Transcripts For CSPAN2 Senate Hearing On Federal Trade Commission 20240712

Good morning and the meeting will come to work. Welcome todays hearing on the oversight of the general trade commission. On extended a welcome and thank you for appearing. You will all appear roughly this morning. Include fcc chairman joe simons, and noah phillips. Commissioner chopra pretty commissioner Christine Wilson and rebecca slaughter. Cc the established in 1914. Under federal trade commission act. The fcc is chiefly responsible for protecting consumers from unfair, or fraudulent Business Practices in the marketplace. This includes protecting consumers privacy, and security of the data. And harmful uses of technology in combating deceptive advertising and illegal protocols. The fcc is also responsible for educating consumers about fraudulent activity, and predatory Business Practices and Consumer Education is an essential part of their mission. And its intended to inform customer choices help prevent americans from falling victim to fraudsters, cyber criminals another bad actors. And recently discussed and chairman ran subcommittee hearing 20 scams. This was last month. The coronavirus has a new avenue from scammers to take advantage and the Internet Usage in particular, because of stayathome orders has been a prime target for exploitations. I appreciate the commissions on ongoing efforts protect consumers from Identity Theft. In phishing schemes and other online Dangerous Things during this Public Health crisis. Today series an opportunity over can done to protect americans from deceptive and unfair commercial practices. This work begins by entering the ftc has a Property Authority resources at their disposal to carry out its statutory mandate their authority under the u. S. Safe web act for example empowers the agency to work with foreign Law Enforcement agencies to combat international crimes. This law has provided critical cost or enforcements to the tc to take swift action against criminal activity such as internet permit schemes. And data theft. In reauthorization of the site was favorably reported in this committee this was in march. And summa hub finalized report. Princess is completed, i urge congress to reauthorize the safe act quickly. Before it expires next month. There have also been challenges through the scope of the ftc authority under section 13 be of the ftc act which the Supreme Court plans to address and his next term, the commissioner has long relied on this section to report scammers give money back to those who have been defrauded. I look forward to to see how congress can clarify the statute to empower the ftc not only to join improper paper, but also to compensate victims for their losses. Their ability to protect the privacy and security of data is also essential. I hope that we can all agree that the pendant for pandemic further underscores the strong uniform National Data privacy legislation produces a lower provide all citizens with more transparency choice and control of the data. It would also provide certainty and clear workable rules for businesses across all 50 states. I hope the commissioners will discuss the scope of their existing authority to protect the privacy and security of personal data. And jewels that are needed to safeguard information from his use of unauthorized access printer commissioners will want to discuss the impact of the recently evaluated Privacy Shield framework. The Privacy Shield provided a method for company to transfer information that European Union in compliance with Data Protection requirements. In the support of transatlantic congress for the ftc has played a Critical Role in enforcing compliance with the Privacy Shield since it was established in 2016. Todays hearing is an opportunity to return to review how the ftc is working with the department of congress to develop interim guidance for thousands of u. S. Companies including many small and mediumsized businesses. Impacted by this recent decision. And finally some policymakers are proposing ftc take a more active role that everything unfair or deceptive commercial practices with respect to issues ranging from section 230, of the communications act. Two compensating collegiate for the use of their image or likeness. I look forward to hearing more about the ftcs authority and expertise to address these matters as well as it and has sufficient tools to protect consumers engaging in these commercial activities pretty clearly, there is much to discuss the commissioner i think them again for the testimonies in a downturn to my friend and Ranking Member for her opening remarks. Senator cantwell. Thank you for holding this important hearing today as we invite the commissioners to come before congress to talk about the impact of this pandemic in our constituents. The amazing impact that is having on our economy and our healthcare systems. My view of the ftc is about. You should be doing everything in your power to help americans during this time of crisis. The mission was of extreme importance in our nation continues to reopen one of the worst Health Emergencies and one of the biggest economic crisis ever faced. And so we have seen that the covid19 pandemic has attracted bad actors and scam artists including those who take advantage of peoples fear and dire circumstances. Im sure every member of this committee is for from their constituents on these issues about buying an effective facemasks ring subject to covid19 attacks are saying advertisements for medical coronavirus cures. Thousands of people have reported skyhigh prices for goods and services from the family and the spread of covid19, the scams are happening in every part of the state. There was a recent story in the Seattle Times about sanitizer for 150 for 7 sanitizer. Some price gouging and issues related continue to pile up. So just like the spread of covid19, these virus scans are happening everywhere. Theyre impacting world communities, urban communities and Rural Communities and earning americans or than old. Turning thats the case and what my state of washington, people been scammed out of over two and half Million Dollars since the pandemic began. More than 3500 reports of fraud among many of the attorney generals and one after these profiteers, i believe the ftc is holding back you could be doing more. We must move beyond the warnings and threats in response to these unconquerable scams. We missing them exercising real enforcement with real ones was is to protect consumers and families when they are most vulnerable. It is my belief the ftc is to clarify gouging registration to go up the scammers. They must allow unscrupulous merchants to exchange exorbitant prices sometimes work five savings like personal protective equipment or medical equipment simply because their families are desperate for an Interest Income on the frontlines of the epidemic in kirkland, washington with evergreen hospital and i can tell you that is not a good thing to get calls from emergency room doctors who are saying that they are getting price gouges on crucial equipment when theyre in the frontlines of this pandemic so we need to make a that is illegal to paddle defective mass or fake covid19 things. And we need to empower this attorney general to empower them to go back after them. So this is especially true given our crisis today. So with many cells happening online, Internet Sales should also be working with the federal and local Law Enforcement to identify price gouging. So mr. Chairman, i plan to introduce in the coming days, federal legislation to do two things. To move both on price gouging position to ensure that the law is clear consumers can be protected in this area. And to enforce Civil Penalties for deceptive covid19 scams. It is time for us to act on these important pieces of legislation. It is time for us to protect consumers from these very important issues during time of crisis. People need help and support. They dont need deception and schemes. And we need an ftc that will be more aggressive. Thank you. Thank you senator cantwell and we look forward to seeing that legislation once you get adapted and introduced. We now turn to testimony summaries of testimony from our witnesses. Recent testimony has been submitted and admitted into the record in full at this point. And we ask each member of the commission to summarize testimony in five minutes of possible. Beginning with the honorable Joseph J Simons rated and again he joins us remotely along with all of the other members. Chairman simons, you are recognized sir. Thank you so much chairman wicker. Ranking member cantwell, and members of the committee. Its an honor to be with you today even if it is virtual. And especially alongside my fellow commissioner. Despite the challenges presented by the pandemic, the ftc has remained active, open and aggressive. We are using every tool in our arsenal on covid19 and related initiatives while simultaneously handling our everyday efforts to protect consumers privacy, and a security to stop fraud, and to ensure that advertising claims are truthful and not misleading and to combat illegal robo calls. And what is truly extraordinary, commissions has accomplished this. While quickly transitioning from nearly 100 percent office space work. To nearly 100 percent telework. On take a moment to focus on one of my priorities. Privacy and Data Security. Our enforcement in these areas including cases against facebook, google and youtube. Has been highly successful within the limits of our authority. I have said before, its a 100 yearold statute thats been in perfect tool for this purpose. We 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 value based decisions underlying Privacy Protections. From an enforcement perspective, ask the legislation give us three things. The ability to seek Civil Penalties, jurisdiction over nonprofits and common carriers as long with everybody else and three, targeted apa Rulemaking Authority to ensure that that pace with changes in technology and the market. This is somewhat to the approach the Congress Took under pol pot. We will continually vigorously enforce existing privacy statutes. And we will use our extensive experience and expertise to enforce new privacy laws that you pass. We also need your help to clarify our authority under 13b its your pencil 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. These Court Decisions threaten the essential authority in this issue is now before the Supreme Court. Though strongly urge you to clarify the law on 13b. Want to thank the committee for advancing legislation to reauthorize safe but which is an indispensable tool in combating fraud. However, without further action some safe levels sunset on september 30th. So id really like your continued support of pushing this effort across the goal line. And keeping safe web in our enforcement arsenal. Please know how grateful i am what you have already done on these issues. And im very think of for the Financial Support that congress has given the ftc this year. 20 milliondollar increase averted fte reductions, and instead allows us to hire more people for some of our most fickle work. As a fundamentally recent ruling the Privacy Shield. The mere study and its effects. We stand ready to start the administrations efforts in this area. At the same time, they will continue to hold Companies Accountable privacy commitments including privacy promises made under the Privacy Shield. Ill end by briefly highlighting our enforcements. We are on pace for the highest number of merger Enforcement Actions in 20 years. Since fiscal year 2000. We have brought authorization cases in the last year for elijah reported the Technology Enforcement division on what we called ted which is currently pursuing a number of very significant investigations involving big tech platforms. We have used our study authority to issue special orders to alphabet, amazon, apple and facebook and microsoft requiring them to provide information about prior acquisitions not reported under the hsr act pretty were committed to using every resource as effectively as we can. To protect consumers and to promote competition. We certainly look forward to continuing to work with you and id be happy to answer your questions. Thank you very much mr. Chairman. And i we turn to commissioner noah phillips. You are recognized. Thank you mr. Chairman. Thank you all for the opportunity to appear before you. I am honored to be with you today. Intensified alongside my fellow commissioners about the important work that we do with the ftc. I also to thank you for your flexibility on format. Is always good to be back in the senate even if that means virtually. Theres lots cover i look forward to our discussion. But i want to take a moment to highlight an important issue. And i know its a focus of many of you pretty data, security. Partly because five that americans learning about another major cyber attack, breach or the linda book ability. The social media platform was exported three weeks ago. Lastly, researchers devices running windows and its operating systems which can impact billions of devices. Consumers get this. The 2018 Congress Department study showed Identity Theft is the number one privacy and security issue hurting americans. Considering the harms that americans have in mind, when they think about privacy, Data Security legislation is one of the best things we can all do for privacy. In our economy, its not going away. And is forced not only to the ways. [silence]. Okay commissioner, your video pros for a moment. So we want to make sure your point, on these technical difficulties. And you can resume that very point in the testimony. So we will just pause for a moment. And on the advice of our technical experts. Can you hear me. We can now appear you predict. Thank you and my apologies. I do have a connectivity issue. He could just repeat the sentence or two. And we can hear you. We dont see you. My apologies. The vast majority of attacks, and 2019, the results over 1400 reported preachings and the u. S. Exposing over 160 million records. The loss corruption, of this data imposes serious arms. Including identity and antitheft and Exposure Assessment data, years of expensive litigation and so on and of course, inadequate Data Security is a profound National Security issue. The ftc, 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 auto dealer management of a software provider. A software app which also rises other problems. The Credit Bureau we alleged neglected to fix and has vulnerability results in a tax records of over hundred 45 million americans print were also imposing new and requirements part Data Security orders like certifications of compliance a slight senior officials and the thirdparty process. Statues like, they widely give us Data Security Authority Areas of heightened sensitivity. The regime today, including in areas of particular vulnerability pretty consider the internet. Proliferation of connected devices is good for consumers and the economic grade it creates risk. The manufacturers of the 15dollar device may not have adequate incentives. We grapple with the issues. And again just a few months ago and or settlement, a smart box. The department of Homeland Security Cyber Security infrastructure security agency, builds up Cyber Security Effective Partnership with public and private entities, and also active. We really consult with them and refer to them as a resource and a consumer and business education. We also view use of the tools. They help businesses identify risk favorably rated and security invitation. I think the article further. And consider encouraging participation with cigna through mechanisms like integrating network into our orders. Today though, stressed the importance of the commission called the Data Security legislation. We need to be flexible to deal with Rapid Technological Development and mindful of the fact that the defendants in 30, have often themselves become a felony. If a specific commercial mondays and additional incentives to protect data are critical. His report issued just days ago about many large companies, still failed at the vulnerability has shown that those who can most efficiently address Data Security problems, often fail to do so. Data privacy is something which many of you have been working hard. It is important part of our mission to prioritize pretty Data Security legislation is one of the best things i think we can do. [silence]. Just so you know, i data privacy. That is when your video pros of mr. Commissioner. So perhaps, we can bring that out. [silence]. Lets see. Can you hear us now sir. Commissioner phillips, i believe the chairman is addressing you. Forgive me. I did not hear the question. Could you repeat it please. Commissioner phillips, you were in the middle of a sentence about data privacy and your screen froze up again. So if you could restart there. And about that area. Absolutely very briefly mr. Chairman. I believe that data should be one of the most important things about legislation. Very good. If you will complete your statement then we would appreciate that pretty. Yes thank you. A copy for the record. [silence]. Do you have more of your written statement that you would like to, of your verbal statement that you would like to complete. When we go ahead into the next witness. Because we have technical difficulties. Thank you commissioner phillips and i returned to commissioner. Thank you chairman wicker. And members of the committee for the opportunity to appear before you today with my colleagues. The federal trade commissions responsibilities are wide and farreaching. With so many that directly relate to the crisis we face. Healthcare and pharmaceuticals, disinformation and fake reviews. Abuse and misuse of data and so much more. Theres one area in particular that the ftc can and should prioritize that i want to. Which is protecting americans Small Businesses. According to a survey by the society of Human Resource management, 52 percent of Small Businesses believe theyre likely to fail. Due to the effects of covid19. This comes through, millions of businesses and many more millions more for them could lose their livelihoods, devastating local economies in the process. The ftc has an apartment in print Important Role to play to protect Small Businesses from abusive practices. First, we must crackdown on Small Business loansharking. A Small Businesses are struggling to access credit including to the paycheck protection program. And this is giving an opening to bad actors and target restaurants, stores and other local businesses with predatory loans. Many of these wall street affiliated 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 pleaded guilty if the lender sues them for payment. These causes are illegal in consumer contracts but are being unfairly weapon iced against americans Small Business owners in the ftc is the only federal agency with authority to crack down on these not make small Business Practices and weve taken some important actions that we must look to systemically eliminate these illegal practices before it is too late. At second the ftc must safeguard operators of franchise businesses from abusive practices by franchise stores. Franchise businesses encompasses broad of businesses across the economy from auto repairs to real estate to Fitness Centers to fast food and so much more. Operators of franchise businesses employed millions of americans then they are also agreed to be minority owned compared to other businesses. However there is size of franchise orders may be using the pandemic to impose new policies that exacting more economic pain on franchise operators for example public and 7eleven franchisees are fighting back against attempts for the franchisees to gain more control the public practices that should cause more risk to business owners. The ftc administers this the franchise rules and enforces laws that an prohibited unfair Business Practices writing this responsibility is critical given the threats faced by 70 operators of businesses today. Finally, the ftc on anti police markets for insight committed mergers that scoop up scores of Small Businesses. Uncommon Acquisition Strategy is called rollup. This is when the buyer often the private but he find it requires a substantial number of small players in the market and combines them into a single large one. For example many independent medical practitioners are seriously struggling right now. And many believe that will need to sell their practices to an Investment Fund or hospital. Due to the dire economic faces. So extension in particular, they may have a serious impact on quality of care due to the diminished competition. Many of these deals are not subject to merger reported because the relatively small. When buyers acquire dozens or even hundreds of the Small Businesses, he can kill competition make it more difficult for new players to adjust markets. The ftc wanted to use its authority to halt any anti competitive freezer monopolization streams the stamp out competition. In closing, we face an unusual and extraordinary times for a economy in the ftc needs to continue to sharpen its focus on the impact of the pandemic and the crisis on Small Businesses. Thank you again for the opportunity i look forward to your questions. Thank you very much. And now we turn to commissioner Rebecca Kelly slaughter. Thank you. Was aghast. This is hattie. She is my new. Shes two months old. And like many americans, i am home with my kids. So she is with me today. She seems very relaxed about your position on the issues. [laughter]. Lovely, she popping her head up right now pretty. Her name is now in the committee record forever. Oh good, she will be very proud. Me start over. So i can address the committee. Thank you so much for having us here today. Most americans enter cells fallout from the coronavirus, i will confine my oral remarks to that topic. I worked most of the burden, kids, workers, and patients. As a working parent with four Young Children at home, who have been struggling to manage Distance Learning for her kids, even with the best circumstances and resources, im especially sensitive to education issues. The pandemic has exasperated the deep disparity in Educational Equity in this country. From day one, we shall well seamlessly to online models and schools for continued learning. Families have access broadband and devices. In the possibility for parent to be available at home. For millions of americans from vulnerable communities, schools simply stopped. As many as one in six kids lack the equipment necessary to participate in Distance Learning. In nearly one quarter of kids lack reliable internet access. And this particularly affect rural and low income families. The solution, and they are considering posting increase privacy arms tickets. Critically kids and communities already babbling the inequities. We need to acknowledge that privacy and data issues are also equity issues. I rented in Person Learning models will require unprecedented collection of personal data to facilitate contract tracing, quarantines and family choice. Online learning demands rapid adoption of a suites of technology that may be unvented and use without supervision. Childrens families can pay for the protective services, pork is been paid by sacrificing their privacy. The ftc should help mitigate these potential harms. Was that the agency were quickly to put out guidance how to protect student privacy. Ftc must aggressively use, and general section five authority to hold Companies Accountable. To fill the gap if it violates carlisle. But i want to be realistic about the best Case Scenario many families face during this current to make your. Shared devices, being used by kids for hours with little oversight by adults. Current law provides very little protection in these circumstances pretty particular for teenagers and general audiences. In the need for comprehensive data. With meaningful limitations on the collection and use of data. And prohibitions on discriminatory practices, star patterns and databases have never been pressure. Ftc stands ready to enforce the federal privacy law. And i hope that the pandemic catastrophic consequences for children will push for the final. I believe them and think data harms emerging from the prices demand the commission to consider instituting a role making. To identify and address listed abuse. In addition to supporting kids, we must support workers. I recognize how fortunate i am to navigate the challenges of childcare and only care from the privilege employment. At least 11 percent of my fellow americans do not share the good fortune. And i focus on Small Businesses which are significant source of implement and maybe the ftc muscles uses Competition Authority to better protect our workforce by sharpening our attention on anti competitive conduct. Employers often complete intent compete by providing the highest wages and especially today the most Robust Health and safety measures. We should focus on these issues and these actions and also consider whether and how our 30 might be applied to address them. The most fundamental challenge will face is i have overcome the deadly Public Health crisis. Which we know has outside impact on seniors and communities of color. The ftc must continue to protect access to care by challenging problematic hospital and Healthcare Provider murders. An increase prices and limit patient choice. We must vigorously provide security as well as provide healthcare services. We also must have creative ways to help these prices. As a substitute for clear authority. I would ask congress to give the ftc a direct mandate to stamp out abusive icing gouges. In conclusion i want to acknowledge dedicated Public Servants of the agency who have been working through the spices added in hunting challenging circumstances been working from home especially with kids. It is harder than i couldve ever imagined. Providing unmatched flexibility her staff to ensure that they and her familys remains sacred and the staff has unwavering commitment for the important work of the commission. Thank you commissioner for it is indeed ironic that just as you were speaking about online Distance Learning, we lost your video although we could hear you did it on the screen, was the text saying that we have lost the picture because of low bandwidth. I apologize. I think the points of the problems that we have. If a member of the federal trade commission has problems with distance testimony, you can imagine what those students that are trying to do Distance Learning are experiencing also i want to tell you how he has a beautiful and appear there. He is well behaved. Thank you for the testimony. And now we turn to commissioner wilson. You are recognized. Thank you. Im pleased to appear before you today. Like like to highlight two areas by respectively believe they can fulfill its mission print privacy legislation, maintaining the focus on consumer welfare and economic driven enforcement and the trust. As mike collins of shared federal privacy legislation is necessary for several reasons. First businesses need predictability. International framework. And consumers need transparency regarding how the data is collected and shared. With currently face significant information. And third, emerged in privacy laws for example, the covers the privacy of health Data Collected by a doctor but not by apps. The need is more interest now given covid19. For millions of americans work in school moved online. Being deployed to monitor compliance for quarantines and contract tracing. While many of these technology safely easing quarantines and resuming normal life, these tools depend on Sensitive Health and the patient data. We now face many new and complex privacy issues. Interestingly, effective Contact Tracing is Widespread Adoption with Digital Trust is lacking. Washington post found half of smart phone users who could use Contact Tracing apps, wellspring these adults trust tech companies. Privacy legislation would help build Digital Trust which is necessary to foster continued innovation and investment. Privacy legislation is also necessary to protect our Fourth Amendment rights. Nameplate reasonable asportation of privacy consumers surrender expensive data for their use of other connected devices. They know and accept that nothing is private. And they have no reason to and the Fourth Amendment protections. While privacy is important so as competition in privacy legislation must be practice. Maintain competition and foster innovation. Research indicates the passage of gdp are, led to decreased enter Capital Investment and entrenchment of dominant players in digital advertising. And compliant, it is costly for Small Businesses and new entrants. Yes legislation should seek to avoid these pitfalls bring with a dual mission in competition and Consumer Protection, the ftc is well situated to provide Technical Assistance to congress on this issue. For other considerations for privacy legislation, first the ftc should be the enforcing given decades of experience. Second, like, legislation should include monetary penalties. In ftc should have jurisdiction over nonprofits which collect sensitive information. Finally, target apa permit the ftc to address technological development. All turned out to the ftc competition. The consumer welfare standards and antitrust which mention the impact of competitive product on consumers. It is under attack. The standard suffers consumer welfare standards also addresses other important factors like quality innovation. If people wanted only the cheapest product, they would still use the phones and some smart phones. But price does matter. In interest, packing low prices is the central antitrust role is going to hurt vulnerable consumers the most. This contact like it drives up prices without increasing quality or renovation of most of the Business Practices and mergers that we review require scrutiny. It forces whether an action or deal was legal, but on his competitive effects. Economic analysis help them determine whether any harm to competition is outweighed by consumers. Without economic analysis, and i trust the best would be per se rules resulting in big distance decisions the prioritized form over function creating market disruption. At worst, antitrust, untethered from economic telesis would be subjected and vulnerable to public to an ablation Pretty Companies would seek the favor of legislators and regulators instead of according to the consumers pride and closing of the ftc welcomes the opportunity to assist congress on these issues. Im happy to answer any questions you may have. Summa thank you. After the two testimony rebecca. I would like to thank her for pointing out what a wonderful job the staff of the ftc does. Answer each member of the commission subscribed to that. We certainly cant say the same for our hardworking and talented and knowledgeable staff here in the committee on both sides of the dais. It gives me a chance to say that. Lets start off i guess we will begin the chair. So chairman simons, lets talk about the ftcs role for enforcement of section 230 of the Communications Decency act in particular, president trumps executive order in may on preventing online censorship. Specifically, section four of this article on the ftc to take action against Online Platforms. The restrict speech in any manner inconsistent with their terms of service. What is your view mr. Chairman on the ftcs responsibilities under the executive order. And if you seen in examples of the behavior described in the order, and taken any action under your authority so far. Thank you mr. Chairman. We have not taken any action according to the executive order. We get complaints from a wide variety of sources. From the public, from congress, from competitors and people and consumer watchdogs. It is very important that we get this complaints and we Pay Attention to them. Lots of complaints come from members of this committee. Were very thankful that you provide us with the thoughtful heights. Where independent agencies that we review all of them independently. We have jurisdiction over commercial speech and particularly and unfair. And in some other statutes. So we look to see within the confines are subject to unfairness or our weather within the authority as i described. In our authority focuses on commercial speech. Not political Information Privacy complaints that are not without jurisdiction, then we dont do anything pretty busy place in our, may take a closer look and figure out whether the violation and we determine whether its appropriate pretty. So mr. Chairman. You dont use political speech is within your jurisdiction. Correct. If the public and members of the senate are concerned about Online Platforms like twitter and facebook, being inconsistent and the way the 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. Political content yes. Who else would like to comment on this. I will take my whole five minutes on this. Fishermen wicker, i am happy to wait in. They putting aside the executive order, the issue of section 230 is one where a great concern in is a great partisan consensus that is been abused. We see when it comes to counterfeit and defective goods and unreliable linkages between Online Platforms and brickandmortar stores. In general, i think the scrutiny is warranted when it comes to technology platforms, using any liabilities in public privileges and using that as regulatory arbitrage. I think many of these platforms do have to much power, certain policies and regulations. And i dont want to see them continue in my view, to over use and abuse that legal immunities that congress has provided. 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 this model is inconsistent with the origins of section 230. On a section 230 of us to safeguard and promote speech. Its supposed to prioritize certain types of things over the others based on what makes those companies more money. I think commissioner you make some very good points there. I would observe that the hearing the house of representatives last week, a bipartisan basis indicator of concern that these platforms are artfully big. And too powerful. And that it is a matter of concern for the consuming public. I appreciate you testimony there. I also have a comment. You noted that this was a bipartisan issue in last weeks hearing. And actually have the chairmans was in front of me. He has the ability to make money would affect googles algorithm. In a search result. He also noted that facebook and google have gravely threatened journalism in the United States and noted that we hear Google Facebook are making money and he said its very dangerous situation. And so i agree. So Many Companies now provide a significant portion of america with its news. And so, there is concern about content, my colleague and i have previously asked the 50 seat Public Statement to prioritize the studies that explore how context generation and targeted advertising practices impact collection use and sharing and how the abundances nation of data impacts the creation and refinement of algorithms that drive content duration and targeted advertising practices. So i think that this issue as my colleague commissioner, noted is very important one for us to consider and to learn more about. It. Have those studies been authorized. Nothing has been publicly announced. Thank you. Undoubtedly w discussion. I hear a voice. [silence]. Perhaps you are being censored at this point. Mistake. This will be a further topic of questions. Im not further and turning my time at this point but recognize the distinguished Ranking Member. We will get back to you for an answer once we get these timed out. Senator cantwell. As to my thank you mr. Chairman and again thank you for holding the support tearing apart all of the feedback from the commissioners screen is been quite interesting obviously. I like to go back to price gouging. In april of the state of washington from the attorney general launched a campaign to fight price gouging. The ignition followed 400 price gouging related complaint around the letters to washington Online Sellers. Accused of price gouging upwards of hundred and 50 site visits is that businesses that were subjects of these complaints. So this is a very important and timely issue as it relates to the crisis and want to make sure that americans are getting all of the help they deserve. Currently the federal agencies have very limited authority to prevent price gouging. The ftc of the germans mentioning, collector unfair and effective practices which has not been used in the cases of price gouging. That is why i believe that we need a new definition critically during the time of an emergency. You should not allow for these unconscionably prices. And i think that we should do something about that. So i wanted to ask you chairman. Do support congress doing something specifically on price gouging authority. We agree that price gouging is a very serious problem. Especially for ppe and the like. We currently work with the doj and the state to refer cases to them because as you said, its really not a good fit for price gouging authority but we would vigorously support and enforce legislation of Congress Passed a law on price gouging. We think that legislation should include a triggering event and time limit. Should be national in scope which are defined the products that are covered. And described what constitutes an excessive pricing increase and provide carveouts for offsetting cost increase. Thank you predict. Thank you for the spring i agree. Critically we needed to find a crisis we certainly have been involved in what we think have been manipulations of oil markets and frightful took advantage of oil prices during hurricane. And certainly been involved in electricity rates and will be thoughts were manipulated electricity markets. We look forward to working with you on that. And commissioners offer. It hurt first, the me just thank you for mentioning are enlightening our day with patty. Thank you. But also, for mentioning broadband. We have an important opportunity for the next covid19 packages were seeing tools make decisions about what theyre going to do on the Education System for the call. Really have to address this gap and we need to make sure the people are there in the program so 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, he also mentioned and commissioner, what is your perspective about the core provisions of a price gouging. What we heard from the german but what do you believe needs to be in the legislation. Thank you senator for the question youre right about broadband. As you can see with all of us struggling with our feeds occasionally in the best circumstances. We can see how important it is. In terms of price gouging, i agree with a lot of but the chairman said in terms of what the parameters of what it is. Or not to make sure it wasnt too limited and didnt put too high of a burden on the agencies to establish the circumstances have been met because when is the case and we cant really bring the cases effectively. We want to to protect the public. In the last want to make is i agree also section five is very much an imperfect tool for addressing these problems but i want to see in all cases including the case of price gouging, or maybe especially in thinking about whether particular circumstances might give rise to creative use authority and hard on this topic. And we talked about in terms of price spikes recently. So i think we would really benefit from clear legislation from congress. Very mature review this is a high priority and we can see the reallife effects of American People everyday. Thank you. Thank you and i agree. Two quick points. I do not want to see any federal law to placate the state laws that preemption of state laws. I dont think it is appropriate when it comes to this issue and i also hope given some of the framework and the defense production act as well. That you also consider a menta criminal penalties in certain circumstances. I believe the Effective Work on this as it relates to Energy Markets and having criminal penalties given the ftc and the federal Energy Regulatory to police Energy Markets and we dont need high energy costs. I just want to mention on the commissioner wilson point about content. This is really a severe problem that is undermining the newspaper industry. The fact that these curators basically on the entry and point of delivery is limiting the options before our broadcast. In the content delivers in the newspaper business. I look forward to seeing what this commission comes out with on this. But i think this is also very important issue that needs to be addressed. Thank you pretty. Thank you very much. Thank you mr. Chairman. Im sure you know this committee has been evaluating fully on the likeness role that his taking shape at the state level. And recently developed. Im interested to hear your perspectives on this matter. As talks continue on the potential framework, resources, what he believed this mission may or may not be to enforce added protection to student athletes. I think you have to unmute sir. Can you hear me. Thank you for the question. It i think i was uncommitted and then mistake i muted. So im so sorry for that. Im a big believer in that competition should function and almost every situation including college athletics. I been very concerned for a long period of time that students are not getting what they should get. In terms of compensation what they do. This is particularly serious because large effect on minority disadvantaged communities. Critically with the football the best ball programs. And so i am very excited about what you are doing and i encourage you to go as far as you can read in terms of expertise, we dont really have very much expertise in this area. As an institution. The doj hasnt really been the one is been interacting with college including college athletics. So, we dont have that face that the doj has. Having said that, if you want to give us authority, we will of course enforce it. But debating on exactly what you passed, might require a lot of increased manpower on our part in order to do that. And also depending on what you pass, look Something Like a professional violation like where relating agents, and any kind of certification are the types of ways. I think that would be not particularly suited for our agency. Thank you. Over the past few months we have seen the pandemic have art add new volatility to our Food Supply Chains and are required a massive shift. In the midst the financial strains, and producers and retailers, are doing their best to ensure that there shelves are stocked bringing the has an important responsibility to help safeguard the food supply. Mr. Chairman, in terms of the ftc role and policies what do you feel would be most effective for maintaining a stable Food Supply Chain during these unprecedented times. Are big focus with respect to food is the retail aspect of it. We are very focused on that. But doing our best to make sure that there is competitive as possible and that competition flourishes at the retail level. The doj focuses on the protection of meat and things like that. And we are dealing with agricultural side of it. We would do firm to them. But in terms of the retail part, we are very focused on making sure there is good competition for consumer benefit. It was drafted and then in the ftc report, the highlighted meatpacking companies at the time. , i would be interested in your case as well. And on more recent concerns. That they are trained in the Food Industry. Thank you senator fisher i totally share those concerns right of overseeing in the Food Industry from farm to Table Including what chairman simonson on the retail side. But also on the production side. Make it harder to make sure food market has been there, they do have some limited authority but as we seen during this pandemic, just recently Mountain States Rosen transaction, is going to be a lot of issues when it comes to the ability of our food supply and we all as federal agencies need to think about it including our National Security regulators as well. You do have say over retail sales of Livestock Products and when you look at vertical integration, obviously that has an impact on the retail sales that takes place. So i thank you for your comments and will work with you on that. Thank you, senator fisher, let me exercise a little discussion and intrude on the next round of questioning. Mr. Chairman, you dont want this issue of athletic, name, image and like, youd rather the Justice Department in that. Gather have expertise in the area. Does any member of the commission disagree with the chairman on that. He wants this issue . I would personally favor a private right of action, its very hard to police some of these markets and in some cases the players themselves on may be wealtwell situated to indicate r own right. Would you like for the ftc to have jurisdiction over . That is your choice, i dont think that weve seen best situated but we will ultimately do what Congress Passes laws instructing us to do. Mr. Chairman can i make a comment, i agree with commissioner that a private right of action would be appropriate. Okay, please submit, feel free to submit written responses expanding your position and senator klobuchar, i appreciate you letting me delay your questioning for a moment or two, you are recognized. Thank you, mr. Chairman, again thank you for conducting, this really important hearing right now, i told many of us that this pandemic has shed issues that we already know are out there with consolidation, consumers and the like and i appreciate the commissioners being here, we were following up with cantwells question along with privacy and senator kennedy and i have a separate bill, but i wanted to ask, i think it was in your Opening Statements that you mentioned you need Additional Authority and i think theyve also taken this position, we have a lot of questions and can you briefly answer that question in order to do things on privacy outside of legislation. Yes, thank you, senator. So in terms of the rulemaking, what were looking for is a targeted Rulemaking Authority, not past the general statute that says we want federal privacy legislation, let the ftc figured out, we think that is your job and your great efforts as you describe to move that along and we encourage you to go further and get across the finish line. Just like the congress did, they allowed us to have apa targeted rulemaking to do things such as change definitions for changes in technology and business method in one example is the original language did not not include photos, this was in 1998 or 2000 and photos were not a big thing in terms of being uploaded to the internet, now of course they are in their important insensitive, that is a target of rulemaking. Before i go, i one more question for you, on the front of the hearing in the house last week was amazon, facebook, du, based on what you heard on the hearing, i assume you watched or read the transcript, do you believe ftc should look back at mergers, not just to learn from them but potentially to take more enforcement action given what weve seen with instagram and facebook and some of the others and what the market is looking like . Thank you, senator. I dont think it be appropriate for me too comment on any particular investigation or company but ive said before that 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 where were doing that so that is something that is on the table for us and in addition weve issued orders to the major Tech Platform Companies to get information from them are not reportable on the hsr act, we are looking at those two. One thing we discussed in judiciary, the antitrust i cut you off. One thing that you and i discussed and the other commissioners can briefly pitch in here, i look back historically for the ftc, this is not about your decision and when you look you like a shadow of yourself from the 80s from the Reagan Administration and you are dealing with trillion Dollar 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, so grassley and i have a bill to add more resources with filing 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 briefly under briefly say more resources would be helpful the public needs to understand my colleagues need to understand, it shift over time and how its going to be impossible to take on lawyers, trillion Dollar Companies to do all the stuff everyone is talking about from senator hawley on if we dont have the resources . We dearly need the resources, you make a good point in the 80s we were twice the size we are now, some had to do with computerization and efficiency among staff, but still were behind and we do need more resources, were busting at the seams and were having trouble stopping the existing mergers as it is, like i mentioned were on a pace to have more merger and Enforcement Actions than any time since fiscal year 2000. Heres the point for my colleagues that want to be responsible, which we all do, you bring in money, ftc and the antitrust division of the Justice Department brings in money with these fines and we have to look at all of this in the context and whats happening to Consumer Prices in the gilded age that were entering and if we dont do something with the pandemic prosecuting and other things that are going on. Let me respond to one thing in particular. The way that the act is determined, increasing the fees would not go into our budget but you could change that legislatively, we would ask that you do that. Im going to turn to this, but im running out of time quickly, commissioner, are you there . She was going to have to go. I want this on the record but its about the exclusionary practices that we have and the need to update our standards for these mergers and light of whats going on around the country, i can do that on the record. Thank you, mr. Chairman. Thank you so much, senator moran. 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, i will skip those questions, senator blumenthal is in the room and i should ask about data privacy, im going to deal, at least for this round of questions with the ufe you Privacy Shield, chairman simons, the court of justice of the European Union recently validated the Privacy Shield arrangement as a basis for lawful transfers of data with more than 70 of nearly 5300 Privacy Shield companies being small, to mediumsize 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 particular for Small Businesses, i was muted, sorry. Your website, the ftcs website includes an update on the Development Related to the Privacy Shield, it states and continues to expect companies to comply with the ongoing obligations with respect to transfers made under the Privacy Shield framework, the statement aligned with the ftc previous discussions and refraining from bringing any enforcement action in 2015 when the Privacy Shield predecessor was invalidated, can businesses expect a similar reasonable approach by the ftc in terms of enforcement in the aftermath of this invalidation of the Privacy Shield . Yes, basically they are making promises that they are following from the Privacy Shield principles and if they dont, that is a problem under our act, under section five, so companies could say, they can put on their website, there 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, one thing that they might have to delete it or they might have to protect it in the way that they were promised pursuant to the principles. In that circumstance, how did the ftc respond to the business . You mean if they dont . Let me first start, if they do, the ftc would take no action, is that right . That is right, commissioner, let me direct the steel, i would warn that the European Court surveillance in relation to Privacy Shield should not be completed with the concerns about consumer data privacy. However, is it fair to say the enactment of a preemptive federal privacy framework might make a future adequacy determination by the deo, easier . Yes, thank you for the question and i would agree with that statement. Let me ask all in the case, if that is the case, would you support enactment of the consumer data Privacy Security act which provide the uniform national standard, ive seen some of the commissioners have answer that question and other senators dialogue but the uniform national standard, i would ask for a yes, sir no from each of you. Yeah, sorry. Commissioner wilson. Yes, i think one federal privacy standard is incredibly important, the internet does not stop, Even International borders and businesses need predictability and certainty of one federal standard. Are there any other commissioners that have not spoken to this issue in response to my colleagues question. I dont believe i have. Can you hear me . Okay great. I would say i support the idea of the National Floor that makes a lot of sense but id be concerned about a law where the floor is too low or a law that invalidated stronger state privacy statues were prohibited states from having the ability to fill gaps that are not filled by the federal law. Thank you, my time my time is almost to expire. Lets go ahead since we have not specifically heard from commissioner phillips. Thank you, i thought we had from commissioner. Mr. Chairman, i agree that a national law would be helpful, i do have concerns about deleting the state laws, the ftc has dealt with this in the past in terms of working with state la laws, determining if there is complex and determining what is protective and i think we could go down that path to make sure we dont delete states that want higher levels of protection. Senator this is commissioner the lips, can you hear me . Yes. Thank you, i want to echo what my colleagues, chairman simons and commissioner wilson said about need for a coherent and singular federal standard, not only will this help businesses save cost and keep barriers down for smaller too large and compass, it would help with the critical privacy issue that we face, that is consumer understanding, its easier for consumers to understand one standard. Let me think the commissioner for the answer, its a point that has not been made often previously. Thank you. Thank you senator moran, senator blumenthal. Thank you, mr. Chairman and thank you, senator moran for raising the privacy issue, we are continuing to strive for a bipartisan solution which i think should be within reach at some point because clearly his questions and the answers we received and most importantly the feelings of the American People that we need to stronger Privacy Protection and we should continue to work to that end. But as important as new legislation, the commitment to enforce the tools that the ftc has right now on monday twitter disclosed that it faces and ftc fine of up to 250 million for the misuse of account security information for ad targeting, according to twitter this breach lasted 2013 and 2019, six years. And this announcement follows twitters catastrophic and dangerous brief of dangerous highprofile accounts last month, twitter has been under a content order since 2011 for exactly these kinds of problems, in order that requires biannual, in a comprehensive Information Security program, i think that the public is rightly skeptical about the ftc use of its existing tools and its inconsistent in an adequate enforcement of the laws already on the book 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 hearing 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 the purview, i want to ask chairman, can we expect some kind of antitrust action against tech firms that have monopolistic power and may have abused that power by the end of the year end 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, this is the most important thing were doing on a competition side of the ftc which is these investigations of the tech platforms. We formed a new group and the bureau of competition, the Technology Enforcement position specifically dedicated to investigating these types of companies and they are incredibly busy, very active and i have told them what they are working on is the most important thing in the Bureau Competition and they should do it as issued scams that appeared, is really the wild west out there, warning letters lack the deterrent in enforcement value of actions, he planned more actions to stop these consumer scams that exploit peoples fears about the pandemic in their search for treatment and cure. Thank you, senator, we try to do what is most effective and most efficient to get the problematic advertising or claims off the internet. So we are able to get out these warning letters very quickly and so for they have been extremely effective, extremely effective, overwhelmingly the companys takedown the problematic language within 48 hours and where they dont, we initiate Enforcement Actions and we brought a number of those already, today we announced three or four new ones and so we had seven of those already. Let me interrupt, i apologize my time is running out but we know from experience, no from a state attorney general that a warning letter means 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 begin the case all over again. Let me just ask you, finally, on the issue of privacy in the facebook privacy settlement, he criticized the ftc for not imposing facebook executives, dont you believe the ftc should depose Mark Zuckerberg in your ongoing antitrust investigation . I cannot comment on the specifics of any individual matter but it depends on the circumstances what we do, sometimes its important to depose the ceo and sometimes its not necessary, but where its important and helpful we try to do it in the other thing i would say, particularly with facebook, we had emails from lots of lots of people, we did not need to get mr. Zuckerberg in a deposition for that case. Do you think itll be necessary to depose both zuckerberg and jeff bezos . Well mr. Bezos works for amazon and i cannot comment. In a separate antitrust investigation. I cannot, on whether there is an investigation, the only investigation that is publicly known that our group is doing is facebook, that is only because they have disclosed it themselves and were able to confirm that, other than that we do not discuss individual cases. Verna. My time is expired but the credibility, its completely in aggressiveness and it seems to me that the public will be satisfied only if you do suppose the very Top Executive of whatever company you are investigating. Thank you, senator blumenthal, senator barbara. Thank you to each of you for the time to be here today, mr. Chair i think chairman simons you know that the facebook compliance is very important to us in dealing with social media is very important to us, you are hearing a lot about it from letters and notes that are coming to you, we are hearing a good bit about it, i been jumping back and forth from the judiciary hearing to this one, so, let me ask you this, just very briefly, when do you think here going to bring this to a conclusion and are you satisfied that were going to be able to get to a conclusion with the issues with facebook and all of this going back to the 2012 order . There we go, unmute it. So youre talking about the facebook privacy order or are you talking about facebook antitrust investigation. Lets take privacy first and then we can go to antitrust. So the order, the negotiated order subtle lighting order violation against facebook was finally entered on april 27 or eighth 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 are you, waiting you feel youre in compliance or they are in compliance then satisfied with the progress and then ill add something on because the clock is ticking, what kind of legislative balance do you think we need to strive 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 in compliance with it, if there is any problem with it, we will be on and active but i cannot talk about anything in particular about an existing nonpublic. Correct but you are pleased with where you are in the process . Is that what youre saying . Im saying were very happy with the order, we think it was really supportive. 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 tennessean saying theres a lot of conversation around this, what are you going to do about it . , what kind of legislative action needs to happen. I think what you and your colleagues are doing in terms of a new federal privacy legislation is absolutely critical because there hundredyearold statute is not up to the task and doesnt give us authority and we dont have anything looking remotely close to what the europeans have with gdpr. So its really important for your work on the privacy legislation to continue. Ive got another question and im not going to have time to get through this but looking at the validation of the Privacy Shield of the courts of justice of the eu and some of the european Data Protection authority, theyve signaled that they do not receive a grace period for data flow to continue during the negotiation of a successor agreement, like we concurred in 15, 16. So i would be interested to know if any of you have had conversations with any of your gpa colleagues in europe about the importance to both economies of allowing the 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, chairman simons, i will come to you first and if anyone else wants to weigh in, just raise your hand. Thank you, senator, we are working with the Commerce Department and other parts of the administration and we stand by ready to help them in any way we can be useful, they are carrying the water on this and we will have to see what direction they had and we will support them as much as they can. Senator, this is commission commissioner, thank you so much, i really appreciate it. A little bit of context, back up to the decision when it was validated, the u. S. Government and the European Commission were already negotiating and knew what became the Privacy Shield agreement, because of the ongoing negotiation that the european Privacy Authority agreed to do what youre describing which is standdown on enforcement and allowed to continue to transact in data, i share the disappointment of secretary pompeo at this decision, i do not think its fair to hold the u. S. To stander the other countries cannot be, i think the transaction in this data is very important in particular for Small Businesses and we are going to do whatever we can to support the Commerce Department and its effort into continue to hold Companies Accountable to the privacy promises that they make. Thank you, anyone else want to weigh in on this . I am over time, i think you and i yield back my time. Thank you, senator blackburn. Thank you, mr. Chairman and Ranking Member and members of the commission, first thing i want to say, i just want to thank the commissioners for making it very difficult to determine who was a republican appointee and he was a democratic appointee, this is a way that the commission should operate, it is a way that the Commerce Committee likes to do it and its a real pleasure to dig into the issues without necessarily digging into each other. My first question is for chairman simon on credit reporting, what action does the ftc verify the credit reporting agencies are following the cares act provision and what is the ftc doing to ensure the data from insurers are accurately reporting the data question we are monitoring for that if we see a problematic thats a priority. Do you want to add anything with critter reporting 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, what i see as a broken lid appellee, where consumers are the product not the customer, the cfpb are the lead because the Broader Authority but i really want to see the ftc continue its focus on the tenant screening and employer background check abuses because if we see this being misreported, you will see people trying to get back to work, trying to get a new place if they cant afford their current one and they might be blocked from doing it. We have a lot to do but weve got to figure out what were going to do long term about Equifax Trans Union inexperience because it is simply not working, the current system. I think that is right, i think some of the folks who are exasperated by the conduct and by 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, thats not what were doing, were trying to make sure that the error rate goes down and consumers have access to their own information, i remember being in the Commerce Committee and one of the representatives said our error rate is only 3 5 which means many, many millions of people are being prevented from having a job or a mortgage or a car as a result of the heirs of these companies and they just plug along profitably. Commissioner, what do you think you can do under the ftc authority . Just to be candid with you, i think the congress rightfully stripped the ftc of much of its authorities and gave it to the cfpb, ive obviously been disappointed at the cfpbs action in this regard because i think theres much more that they can be doing given the broader authorities that they have, i do want to enforce the f cra including with respect to whether certain large data brokers and tech platforms may be subject to its requirements but i agree, we need to reform the big three credit reporting agencies and it will take time but we need to introduce real competition because it is not working right now. Thank you very much commissioner. Senator capital. Thank you, mr. Chairman i want to thank all of you, for your testimony and for your service, i greatly appreciate the complexity of the issues you are dealing with. In 2015 i lost my West Virginia world rise up program to encourage young woman to take on leadership roles and to build and encourage the future leaders in america, it was a recent wall street journal article that had a study that found 78 of eighth graders, girls in particular were isolated during this pandemic time and certainly understandably so. So it was also quoted that girls between ten and 14 are spending 3 4 hours a day on tiktok, snapchat, instagram to stay connected, children and teens turned to social media platforms to stay connected, what is the commission doing to ensure Companies Collect user data are not violating the children Privacy Protection act, i asked the chairman that question. Thank you, senator, we are monitoring the market very carefully, we given the advice to tech providers in schools and given advice to parents, consumers. Lets see, thats what were doing so far. One of the things that this points to is that we really need federal privacy legislation, this is an area where its not just a matter of are you doing what do you say, its a matter of what youre doing might not be proper even if you dont say anything about it. I think obviously and particularly nobody could have anticipated this, and the availability obviously are two younger children were some parents mightve prevented the use of it or limited the use of it, now its become more difficult to do that because the only way that teens and preadolescents are keeping in touch. Im concerned about that. Im going to shift to another issue to commissioner phillips with the provisions. I know there have been some lack of clarity in terms of what this made in america, what is it mean to you or to a consumer perception, i know you do studies on that, where are we on that, obviously during this pandemic we saw the ppe was being made in china and the lack of availability, very frustrating, were going to try to do something about that here, hopefully in our next cares package, do you have a comment on that . Sure, let me just begin by following, briefly under last question, its important to note that the enforcement under the five commissioners sitting here before you today is as aggressive as it has ever been, that begin with a record settlement against a company that few americans have heard about the time, tiktok, were very glad there under order and continued with her settlement with the new York Attorney general for 170 million in the youtube case, made in the usa, we are continuing to do our enforcement, we had a case recently against williamssonoma and were also in the process of doing a rulemaking, i have to tell you i dissented from that. , it is very much within your power, i did not think we had the authority to make the role we were trying to make, thats a pretty easy legislative fix even though we know it is hard and that is something that congress can address and i support with you going forward. Thank you, im getting go to commissioner, she just gave me a little chat and thats the beauty of technology i just want to echo your comments about the importance of thinking about how our children are being affected by all of the Online Activity that theyre engaging in in a 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 point out to you that it does give some specific authority for childrens privacy but only for kids 13 and under and only basically to get parents permission and to require Data Security, it does not give us the same General Authority to engage in, protection against abusive privacy and data practices that youre referring to especially for teenagers, i hope this is something that congress will think about as you continue to discuss data privacy legislation. It looks like the data coming forward in the last several months is in support of Something Like that. I think i used my five minutes, i appreciate it. Thank you, senator capital. Thank you mr. Chairman and Ranking Member, mr. Chairman, you can hear me . Throughout the covid19 pandemic, we have seen americans come together to support online workers, we have seen the mexicans rally as communities to help their families and neighbors but just as times of crisis can bring out the best in people, they can bring out the worst who target more noble people, that is why we have been seeing this in numerous reports of harmful scams that put consumers at risk and is a former attorney general, and mexico, i know you recognize the need to want to work with partners outside of the agencies, state attorney general have their ear to the ground, they hear from consumers, many are strong protectors of state consumer laws, we working relationship with them, it is essential, thats why introduce the stopping covid scams act to empower federal and state authorities to do more to deter scammers and hold them accountable. My question is, my legislation would allow state attorney general to bring a civil action in District Court or state court to respond to covid related fraud under the ftc act, so a question for every commissioner, do any of you oppose authorizing state attorney general to take action and respond to fraud under the ftc act . This is chairman simons, i dont have any reservations about that at all, agree completely want to echo about the importance of our relationship with the state ag, their boots on the ground in terrific partners and we cannot do what we do without cooperating with them. Thank you. No concerns, i think its a great idea. Terrific. Same. I think we want answers from phillips and wilson also. Senator udall, i would like to take a closer look at the legislation, a lot of our duper and that tends to be a really good thing. , we have baby ftc act and im not sure. Senator i agree with your proposal. Thank you very much, we would like commissioner to continue the discussion and hopefully get to a place where you feel comfortable with attorney general doing that. Thank you. My second question goes to several penalty authority, my bill also enhances the ftc several penalty authority, this is the same bill talked about with regard to the attorney general, currently ftc enforcement begins with an administrative complaint against the potential scammer, then there is a cease and desist order or settlement under current law, the commission can only seek Civil Penalties in court if there is a further violation, this is potentially years of court action, but as weve seen the Current Health crisis move quickly, the mexicans have died due to contaminated Hand Sanitizer with false labeling, families here for their help and willingness to spend their money on questionable products, making false claims, chairman simons, would enhancing the ftc authority to use Civil Penalty Authority, protect consumers in the Current Health crisis . We support that, the other thing i would say, we really need 13b, with that we can go into federal court and get a t tro, injunction in an asset freeze for these fraudsters. Where as Civil Penalties might take a while to get to the court system and we have to get the justice of involved too, that would be the importance but 13b is really important. Thank you for the answer, commissioner as the ftc current toolkit of Enforcement Actions to the present challenge. I think as you point out, Civil Penalty Authority would be enormously helpful, it is really hard for us to go in most cases through that process to get to Civil Penalties and Civil 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, that would be important and the chairman pointed to an issue that gives little notice but is also very important that when we have Civil Penalties, we usually have to go through d. O. J. And i would see those couple through litigating authority on the civil penalty front and i also agree with the chairmans point of 13b which is not only giving us those important tools but also allows us to return money directly to consumers and what we want to do at the end of the day is make harm consumers whole, i think Civil Penalties coupled with 13b authority that is clarified are really, really important to give a big stick, to curb the option, punish companies that has wrong consumers and return money to consumers that have been wrong. Thank you so much commissioner and i have a couple of questions for the record and ill help you and some of these that are taking Real Advantage of consumers in the marketplace. With that i will yield back. Senator udall pgh thank you, mr. Chairman, chairman simons reforming section 230 the Communications Decency act has been highly debated in congress, section 230 is the law like platforms of facebook and twitter for content that the post on their platforms. I introduced a bipartisan bill with senator on this issue known as the platform accountability and Consumer Transparency act which among other things and stipulate be provided by section 230 does not apply Civil Enforcement action brought by the civil government, the d. O. J. Recommended this and publish list of recommendation for section 230, my question, 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 that is fairly common for us to go to court and have a defense put on us related to section 230, it would be very helpful to avoid having to deal with that and allows the ability to not only go after the platform participants but in the right circumstances the platform itself. This i would direct all commissioners that have to do with the bill that Congress Passed last year end he signed into law, the trace act, among other things the trace act required that the fcc register a single entity that conducts private lead efforts to trace back the origin of the legal robocalls and i was pleased to see the fcc did fulfill that requirement this last month, can you speak to the ftcs efforts on engaging with industry initiatives like the u. S. Telecom industry trace back group and whether this Public Private partnership has been successful in identifying illegal robocallers . Thank you, absolutely this is been extremely helpful for us, the trace back organization is very effective and were just overjoyed with the progress. The other thing i will say, what were doing, were going after Service Providers who often serve as the entry point for scammers into the u. S. Telephone network and we sued a company in the december of last year and then we set a whole bunch of warning letters to other Service Providers and said look at this, you may be liable, these people are being sued, you may be next and we think that may have had some impact on a decrease on robocalls since that time. Anybody else quickly . Senator, just add briefly, as you know it also calls for the ftc to be the hospital Protection Group to come up with best practices for state and local governments for telecom and for hospitals to help deal with the particular public that they present. We had our first meeting last week in meetings or continuing, we hope to have a report out according to the timeline indicated by congress. Excellent, thank you. Last question quickly, i think we have a little bit of time left, mr. Chairman, do you expect to exercise and refrain from bringing any enforcement action with regard to Privacy Shield until after a new structure is negotiated and put in place to transfer data from europe. I think what were expecting to do or what we intend to do is make companies fulfill the promises they made under Privacy Shield. If they had made promises which are for Privacy Shield, that you will protect the data in a certain way, when youre done with it you will delete it, those types of things, we are going to and forced into respect to that. My understanding the issue of preemption in California Law has been covered extensively alrea already, but my time is running out, i will defer that one and perhaps maybe have a question for the record about that. Thank you, senator. Thank you, mr. Chairman, a recent press release noted that Online Shopping complaints that the ftc has received during the pandemic have surged. The ftc has pointed out a shopping online guide that recommends Online Shoppers get the physical address and Product Description closely, these suggestions seemed aimed at ensuring the buyer has the same information shopping online during the pandemic as they would if they were shopping in person. Before i go further, i would like to ask each commissioner if they agree generally American Consumers should speak the same information shopping online as they do in person and if you could briefly answer, yes, sir no starting with mr. Chairman. Yes. Mr. Phillips . They generally speak the same information. Yes. Yes i agree. I think i missed ms. Bulimic carryon. I know many Consumers Want to buy americanmade products but they cannot 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 Location Information that in person shoppers have, i introduce the online act with senator rick scott back in may, the bill requires Online Sellers to provide the country of origin for products that they are selling, with more and more Consumer Online during the pandemic, this transparency is more important than ever, commissioner, can you please share if you are supportive of the goals of my cool online act and explain the role that you see the ftc playing in this important issue for American Consumers. Yes, there is no question that theres so many products where Consumers Want to know where they were made, particularly during the pandemic, i had discussions with many major ecommerce platforms, ive been very concerned that they are not listing the country of origin except for textile, wool and other things that they are required to and i think this needs to change, they should disclose country of origin for those goods and as much that they are lying about it, and enforcement liability, this is a good way to create more information for consumers. Thank you, in april i joined my colleague senator hawley in sending a letter to the commission urging an investigation into consolidation of meatpacking and processing industry. In the impact on consumers, farmers, workers internation 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. The pandemic has brought many of the issues into stark relief, the concerns about that had been simmering for years. Commissioner, i know the previous question in this hearing about consolidation and limited packing industry but i want to know if you agree that concentration has contributed specifically to Workplace Safety issues and pricing issues and what you believe the ftc as well as other federal agencies can do to address these problems . Yes, i agree, it was 100 years ago that the ftc reports exposed a lot of the abuses by the food in the meatpacking industry in particular, in 1921, congress stripped some of those authorities to enforce those laws for the ftc but we still retain our industrywide Investigation Authority under section 6b, i think the usda needs to increase its enforcement and its rulemaking to change the undo preferences, standards are going in the wrong direction and i think the d. O. J. , all of us need to really be cracking down, it has some real impacts for those eating at the table as well as those working, and everyone in the Food Industry i did note that she said she had a comment with the chairmans indulgence. Thank you, i appreciate the opportunity to address this issue, i think consolidation may be a concern, one of the significant issues, we may not perhaps be paying significant attention that the laws and regulation that are designed to apply to the larger Food Producers and meat producers imposed significant promise in issues when theyre applied in the same way and farmers in smaller farmers need to grapple with these massive compliance costs, not even designed for them and having to exit the business, whether they pass a book called everything i want to do is illegal, so i think revisiting is a way in which we regulate Small Farmers, could have reintroduced more competition into the food sector in the United States. Thank you, thank you very much, our next question will be senator scott but we heard there was a question can you hear us . I can hear you perfectly. Thank you, chairman. Just a followup on what senator was talking about, i introduced the act which will require online retailers and i joined with senator baldwin to introduce the labeling online act and the authority over the laws. The prime act would require that stores to display the country of origin in the marketplace, when consumers know what apps they download so funds are developing they can make good decisions. We have seen this just recently with tiktok. I am concerned and i think all of us are about companies influencing control by the Chinese Government like tiktok because under chinese law they have to adhere to the demand user data and content the government wishes and weve seen that with tiktok. Our 100 yearold statute is based where here is where we are doing and then they dont do it. Have you proposed legislatio legislation . Have you seen what has been proposed. We have assistance on a bunch of statutes and id be happy to provide that to you. What senator baldwin and i are doing. Do you think its the right approach that our goals have been accomplished if we can get this past . I have to consult with staff i havent had the opportunity to look at this in detail. Senator scott, what challenge . I support one that is the emerging issue among the Technology Community for the country of origin for Software Code this is obviously something the dod and Commerce Department is extremely important but it will be a more emerging problem and with nonstate actors. Whenever we talk about enforcement and that is very important for us and as we Cross National boundaries. Do you have the ability to require online retailers with country of origin . And with that difficulty. My understanding is that we have certain rulemaking authorities that could be used for that. And those certain statutes that directly require country of origin labeling for textiles and other products. To make it much more expedited. I do believe more Information Available to consumers will allow them to evaluate the quality that may be offered to them. Thank you senator scott. And to each of the commissioners the first question is for commissioner phillips. On june 5th the largest Healthcare Provider with the data breach occurred in january they found around 6000 had information to expose as a result of the breach and has Health Information dates diagnosis codes and procedures and treatment locations and prescription information pretty extensive information. So just get on to discuss the need for Data Security in particular, know that this is constantly evolving in a rapid fashion what does the ftc in congress do to ensure they are doing all they can especially when it comes to patient data . And with a very specific Legal Authority to make sure they are protecting the data that they have and Civil Penalty Authority. My view is unfortunately we dont have the people that could sufficiently protect the data. And those externalities. May i ask something . One of the things we need to confront is there is a change in my view of the last ten years the impetus of personal data was Identity Theft to open a credit card at a Department Store in someone elses name so what we are seeing is something very different marriott, eco 51 equifax Justice Department said these were not necessarily identity thieves those were state and nonstate actors related to china and now we need to be thinking about safeguarding our entire Data Security even in the commercial context to make sure adversarial parties cannot collect detailed dossiers but for the purpose to weaponize and interfere in the country. I think the stakes are much higher and the harm is on a different dimension even from two years ago. This is commissioner wilson. This highlights that we need to confront. Privacy legion one legislation is to sides of the same coin and its important to remember that many Healthcare Providers in the United States are affected by the nonprofit so they should gain jurisdiction to have authority over these nonprofits because they do has Sensitive Data so its another reason to have positive legislation in place to protect consumers. Clearly. And as this information is becoming available but others, please weigh in according to media reports data brokers are selling and buying data from americans phones and tracking americans that protest store places of worship. While smart phones allow customers allow enough to have location data they have no ability if they sell that information to third parties. Do you believe that americans have control over secondary uses and sharing their data and what is the ftc doing to address this problem . This is a really good point. No i dont believe they have enough control but that current framework and is supposed to tell you what they are doing and youre supposed to say yes or no but that this is a lengthy and unreadable privacy policies the consumer has no choice but to have access to service some provisions are not others for those tertiary uses and it doesnt reach that kind of behavior that is problematic and in the commission should think about where we can apply whether it is standard enforcement or the Rulemaking Authority because as the commissioner pointed out it is probably some problem some men not just to wait for congress to act because these things are happening now in real time. Could you let other members answer for the record. Thank you mr. Chairman the ftc first implemented the rule in 2004 after Congress Passed the fairness the compact lens rule it simply requires prescribers to give consumers a copy of their contact lens prescriptions. The reason is simple. Contact lens consumers as the ftc has reiterated need to have the opportunity to shop around to find the best deal. Senator klobuchar and i raised questions that this wasnt properly implemented. And with the new contact lens rule and with that kind of protection. And there are some efforts underway to delay the support rule. And if this was delayed. And with those economic hardships couldnt consumers end up being harmed and making it more difficult and contact lenses from a retailer of choice at a lower cost . Thank you for that question. Absolutely. The whole purpose of this rule. [inaudible] are you still there . You said the whole purpose to the rule and then we lost the connection. Can you hear us . You are making such a poor point the analogy went out. [laughter] and he was emotionally overcome. And two other members of the panel then we will move back when we hear back from him. So optometrist argue in some cases, not all cases and some have argued they cant do that because in that would be not be disinfected between uses. And then pay basically practicing sterilization. And then the contact lens rule that we promulgated but as you noted earlier the concerns that have the degree of competition in the market and then with contact lenses. And then by other sellers. In your statement of schools that congress could go further to empower consumers. And against this market protectionism . Perhaps we want lost the commissioners well. And then to talk briefly about another issue. Our country is in a nationwide debate regarding censorship among big tech firms. The platforms it has the ability to connect hundreds of millions of people and allow for the rapid dissemination of ideas and opinions. And to know what opinions are dangerous even without any technical expertise. And that is to protect all viewpoints many members if Congress Must amend current law and if they play a role in that. If you are back chairman evaluating whether a tech company follows the terms of service but have than evaluate is much broader and with political bias and neutrality how do they go about evaluating . We are informed the chairman had to log off and try to log back in. Are you back on mr. Chairman . Maybe that has not been accomplished. I have the same question of commissioner phillips. Content moderation is something a lot of small firms face that we all recall about the possible shooting at the synagogue in pittsburgh was communication on a platform. Its a difficult question. At the end of the day when it comes to moderating speech something we have always taken into account with any work related to the content of speech act over decades and of course the First Amendment is something we have to keep in mind moving forward. Thank you mr. Chairman. Senator chester . I love this committee this is a great hearing i appreciate the commissioners i just want to make a statement. Number one come i cannot believe how people are about textiles and electronics but yet we dont give a damn about the food we put in our body comes from. So labeling for food at least online and then second with commissioner rosens point you are absolutely correct and with the food modernization act to exempt Smaller Companies guess you acted like the world would end . So the question is that deals with consolidation in the past industry and from that perspective. This is not the overstatement and they are going broke and it will change the food chain and from the consumer standpoint. And then to put forward some new rules and then they came back is not worth the paper its written on. So what is your recommendation for folks and consumers . I just have to say in the commission to the usda i think that will legalize a lot of the worst practices that allow them to read the weights and measures and then penalizing farmers for doing it. There is work how that is working in there has been almost no enforcement on some of these things. Also on country of origin labeling it can come from overseas that comes into a factory of the meatpacker it can be labeled usa and is totally inconsistent with every other country of origin standard and feels like a giveaway. You are correct and then those people suffer and the consumer doesnt know the difference so the question i have for you is there anything the ftc can do about it . I would Push Congress but im happy to share more with you and your staff later. Our authorities are much different versus other types of meat the Justice Department does the antitrust work. And the food delivery or the supermarket or exploitation of farmers. I just want to share. One of the reasons we see for more poverty or more opioid issues is being unable to sell and make a livelihood those who raise it cannot get it to market and that will be devastating. And then not enforcing the rules. We need to make them work. So thank you for your work. I was home this weekend i could harvest a little bit but i could replace it because my combine is 15 years old today its a different story. Because of the technology in it. By the way this is not about cell phones. You can throw that he himself away. I care. That cost me 300,000 to buy a combine. I can get a new phone at 300. So give me some input on what we need to be doing on the right to repair stuff. Because once again production and agriculture and consolidated in the ground and top to bottom and will ruin it from the disk on for this country. Thank you for the question. Iletter iletter a agree this is an issue the ftc has explored there are competition issues and those bedrock is that you are not tied to manufacturer to do repairs on your equipment the Massey Ferguson tractor out here in West Virginia and my husband broke a couple of bands using the chapter on the chipper because the dealership here is great so the right to repair is important. I see laughing. But at the same time there are legitimate Consumer Protection concerns with respect to certain products with you put the wrong battery in it could explode. With the ftc as it has done with the contact lens rule is to balance the benefit of competition from products that are harmful, but i do believe that you are correct the manufacturers of safety concerns in fact not to protect consumers but competition for repair in the aftermarket. That is just another cost Small Farmers are facing and we need to eradicate. To say i appreciate the bipartisan work this commission does. Thank you. Hello. Thank you chairman for holding this hearing today and thank you to the witnesses for being here the pandemic create significant challenges and Small Businesses. Scammers are using the pandemic as an opportunity to defraud americans. This week patients were alerted they were on people were posing as representatives to steal information. This is one example of scams. According to the ftc those that had millions of dollars of losses but the scam also in danger the health of the public to prevent or cure covid which we know is not true. And also working with the ftc to protect families and Small Businesses the chairman is a back on yes i will direct my first question to the commissioner. I introduced the act with the authority during the coronavirus pandemic to increase several criminal consequences and federal penalties to lie to the general public. Do support the goals of the legislation . I had a power outage at my house and now im on Battery Power so im a little bit in the dark here. But i do support the goals with that legislation absolutely. But in terms of legislative priorities from the standpoint your thoughts are invaluable. Senator i never like to speak for the chairman, but i believe what he probably would say is that he would welcome congressional action on section 13 be to make sure we can get the illgotten gains and return money to consumers. He can correct me later if im wrong that thats what i believe he was going to argue. Thank you for stepping on that we will follow up with him after the hearing for details. Can you hear me now . So the goals you are talking about is extremely important that is part of the ftc never more important than bad actors pray on vulnerable consumers to imperil not only their wallets but health and safety i applied you for working on that. And continuing to work with your office in colleagues on thes issues. With the coronavirus pandemic many are struggling to get by. And then to take that difficult advantage a Small Business can you tell me what the ftc has done to protect Small Business and what do they know over Financial Assistance right now . There are two actors in this space include one very recently we believe were violating the law to profit off of their pain. One of the things that is concerning to me is the contract terms that are completely unfair and how they are executed essentially require a Small Business owner automatically plead guilty. I know they are struggling. Many Community Banks are going after assistance that going after thes loans is just setting Small Businesses up to fail and we cannot have that. Arizonans are targeted by covid scams. And given the increase of scams what authorities do you need . Thank you center is an important question as my colleagues have noted the ftc has been doing this work in the under resourced way for several decades and hasnt been felt more than it is right now with all pandemic related issues as well as the work of the commission. And then to put a very good use on behalf of the american peopl people. So the two things under the ftc act the provision that allows us those illgotten gains and that is one of the most important things to do and that is under attack with the courts and it is enormously important in the penalty authorities that can help us in our negotiation to keep it from happening in the first place. That money goes into the treasury. Thank you mr. Chairman for holding this hearing today. I yield back. Thank you senator sinema. I am not sure if that your man is on thank you for being here today and commissioner you exemplifies that they are trying to balance work and childcare i appreciate you sharing your babies with us today and the reminder of all the important work you have to do to protect for the next generation. And then that 30 percent of nevadans with that are hispanic or latino in targeted members of the communities to the immigration process. While the public notary performs the duties they cannot practice or give legal advice or accept fees even though they are not qualified. Only a lawyer or accredited representative so therefore so many are falling prey to the scams. In response the ftc had a graphic novel to raise awareness and the chief Deputy Attorney general stated the scams are expanding even broader to our communities. And with the 2015 campaign increased awareness let me say we know that friday is rising and with other types of outreach to protect individuals so how are you working with those state agencies and communities . And how easy this was in all those are trying to juggle childcare. I appreciate the support for everybody. It is hugely important issues paying attention to scams among the highest priority and with the outreach that we do to work with our partners and we often hold local Events Community organizers to help prevent people for falling for the scams before the event come up. When it comes to fraud this has been an ongoing problem now. It is pretty difficult to enforce on a one by one basis with more criminal sanctions and what we could do to go after the plumbing of the rings of the mob like fraudsters . We need to look at how they are moving money. We need to look at this more with cracking down on the mob mentality like organized crime rather than one by one. And then how this invades so many states across the country and look at this systemically and not just one by one. And those that have been affected have gone and i look forward to working with you and the coronavirus hits the economy harder than any other state in the nation are unemployment is over 30 percent in april. Our averages 15 percent half a million nevadans for Unemployment Insurance we see scammers and criminals and can take that personal identifiable information and the impact it cannot be underestimated they are waiting on Unemployment Benefits because they have to wade through scammers or whatever you want to call them. As the agency is charged with protecting information there was a significant role to play with the Law Enforcement initiative the consumer to protect information. So let me ask, i think the chairman is on. So how much time and resources . I can see everything on my screen. I do believe the chairman has joined. And how much time do we have to devote to this . At the hardworking people cannot pay their bills and those we are using on unemployment. Chairman simon . The power went out and then my jet pack went out i have another battery supply. We have two different types. One we are suing people over this stuff and then we have outreach at all levels may have the ftc that deals with the scams relating to coronavirus including financial. Books are out all over the place doing media and town halls there was one effort that participated with 800,000 people that participated its all regional offices and they are out there all the time doing this kind of thing and then online and bringing enforcement action. This is my final question is there a rule for us to partner and during this pandemic everything is turned on its head you may not partner with them. But in this extreme make case everybody finds what you could do for those are suffering with some potential fraud. One thing i would say we have all kinds of partners in terms of making our work productive and effective. I dont know why we couldnt see if there is something we could do to stop this from happening. May be there is a way we can get some help out there. You have your power up and down we are all in and out with technical difficulties the thank you to everyone for the hard work that you do and that considering with all the challenges to conclude the hearing it will remain open and during this time the senators are asked to submit any questions for the record and the answers to the committee as soon as possible. Thank you again we are adjourned. [inaudible conversations]