note that its as aggressive as it ever has been. That began with what was at record settlement against a company that few americans had heard of, tiktok. Were very glad they are under order. It continued with our settlement with the new York Attorney general for 170 million. Made in the usa, were continuing to do our enforcement. We had a big case recently against williamssonoma. Were also in the process of doing a rulemaking. The reason i dissented is something very much within your power, i didnt think we had the authority to make the rule that we were trying to make. Thats a pretty easy legislative fix, its certainly something that congress can address going forward. Im going to go to commissioner slaughter, thats a beauty of technology. I just wanted to echo your comments about the importance of thinking about how our children are being affected by all of the Online Activity that they are engaging in, particularly, thank you for your leadership in addressing the Mental Health issues for young women. I have three daughters, and this is something i think about all the time. I just point out to you that does give us some specific authority for childrens privacy, but only for kids 13 and under, and only basically to give parents permission and to require reasonable Data Security. It doesnt give us the same sort of General Authority to engage in protection against abuse of privacy and data practices that you are referring to, especially for teenagers. I really hope this is something that congress will think about as you continue to discuss data privacy legislation. Click certainly looks like the daily cut data coming forward in the last several months support Something Like that. Thank you all. Udall. Tor sen. Udall thank you, mr. Chairman, and Ranking Member. Mr. Chairman, i assume you can hear me. Pandemict the covid19 , we have seen americans come together to support online workers. Mexicans rallyw as communities to help their families and neighbors, but just as times of crisis can bring out the best in people, they can also bring out the worst, who target vulnerable people. Thats why weve been seeing this a lot in numerous reports of harmful scams that put consumers at risk. As a former attorney general in new mexico, i know you recognize the need to work with partners outside of the agencies. State attorneys general have their ear to the ground, they hear directly from consumers and many are strong protectors of state consumer laws. A working relationship with them is essential, and thats why i introduced the stopping covid federal and empower state authorities to do more to deter scammers and hold them accountable. My question is, my legislation would allow state attorneys general to bring a civil action in District Court or state court to respond to covid related fraud under the ftc act. So my question for every commissioner, do any of you oppose authorizing state attorneys general to take action and respond to fraud under the ftc act . Simons. Is chairman no, i dont have any reservations about that at all, and i agree completely and want to echo what you said about the importance of our relationship with the state ags. There are boots on the ground and terrific partners and we could not do what we do without partnering with them. No concerns. I think it is a good idea. Terrific, thank you. I think we want answers from phillips, chopra, and wilson also. I would like to take a closer look at the legislation. It tends to be a really good thing. Im not sure how the proposed bill backs onto that. Senator, i agree with your proposal. Thank you very much. Commissioner phillips, we like to continue the discussion with you, and hopefully get to a place where you feel comfortable with attorneys general doing that. Our second question goes to Civil Penalty Authority. My bill also enhances the ftc Civil Penalty Authority, the same bill talked about with regard to the attorneys general. With an administrative complaint against a potential scammer, then theres a ceaseanddesist , a commission can only then seek Civil Penalties in court if there is a further violation. This is months are potentially years of court action, but as weve seen the Current Health crisis moves quickly. Contaminatedhave Hand Sanitizer with false labeling. To would willing enhancing the ftcs authority to protect consumers and the Current Health crisis we support that. The other thing i would say is, we really need 13 b, because we can go into federal court and cana tro injunction and we get an asset freeze for these fraudsters, whereas Civil Penalties might take a while to get to the court system and we have to get the Justice System involved, too. That would be important in the absence of 13 b, but 13 b is really important. Thank you for that answer. Is the current toolkit of Enforcement Actions up to the present challenge . Out,think as you point Civil Penalty Authority would be enormously helpful. It is really hard for us to have to go, in most cases, through , and civilve process penalties are valuable because they put a big stick on the table in terms of potential money that companies will have to pay, which has an important deterrent effect. The chairman pointed to an issue that i think is little notice that is also very important, which is that when we have Civil Penalties, we usually have to go through doj. Id rather see those coupled with independent litigating authority for us on the civil penalty front. Not only gives us those important tools to go into court but allows us to return money directly to consumers. What we want to do at the end of the day is make harmed consumers whole. Give portant to both punish companies that have wronged consumers, and also return money to consumers that have been wronged. Thank you so much commissioner. I have a couple of questions for the record that i hope youll answer with regard to refunds for flights and other travel arrangements, and some of the bots that are taking advantage of consumers in the marketplace. So with that, i would youll back, mr. Chairman. Chairman simons, as you know, hasrming the decency act been hotly debated herein congress. I have introduced a bipartisan bill with senator shots on this issue known as the platform accountability Consumer Transparency act, which among stipulate would the doj recommended this particular per provision in his recently published list of revisions. My question is, how would consumers benefit from reforming section 230 to ensure that the immunity provided by section 230 does not apply to civil Enforcement Actions brought by the federal government such as the ftc . Thank you, senator. We have a number of instances, and its actually fairly common for us to go into court and have defense put on us related to section 230. So it would be very helpful to us to avoid having to deal with that, and allow us the ability after theonly platform participants but in the right circumstances, the platform itself. This has to do with bill that Congress Passed last year all the trace act, and among other things, the trace act required that the fcc register single entities that conduct privacy private lead efforts to trace back the origins of the legal robo calls, and i was pleased to see that the ftc did fulfill that requirement last month. Can you speak to the efforts on engaging with industry initiatives like the u. S. Telecom industry trace back group in whether this Publicprivate Partnership has been successful in identifying illegal robo callers . Absolutely, this has been extremely helpful for us. The trace back organization is very effective, and we are just overjoyed with their progress. The other thing i will say is, what we are doing is, were going after Service Providers that often serve as the entry point for scammers into the u. S. Telephone network, and we sued a company in december of last year, then we send a whole bunch of warning letters to other Service Providers and said look at this, you may be liable. These people are already being sued, you may be next. We think that may have had some impact on a substantial decrease in robo calls since that time. Senator, just to add briefly, also calls for the fcc to to come up with best practices for telecom and for hospitals to help deal with the particular scourge to Public Health that robo calls present. We had our first meeting last week, and the meetings are continuing, and we hope to have a report out, according to the timeline indicated by congress. Last question, very quickly. Weve got a little bit of time left. Mr. Chairman, do you expect to exercise discretion and refrain from bringing any Enforcement Actions with regard to the Privacy Shield until after new structure is negotiated and put in place to transfer data from europe . Expecting what we are to do, or we intend to do, is make companies fulfill the promises they made under Privacy Shield. If they have made promises when you sign with Privacy Shield, youve got to protect the data in a certain way. When youre done with it, youre going to delete it, those types of things were going to enforce with respect to that. The issuerstanding is of pre preemption of California Law has been covered extensively already, and my time is running out, so i will defer that one and perhaps may have a question for the record about that. Senator baldwin. Sen. Baldwin thank you, mr. Chairman. Notednt ftc press release that Online Shopping complaints that the ftc has received during surged. Emic have has has pointed out put out a shopping online guide that recommends Online Shoppers get the sellers physical address and inspect product descriptions closely. His comments and suggestions seem aimed at ensuring that the buyer has the same information during theline pandemic as they would if they were shopping in person. Before i go further, i would like to just ask each commissioner if they agree that generally, American Consumers should seek the same information shopping online as they do in person, and if you could just briefly answer yes or no, starting with mr. Chairman. Yes. . Mr. Phillips . Yes. Ms. Slaughter . Ms. Wilson . Yes, i agree. Let me carry on. We know that many Consumers Want to buy americanmade products, but they cant verify the country of origin of items when they are shopping online. In order to ensure that online consumers get the same access to country of origin and seller Location Information that in person shoppers have, i online act with senator rick scott back in may. The bill requires Online Sellers to provide buyers the country of origin label for products they are selling. With more and more consumers buying their goods online during the pandemic, this transparency is more important than ever. Commissioner chopra, can you please share if you are onlineing the goal of my act and explain the role you say the ftc plays in this important issue for American Consumers . No question that theres so many products for Consumers Want to know where they were made, particularly during the pandemic. Manyhad discussions with major ecommerce platforms, i been very concerned that they are not listing the country of origin except for textile, wool, and other things required to. I think this needs to change, they should disclose country of origin for those goods, and inasmuch as they are lying about it, that can create some enforcement liability, and i think this is a good way to create more information for consumers. Thank you. In april, i joined my colleague senator polly in sending letters to the commission urging an investigation into consolidation of meatpacking and processing its impacts on consumers, farmers, workers and our nations food supply. During the covid19 pandemic we have seen severe outbreaks of the virus among workers at meatpacking facilities in wisconsin, and elsewhere in the country. Though the pandemic has brought many of the issues into starker relief, the concerns around consolidation have been simmering for years. Commissioner, i know the previous question in this hearing about consolidation in the meatpacking industry, but i want to hear if you agree that this has contributed specifically to Workplace Safety and pricing issues, and what do you believe the fcc, as well as other federal agencies can do to address these problems . Federal agencies could do to address these problems . Yes, i a was 100 years ago that the reports expose the problems in the meatpacking industry. Stripped thosess still retainbut we our industrywide Investigation Authority under sections six b. Authority under section 6 b. I think the usda needs to increase its enforcement and its rulemaking to change the undo preferences standard. I think theyre going in the wrong direction and i think the doj, all of us, need to really be cracking down on this. It has some real impacts for those of us eating at the table as well as those working and everyone in our Food Industry. I did note that miss wilson said she had a comment on this issue with the chairmans indulgence, could we miss wilson . Thank you, senator, i appreciate the opportunity to address this issue. I think actually while consolidation might be a concern, one of the significant issues that we may not have to be paying sufficient attention to is the fact that laws and regulations that are designed to apply to some of the larger Food Producers and meat producers impose significant costs and compliance issues when theyre applied in the same way to smaller farmers. And so smaller farmers who need to grapple with these massive Compliance Costs, not even designed for them, end up having to exit the business. There is a fantastic book on this topic called everything i want to do is illegal. So i think revisiting the way in which we regulate Small Farmers could perhaps help to reintroduce more competition into the food sector in the United States. Thank you. And thank you very much. Our next questioner will be senator scott. But we heard there was a question about the senator scott, could you hear us. I could hear you perfectly. Can you hear me. Youre recognized. Thank you. Chairman, just to follow up on what senator baldwin was talking about, i introduced a act which will require online retailers to list the country of origin for each product they sell and i joined with senator baldwin to the country of origin online labelling act which would give the ftc over such laws. The prime act would also require app stores and just to display the country of origin for apps in the market place. So consumers know what apps they download are developed and they could make good decisions. I think weve seen this with recently with tik tok. So im concerned, as i think all of us are, about companies influenced by the Chinese Government like tik tok because they have to adhere to the demands to spy, steal user data and sensor any government the government wishes and weve seen that with tik tok. I dont think there i think we would all agree no american should be subject to this sort of risk. And well see if tik tok becomes owned by a u. S. Based company and even if we do we have to be careful about back doors. My question is what enforcement measures and oversight does the ftc have to ensure Company Operating in the United States with access to personal identifying information disclosed to users where the company is housing that data and how theyre using weve been relying on the congress to do that and you colleagues on the committee and elsewhere. Okay. Have you seen any legislation that has been proposed that you like, with regard to giving you the authority you need . I could get you something on that. Weve given Technical Assistance on a bunch of statutes and wed be happy to provide that to you. So, i mean, first off, what senator baldwin and i are doing with regard to looking at apps and products sold online, do you think if it is the right approach or do you have suggestions that we should change to make sure our goal is accomplished, assuming we could get this passed . Id have to talk and consult with the staff. I havent had the opportunity to look at your legislation in detail. Im sorry, sir. Senator scott, if i could add, one challenge that i support i support the goals. One challenge that is an emerging issue among the Technology Community is verifying the country of origin for software code. This is obviously something that the d. O. D. And the Commerce Department have been thinking about. It is extremely difficult in certain circumstances to verify. It is not physical. And it is going to be a more emerging problem as our whole Industrial Base as well as consumers are thinking more about supply chains and whether they might be back doors or theft from adversarial state and nonstate actors. That makes sense. Senator scott, this is commissioner phillips if i could just add briefly, whenever we about enforcement against privacy and other enforcement against companies that are abroad that have a set here in the United States, we would be remiss not to mention the safe web act and that passage set to expire is very, very important for us. Not only on our own but in particular working with our partners abroad on cases that as cyber cases do cross boundaries. When is that expiring . I believe later this month. Okay. All right. Does anybody else want to respond . Okay. Do you have does the ftc have the ability to require online retailers to disclose the country of origin for either products or perhaps understanding what you just said about the difficulty on the app side because of where code is produced. Do you have the ability to do this without legislation . Yes, senator, my understanding is that we have certain rulemaking authorities that could be used for that. It may be potentially cumbersome. There are certain statutes that directly require country of origin labelling for textiles and wool and other products but not a general requirement, so legislation would obviously make it much more expedited. Okay. Senator, this is commissioner wilson. I do believe that more Information Available to consumers is always better. It will allow them to more accurately evaluate the quality and value that there is product and services may offer to them. And so i think this is definitely a good idea. Okay. Thank you. Thank you senator scott. Thank you chairman. Thank you, sir. Senator peters. Thank you, mr. Chairman. And thank you for putting this hearing together. And each of the kpigsers, appreciate your testimony here today as well. My first question is for commissioner phillips. On june 5th, one of michigans Largest Health care providers finished investigating a data breach that occurred in january. They found that around 6,000 patients had information possibly exposed as a result of this breach. The system that assessed accounts contained personal and protected Health Information according to the system. This included patient names, dates of birth, diagnosis, the codes, procedures, treatment locations, treatment types, prescription information, patient account numbers, pretty extensive information. So my question to you, because i know in your Opening Statement you discussed the need for Data Security in particular, knowing that this technology is constantly evolving and evolving in a rapid fashion, what can the ftc and congress in particular doo to ensure that companies are doing all they could to protect this data especially when it comes to patient data . There are things we can do here. I think a regime that includes a very specific Legal Authority that captures some of the work we do already ensuring that companies undertake adequate processes to make sure theyre protecting the kind of data they have. I think Rule Making Authority is appropriate here and i think civil penalty is appropriate here. My view is that unfortunately we dont always have the people who could efficiently protect data adequately protecting it. The cost is bourne by others. There are externality and a civil penalty regime could help right that structure. Well, if i could senator, may i add something to that . Absolutely. One of the things that i think were going to need to confront is there is a change in my view over the last ten years that much of the impetuous for stealing certain stealing for stealing personal data was Identity Theft. To open up a credit card in someone elses name. But were seeing something very different. Equifax, anthem, marriott, the Justice Department said these were not identify thieves, they were affiliated with state and nonstate actors related to china. And i think were now going to need to be thinking about really safeguarding our entire Data Security even in the commercial context to make sure that adversarial parties could not collect details dossiers on each of us for the purposes of weaponizing it, interfering in our country and manipulating us. So i think the stakes are much higher and the harms are on a different dimension than they were even just a few years ago. Senator, this is commissioner wilson. If i may adjust one thought. Yes, please. I think your question highlights one of the issues we need to confront. Privacy legislation and Data Security legislation essentially are two sides of the same coin and it is important to remember that many Health Care Providers in the United States are classified at nonprofits and so in Data Security and privacy legislation, the ftc should gain jurisdiction to have authority over these nonprofits because, as you point out, they do have significant Sensitive Health data. And so it is just another reason that we need to get privacy legislation coupled with Data Security legislation in place to protect consumers. Clearly. And i really follow those lines about more of the information bxing available. Ill direct this to commission slaughter. According to media reports, data brokers are buying and selling Data Collected from americans phones and have even been tracking americans at protests or at places of worship. And while smartphones allow customers to choose whether or not to allow an app to have access to their location data, americans have no ability to control whether the app developer or the partners sell that information to third parties. So my question is do you believe that americans have sufficient control over secondary uses and the sharing of very Sensitive Data and if not what is the ftc doing to address this problem . Thank you so much for the question, senator. Think as really good point. No, i dont believe americans have enough control for a number of reasons. Our current framework is, as you suggested, basically a in tnoti and consent framework, that Companies Tell Us what they are doing and you say yes or no. But as you know, often that notice is buried in lengthy unreadable privacy policies that consumers often have no choice but to click through to get to access the service. They condition go back and say yes i agree to some sprprovisio and none of that is for tertiary uses down the line so the current ftc authority is basically premised on deception with some unfairness authority, it really doesnt reach that kind of behavior that is deeply concerning and deeply problematic. So i think youre highlighting a really important issue that should continue to be a focus for the committee and i do think in the meantime, the commission should think about where we can apply existing authorities that we have, whether it is standard u dap enforcement or whether we dust off our mag moss making authority which we rarely use because as commissioner chopra pointed out, it is cumbersome and undertaking that process is important to start and not wait for congress to act because these things are happening now in realtime and creating real peril for americans. Senator peters, could we let other members answer on the record. That would be great. Thank you senator peter. Senator lee. Thank you, mr. Chairman. Thank you commissioners for being here today. The ftc first implemented the contact lens rule after Congress Passed the fairness to contact lens consumer act. The rule at its heart is simple. It required prescribers to give consumers a copy of their contact lens prescriptions. The reason is also simple. That contact lens consumers, as congress determined and as the ftc has reiterated, need to have the opportunity to shop around to find the best deal. Now, senator klobuchar and i wrote to the commission raising concerns that federal law was not being properly implemented and enforced and that consumers dont always have access to their prescription. And i was grateful for your response. I want to thank each of you for your unanimous agreement to finalize the new contact lens rule to help protect consumers against this kind of protectionism. Unfortunately im hearing that there some efforts underway to delay this important rule. And so i want to ask a couple of questions about that. Chairman simmons, well start with you. If this rule is delayed, particularly now when consumers are facing significant economic hardships and in connection with the Global Pandemic and trying to socially distance, couldnt consumers end up being harmed and specifically couldnt it end up making it more difficult for consumers to shop around and to purchase contact lens from their retailer of choice and at a lower cost. Thank you, senator, for that question. Yes, absolutely. The whole purpose of this rule [ inaudible ]. Chairman simmons, are you still there . It sounds like we may have lost you. Chairman simmons, you were saying the whole purpose of the rule and then we lost the connection. Can you hear us, sir . Okay, mr. Chairman i think senator lee you were making such a poor point there that no, i think technology went out. I think it is much more to do with the chairman phillips was emotionally overcome at the importance of this contact lens to consumers. Can the witness hear us. Because we do need to get an answer there. Senator lee we had some connection problems. I have questions of other members of the panel and move back to chairman simmons if and when we hear back from him. Lets move to you then, commissioner phillips, optometrists argue in some cases, not all, but some are arguing that the Compliance Costs associated with the rule are great. Some have even argued that they cant do patient signatures because that would require pens to be disinfected between uses. Putting aside for a moment the fact that during covid19 optometrists should be practicing basic sterilization, did the commission examine the Compliance Costs and, if so, what were the findings . Absolutely, senator. As you know, the contact lens rule that we recently promulgated was a very long process involving two proposed rules and taking into account some of the concerns about Compliance Costs about how all of those things are reflected in the final version of the rule that we published. But as you noted earlier, the concerns that animated congress and us also include having a degree of competition in the market, allowing and making sure that the consumers have available to them their prescriptions for contact lens and that sales for those lens not only be done by the prescriber but also by other sellers. Thank you. Commissioner slaughter, in your statement regarding the contact lens rule, you actually noted that congress could go further to empower consumers. What additional reforms do you think congress should perhaps consider in order to stop this kind of market protectionism . Perhaps weve lost commissioner slaughter as well. I could move on to a subs kwequ question. I would like to talk briefly about another issue. Our country is in a nationwide debate regarding online political bias and censorship among certain big tech firms. It is sad to think that internet plats that boast the ability to connect hundreds of millions of people and allow for the rapid dissemination of ideas and opinions believe they know what is best for the American People, to read, to watch and to listen. To know what opinions are dangerous, even when they have no technical expert hes in a particular field. A number of members, including myself, are asking whether Congress Must amend current law as part of the solution and whether the ftc might play a new role in that. Chairman simmons, if youre back, id like to ask you, evaluating whether a tech company is following the terms of service, it is something that the ftc currently does. But having the ftc evaluate political view points is much broader. Would ftc evaluation of online content for political bias or neutrality implement the First Amendment and how would the ftc go about evaluating for such bias . Were informed, senator lee, that chairman simmons had to log off and try to log back on. Are you back on, mr. Chairman . That may not have been accomplished. Lets i ask the same question of commissioner phillips. Yes, senator. Look, i think the process of content moderation is something that big firms face. It is something that a lot of small firms face. Im not sure if my answer was clear earlier in the hearing, but we all recall with horror when press reports about the awful shoot at the tree of life synagogue in pittsburgh included a platform called gaf. This is not all about large tech companies. It is a difficult question. At the end of the day, though, when it comes to moderating speech, the First Amendment is implicated and that is something that we have always taken into account when weve done any of our work, or related to the content of speech with respect to kid video games going back decades. And, of course, the First Amendment is something that we have to keep in mind as we went forward. Thank you. Thank you, mr. Chairman. Thank you. Senator tester. Thank you, mr. Chairman. I love this committee. This is been a great hearing and i appreciate the commissioners. I just want to make a few statements and then well get to my question. Number one, i could not believe ow concerned people are about textiles and electronics when it comes to country of origin labelling yet we dont give a damn mr. B where the food we put in our body comes from so maybe i need to use you guys to enforce labelling for food, at least online food. And the second thing is i want to go back to commissioner wilsons point on Smaller Companies, you are absolutely correct and when the 2012 fair food modernization act came by and i put in an amendment to exemption Smaller Companies and we got it passed and guess who came to capitol hill and acted like the world was going to end, the big food companies. And that is where i come to my question, for you, mr. Chopra, and it deals with consolidation in the packer industry but it is going to deal it with a packers and stock yards act respective. Im going to tell you, this isnt a over statement, we have medium and small size feeders that are going broke and it is going to change the food chain for this country from a consumer standpoint and from a Food Production standpoint. We authorize the usda to put forth new rules on the packers and stock yards act and they came back with a document that isnt worth the paper it was written on. So my question to you, mr. Chopra, what is your suggestion so it works for folks in production and agriculture and folks and consumers. Well, i just have to say that in the submission i made to the usda, i think that the rule making theyre doing is going to legalize lots of the worse practices that allow them to do everything from rigging the weights and measures, to giving poor product and then penalizing farmers for doing it. So there is we need to do a real rework of how that whole thing is working. And we feed to also more answers from the usda about what is going to go on. There is almost no enforcement on some of these things. So i also just add on country of origin labelling, even under the usda guidelines, meet could come from overseas and if it comes into a factory by a u. S. Meat backer it could be labelled as product of usa. It is totally inconsistent with every country of origin stand and ard it feels like a give away to me. Youre correct and it is a giveaway. And guess who suffers. The people in production suffer because youre bringing in crappy meat with brazil and argentina and the consumer doesnt know the difference. So we agree. The question i have for you, mr. Chopra, before i go to commissioner wilson, is there anything that the ftc could do about it or congress has to get off their butt and do it. I would Push Congress but legally and im happy to share more with you and your staff later, our authorities are much different when it comes to poultry products and margarine versus other types of meat. The Justice Department does a lot of antitrust work. Our efforts are really on retail but we have to start looking at the whole food system. Whether it is food delivery apps, whether it is supermarkets, or whether it is the exploitation of farmers. And i just want to share, one of the reasons that were seeing more poverty, more opioid issues in many of the communities is being unable to sell and make a livelihood. Last week were seeing that a lot of those who raise lamb are not going to be able to get it to market and that is going to be devastating. Well, let me tell you, i couldnt agree with you more. And the fact is that were screwing things up by not enforcing the rules that have been put on a hundred years ago. They still apply today. They need some modification and need to make them work or were all going to turn into surfs working for the big man. So thank you for your commission. Commissioner wilson, i want to talk about Something Else that is near and dear to my heart and that is the right to repair. In montana this weekend we harvest peas and winter wheat. I was able to replace my combine because it is about 15 years old. Today it is a different story when you buy this equipment. Because of the technology in it. And by the way, this isnt about cell phones. You could throw this damn cell phone away, i dont care. I could go buy a new one for 300. It cost me 300,000 to buy a combine if i cant repair the damn thing. So could you give me a little input on what we need to be doing on the right to repair stuff. Because it is going to put, once again, people in production of agriculture out of business and consolidated at the ground and at the factory level and consolidated from top to bottom and it is going to ruin it for this country. Youre muted. Sir, thank you for the question and i completely agree with you. Obviously right to repair is an issue that the ftc has explored in a recent workshop. There are competition issues and a bedrock principle of competition is that youre not tied to a manufacturer to do repairs on your equipment. We have a Matthew Ferguson tractor on our farm out here in West Virginia and my husband broke a couple of bands using the chipper and replaced the bands himself because, frankly, the dealer here isnt great. So the right to repair is important. I see you laughing. Yes, we have an issue with the Massey Ferguson dealer here. But at the same time, there are legitimate Consumer Protection concerns with respect to certain products. For example, if you put the wrong battery in a certain product, it might explode. So the ftc as it has done with the contact lens rule is looking to balance the benefit of competition with the protection of consumers from exploding products or products that are harmful to health. But i do believe, sir, youre correct, that there are manufacturers who invoke safety concerns, in fact, not to protect consumers, but to prevent competition for repairs in the after market and that is just another cost that our Small Farmers are facing and that we need to eradicate. And unnecessary. And i want to echo senator schotts saying i appreciate the bipartisan work that this commission does. A lot of Community Banks have been better in delivering ppp assistance. Theseally going after high rates, sometimes 4000 loans is just setting Small Businesses up to fail, we cannot have that. My time is close to expiring, im not sure if the chairman is back. Our ask one more question of commissioners water. Commissioners water. This a really important question. Been doing their work very substantially for several decades. That has never been felt more acutely than it is right now, as we are trying to cope with the pandemic related issues as well as the general, underlying on going work of the commission. Whatever the Congress Gives us we would put to good use on behalf of the American People. In terms of authority and returning many top harmed consumers, in particular, the two things were talking the act. About our the ftc the provision that allows us to return money to consumers. That is one of the most important things to do. Right now that authority is under attack in the courts. Its anonymously important. Civil penalty authorities also help with that to create thatage with Companies Help us in our negotiations and keep the fraud from happening in the first place. Return Civil Penalties to consumers, that money goes into the treasury. It should be used to prevent the fraud from happening to begin with. Thank you for holding this hearing today. I do yield back. , this is senator jacky rosen from nevada. Im not sure that the chairman is on, so i believe i am the last senator and i will ask a few questions and they will and then we will close the hearing out. I want to tell you that you manyy exemplify what so families are going through. Trying to balance work and childcare, and all of that. You sharing your beautiful sleeping baby with us today. It reminds us of all the important work we have to do for the next generation. But i want to talk just a little bit about this. Nevada has many immigrant families that make up the diverse fabric of our state and nation. Nevadans identify themselves as hispanic or latino. Scammers have targeted members of the community as they go through the immigration process. While public notaries may perform the duties of attorneys in south american countries, it cannot practice law or except the United States. Nonetheless, bad actors will suggest that they confide in individuals through the u. S. Immigration process, even though they are not qualified or authorized by federal law to do so. We know that only a lawyer or a federally accredited representative can provide someone with legal advice. Therefore as so many in my state are falling prey to these scams. Trade5 the federal commission released the educational graphic novel to this inareness about latino communities. Nevadas chief Deputy Attorney general indicated that the scams intoxpanding even broader our communities, ethiopian communities and nigerian communities. Although the 2015 campaign increased awareness about the scams in our latino communities, we know fraud is rising in many of our minority communities. Ort other types of outreach resources are you doing with the ftc to protect individuals from other kinds of fraud . How are you working with the agencies and communities to prevent this . I want to thank you for your time kind words about the baby. On behalf of all working parents out there, i appreciate everybody saying nice things about how easy this looks. Its really hard. I want to give a moment to all of the families who are out here and their professional responsibilities. These are really, really challenging times. I appreciate the support from everybody on the committee. In terms of your question, i think this is an important issue. To scams thaton target our most normal communities should be among the highest priorities. In addition to that outreach that we do, we can work with our City Partners and we often host local events with community organizers. Anding to raise awareness to be able to prevent people from falling for the scams before they even come up. We would rather they not happened. When it comes to the fraud, this has been an ongoing problem. Its actually pretty difficult to enforce on a one by one basis. The things we have to start thinking about is more criminal terminal sanctions are it also, what are we going to do to go after the plumbing of some of these rings of mob like fraudsters . We need to look at how they are moving money. At thiswe have to look more with cracking down on the mob mentality and organized crime, rather than one by one. Its definitely a huge problem and its been really worries them to see how its just invading so many states across the country. So we have to look at this systemically and not just one by one. By the time we find out about it, the people who have been affected have gone through such a terrible experience. I look forward to working with you and figuring out what we can do about that. To the last question, i want talk about whats on everybody elses mind. Unemploymentis the in the pi ip or a coronavirus hit nevadas economy harder than any state in the nation. Inhad unemployment over 30 april. Ice i think its still the highest in the country. Our averages 15 . That was in june. We would like to see the numbers coming back up. Over half a million nevadans filed for unemployment insurance. Again, we are seeing scammers, criminals. They are china to defraud people and hack into the system. They are taking that identifiable information. They are doing phishing scams. Its not to be underestimated in nevada. Thousands of families are waiting on their Unemployment Benefits because they are having to read through what some of these hackers and scammers are doing. As the agency is charged with protecting the consumers information, you really have a significant role to play. I just want to quote a little bit from the ftc using Law Enforcement policy initiatives for consumer and Business Education to protect consumers personal information. That is what you are charged to do. I dont think the chairman is on. I will ask you first how much time and resources is being consolidated . Do you know anybody i cannot see anybody on my screen. I believe the chairman has joined. I see some blank screens. Thats the joy of working this way. How much time are you devoting to this, because its not just a problem in nevada, its a problem everywhere. People are not able to pay their bills. To take so much time to stop the scammers from taking the hard earned tax dollars were using on unemployment right now. Chairman simons, r you want are you on . Can you hear me . Yes. The power went out and then my jet pack went out. So i have another battery supply. We are doing at least two different types of things. We are suing people over this kind of stuff, the other thing is, we have an incredible amount of outreach on all levels. Thatve an ftc website deals with all these types of scams related to coronavirus, including the financial ones. Our folks are out all over the place doing media, and they are doing meetings, town halls, and that type of thing. They did one effort with the had a hundred thousand people participating. All of our regional offices where we have boots on the ground, they are out there all the time doing this kind of thing. Online and doing it then we are bringing enforcement action. This is my final question for you. Is there a role for you to partner with our state unemployment agencies . During this pandemic everything turned on its head where you might not partner with them. But in this extreme case, with every state and everybody applying, what is the role that you can do to help states like mine that are really suffering would could be a lot of potential fraud . Thate thing i would say is we have all kinds of partners and they are very important in terms of making our work productive and effective in using our scarce resources. I dont see why we would not at least talk to it talked to the employment offices and see if there is something we could do together to stop this type of horrible thing from happening. I will have my team reach out to you. Maybe there are some ways we can get some help out there. I know its hurting its not just hurting my state, but others. Had your power up and down, we are all in and out. All the technical difficulties today, that i want to thank everyone for taking the time to be here today and for the hard work you do. I know you are probably all happy to hear this, considering with all the challenges we have , that concludes our hearing. The hearing record will remain open for two weeks. Senators are asked to submit any questions for the record. The witnesses are requested to submit their written requests. You, everyone. President trump thank you, everyone. I would like to provide with you an update. To protect American Workers as we battled the china virus. Since the virus escaped china, my administration has enacted 3 trillion in economic relief. It has been successful, you saw that by the numbers from yesterday and the day before. As to used car sales and auto production, there have been incredible numbers. Shockingly incredible. We have neat
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