Good morning. The committee will come to order. Thank you for joining us today. Im pleased to welcome federal trade commissioner Joseph Simons and commissioner chopra. Batting. 100 so far . 1000. Its the cupping im thinking of. It has been more than seven years since the ftc has appeared before this Sub Committee. Youre right. Its overdue, and ftc is one of the most important agencies this Sub Committee funds. And its only gotten more important over the last few years. You have enormous jurisdiction. Policing most sectors of our economy for bad behavior. You crack down on abusive robocallers. They investigate data breaches that expose sensitive personal information. They analyze consolidation in the health care market. Helping to limit abusive pricing for essential drugs and health services. Perhaps at the front of mind they are the top cop on the beat for Consumer Privacy violations and other issues in the Technology Sector. This is something everyone worries about these days. Democrat and republican. With a Tech Companies respecting the privacy choices of their customers or choking off competition by favoring their own products or buying up competing products, weve seen some promising actions recently. The ftc certainly did not take a summer break. In the past few months theyve finalized high profile settlements with facebook, youtube and equifax. They launched an antitrust investigation of facebook and possibly other companies. We recognize the challenges the ftc faces in policing such a larj swath of the economy. Thats why this years house appropriation bill proposed an increase in ftc funting. A bump of more than 10 . Part of the reason were here is to understand how the ftc can invest the resources wisely and get the best bang for the buck for consumers. It is also our duty as appropriators to determine if the ftc is excusing the existing resources as efficiently as possible. Consider this summers facebook settlement. Yes, 5 billion is by far the largest privacy settlement. But it doesnt seem to match the magnitude of the privacy violations. That fine does not represent even a full month of revenue for the company. Its not clear that the corporate changes the ftc secured will head off future privacy violations. We could raise similar points about youtube or questions why the equifax settlement over one of the largest data breaches in the history included only 31 million for alternative compensation. The economy has transformed dramatically in the past decade. The companies we poir about today are structured differently than the companies of concern in the past. What we want to know is this. Can the ftc do better . Can it win bigger monetary settlements to provide greater redress to consumers or send clearer signals to the market that the u. S. Will not toll trait anticompetitive or Deceptive Behavior and there will be severe consequences if that does happen. We look forward to hearing from the chairman the commissioner. Before i turn to the witnesses i would like to recognize mr. Graves for his opening remarks. Thank you, mr. Chairman. I appreciate you holding this hearing today. Mr. Chairman, thank you for being here and commissioner as well. Look forward to hearing your testimony, and i think we all know the federal trade commission basically has two primary missions. The first is to protect consumers from unfair and deceptive and fraudulent practices as the chairman discussed. And this includes protecting americans from Identity Theft, false advertising, those dreaded telemarketing calls, the unwanted telemarketing calls and certainly scams against the most vulnerable our elderly that are in our communities, and our Great Service members. The ftc makes sure our markets are open and free. Mr. Chairman, i was thinking about your comments. Its been nearly seven years since theyve been before us. There may be a reason for that. And thats since 2018 nearly 95 of all their decisions and their work on the commission has been unanimous. We dont hear about that a lot knowing this is a bipartisan commission. Congratulation to you on how youve worked together. I know theres still 5 out there where theres tremendous debate and we expect that. As we become more agadependent technologies, these challenges, its important that Technology Companies that serve americans act in an open and transparent manner. That the Technology Sector protects Consumer Privacy, and that they do not conduct anticompetitive Business Practices whatsoever. And however as a regulator the ftc must be careful not to stifle innovation while conducting the important work. Its a difficult balance you grapple with every day. Because weve all seen in the past that overregulation of industries can hurt the Economic Growth and openly hurt consumers as well. Mr. Chairman, thank you for having this hearing today. I think it will be informative. I appreciate the chairman joining us and commissioner as well and look forward to hearing your testimonies. Thank you, sir. I would now like to recognize the chairman for his testimony. Thank you. Chairman kwigly ranking members graves and members of the Sub Committee. Im pleased to be before you to testify about the commissions work and funding requests and particularly alongside my dear colleague, commissioner chopra. This is an independent agency with a broad mission, to protect consumers and maintain competition in most sectors of the committee. On the Consumer Protection side were pursuing Law Enforcement on privacy and Data Security matters including record breaking settlements with facebook, google and youtube and equif equifax. We mainly used a 100yearold statute section 5 of the ftc act to bring our privacy and Data Security actions but our authority under section 5 is limited. These limitations have a critical effect on our ability to protect consumers which is why we urge congress to enact privacy and Data Security legislation enforceable by the ftc which dwrgrants us Civil Penalty Authority and jurisdiction over nonprofits and common carriers. We bring a broad range of Enforcement Actions addressing fraud against older adults, Service Members and other diverse and underserved communities. On the competition said, Enforcement Actions in the pharmaceutical sector continue to be a big priority for us. Cases like our pay for delay matters protect generic competition which helps keep down drug prices. To address concerns about the power of big tech, we have created a Technology Task force within the bureau of competition to concentrate our expertise and better investigate conduct by Technology Companies. I want to thank this committee for the additional 40 million for the ftc that is in the house fiscal year 2020 Financial Services and general government appropriations bill. I assure you we will make good use of that additional funding. Although 40 million is a very large number, more than half of it might be needed to cover mandatory compensation increa s increases, step increases and noncompensation costs related to our Agency Operations such as our consumer sental services contract, our Litigation Support service and our additional Expert Witness fees. The remaining portion of the 40 million would likely be used for adding additional personnel in the neighborhood of 90 fte. We would focus new additions to prior areas such as privacy and enforcement agents, hiring more technologis technologists, doubling the size of the Technology Task force and hiring for economists. Finally, but significantly, while principle differences among commissioners occasionally lead to split decision, some of them high profile ones at that, the ftc works in a bipartisan fashion. And we will continue to do so. We are committed to using every resource to effectively protect consumers, and to promote competition and we look forward to continuing to work with the Sub Committee and the congress. I look forward to your questions. Thank you. Thank you all. I appreciate you holding this hearing today. I am chairman chopra i am honored to represent the federal trade commission. I welcome the oversight. I know it makes agencies stronger. As congress tackles some of the Biggest Challenges facing our economy, our society, and even our national security, the federal trade commission should be a critical piece of that puzzle. The stakes simply could not be higher. For example, how are we going to combat pharmaceutical industry abuses that contribute to out of control drug prices that mean the difference between life and death for patients . What can we do to make sure that americans can get a fair pay raise in a competitive job market rather than being squeezed by employer consolidation and noncompete agreements . How are we going to reverse the worry somedecline in new business formation and make sure that american entrepreneurs are not blocked by incumbents protecting their turf. How will we safeguard Sensitive Data from abuse and misuse from those seeking profit and those abroad seeking to do us hard. How wi congress is currently considering an increase in funding for the ftc and i share the chairmans commitment to use every resource effectively so that we deliver real value for the public. The ftc hearings that convened over the last year were a reminder of the importance of selfcritical analysis. We must always be serching for ways to be more effective. For example, what can we do to leverage the resources and authorities of our federal and state Law Enforcement partners to win full redress for victims and accountability for corporations and their executives that broke the law . How can we codify existing policy guidance and case law into clear rules so we can seek stiff penalties to be returned to taxpayers. What more can we do to protect honest businesses that play by the rules but are harmed by those who chaet . Were thinking about new ways to use the authorities and resources that congress has entrusted to the agency that solve real problems in our markets. We appreciate the opportunity to work with you to tackle these challenges and opportunities and i look forward to your questions. Thank you both. Again, thank you both for being here. Commissioner, you and your fellow democrat commissioner dissented in the youtube and facebook settlements. Could you give us a deeper dive as to the reasoning for your dissent and what you think the ftc can do differently or better to address these issues . Sure. The Facebook Corporation is a major governance and managerial challenge. They have serious dysfunction and they repeatedly violated the 2012 ftc order almost immediately. I was not happy with the outcome of the settlement. I think that it provided a blanket releases of claims that were unspecified. There is not a deep its not just the money . Or is money part of it . Well, it will 5 billion, while it is a record, is it going to change a firm that makes that amount of money very, very quickly in this is one of the largest corporations in the world. And wall street reacted. They didnt actually find it that big of a deal. Most in Silicon Valley who analyzed that business didnt see it as that significant. I outlined the concerns and since the time we finalized that settlement, weve now heard of more and more problems. You know, just recently just a few days ago 64,000 apps suspended we learned from the Massachusetts AttorneyGeneral Court filing you know, question learned about phone numbers in fact it keeps going and going, and i am concerned that the core problems in that firm are not fixed. Mr. Chairman, i want to ask your thoughts on that and more importantly, the ongoing issue this that settlement was discussing. And if you could add into this discussion if these decisions onsetling are because of a risk of losing in court, and if theres something we can do to mitigate against that concern . In this case i dont think it had anything to do with the risk of losing in court. To give context, we do not have the authority ourselves to fine people. We have to go to court and get a court to agree to the fine, and to any other additional relief. So in this case i think theres a widespread view that if we had gone to court, if we had spent years in litigation, and if we had won, the relief that we achieved in the settlement was far greater than any court would have likely granted us. So in terms of whether the settlement or going to litigation was the right choice, i think its clear. The settlement was far greater than we could have gotten in litigation. And theyre now under well, actually, hopefully soon they will be under order when the court signs the papers and finalizes it. And once that happens, then theyre under a much stiffer regime than they were previously. The other thing i want to say is in terms of the 5 billion, that is about 22 or 23 of their profits from last year. I mean, taking that much of someones profit is should be making them think about how they run their business. Is there something besides the fines that can change behavior . No. I want you to elaborate on that. Absolutely. Part of this another big part of this settlement the is injuktive relief. Weve got a new committee of the board thats formed that deals with privacy and is only composed independent directors. We have a requirement on mr. Zuckerberg that he is certified quarterly. Theyre in compliance with the Privacy Program thats mandated in the order. He cant just stick his head in the sand. He gets mandatory information flows which he has to review. Theres a very beefed up Third Party Assessor thats in here. We have the ability to hire and fire. That assessor has access to the mandatory information flows the order requires. And then the ftc itself has the ability to monitor, too, more stringently than weve had in the past. Thank you, mr. Graves. Thank you, mr. Chairman. Well talk a little bit more about antitrust and facebook and others. Something a little more pressing for me as because weve been hearing a lot about it in the news is sim swapping. This is when a bad actor, pretends to be somebody, calls a Telecommunications Company and convinces them to activate a sim card on a different device, and then that allows them to basically have mobile Identity Theft. And have access to a persons phone, oftentimes Bank Accounts, applications, all kinds of things. Whats interesting is the ftc actually responded to this over three years ago. And theres a blog that was posted about this very thing. But it seems to be intensifying, and more active. In fact, jack dorsey suffered this a few weeks ago himself. And his phone was taken over. Can you give us an update . What role do you have in this . And what can consumers do to protect themselves from this and mr. Chairman, ill start with you on that. We share your concerns. This is a big problem. It enables fraud centers to access phone calls and text messages, get personal information, get potentially get into their Bank Accounts and other important aspects of their personal lives. So this is a this is a serious problem. We did provide and do provide on our website guidance to consumers on this issue. And we continue to monitor this issue very carefully. So this is something were focussed on. Is there anything the only i think id add as two factor authentication spreads which is generally a good thing, most people are using that through their personal cell phone. Obviously thats now a big vulnerability the more someone can dig into that phone. So for me, i think of this broader issue of Identity Theft as really problems in our Data Security infrastructure. And that has huge impacts on commerce, national security, everything. So if we dont take this seriously, we cant quantify the harm that can come from this. The twostep verification doesnt really stop a sim swap. No. But it it might help with an application or such. It makes it more damaging. Right . It doesnt stop from reading somebodys text messages, changing pass words on a phone and other things. What can the federal government do to protect consumers from this . I think consumers are doing everything they can. Technology is moving very rapidly. Theyre trying to protect their own identity. Maybe theres something we can do in terms of encouraging the carriers. A lot of what enables this is that the carrier of the scammer the fraud center is able to get enough information that when you go to the security questions theyre able to answer them. Maybe we need to think about how to make that more secure. Thank you. And mr. Chairman, if i could, i have one other question related. Because another issue thats sort of been on my mind a little bit, as it relates to chairman and i both have this similar position about Cyber Security and some of the threats we face as it relates to protection of privacy. Thats why im bringing up sim swaps. We had an fcc meeting recently that discussed geolocation data being sold from the same companies. Without a consumers knowledge. The ftc has some jurisdiction here as well to take action against those that are engaged in the unfair deceptive practices. Can you give us an update as to what involvement you have in that area . Sure. Were concerned about this area as well. Location information is particularly sensitive because its its unthorsed sharing can create safety concerns. Stalking, for example. We do not have the jurisdiction to bring cases against common carriers. And weve asked for that immunity to be reversed and for us to have jurisdiction. Weve brought several cases alleging unfair and deceptive practices in connection with this problem. For example, we allege a popular flashlight app shared information. And we have several nonpublic investigations going on right now regarding this issue. Thank you, mr. Chairman. Mr. Torez. Thank you, mr. Chairman kane ranking member. Thank you for being here. In your descending statement in the youtube settlement you noted the Commission Already has Strong Authority over childrens privacy under the childrens Online Privacy protection act. But has failed to use the enforcement tools at the disposal to effectively deter actions that infringe on childrens right to privacy. So i was very surprised to learn that on monday, ftc officials actually suggested weakening restrictions on how data can be collected from users who watch videos aimed at children. How would this move impact childrens privacy and Legal Protections under the law currently . Well, this i have not reviewed the statement that was made by him, but i dont he does not speak for me or any other individual, commissioner. I do not agree that we should be moving toward any sort of weakness. We are doing a review, and if we do weaken the rule in a harmful way, thats not something i would want to support. And obviously congress will have to review that and has the right under the Congressional Review Act to overturn it. So i think we should go into it looking for ways to actually make sure protections are stronger, and that we can have the tools to deter the worst type of behavior. We are already seeing how mass aaccumulation on children is lucrative, but it can be harmful and misused. We should take that seriously. Having seen every abuses at every level, specifically has it relates to foster children and being a grandma of a fouryearold, i want to make sure this issue doesnt go by the wayside. We have to do everything that we can to protect the future of children. And their identities. California Consumer Privacy act ccpa is considered the most expensive privacy law in the country. It will take effect on january 1st, 2020. Congress and state legislators are working on legislation that would provide baseline Consumer Privacy protections in the u. S. Have you reviewed the California Law . Yes, i have. And are there any elements of that law that you think should be adopted at the federal level . Well, theres a lot of details to the law, but just some things that come to mind. Theres a very clear way of deterring and penalizing firms that engage in violations, and theres a different level of penalty for willful or intentional violations compared to unintentional ones. I think making sure that theres clear liability for those who violate the law will create the incentives in the market to actually protect data and not abuse it. Theres also some new Consumer Rights that are part of it. I think all of that is good, but we also need to make sure were looking at how to attack the underlying incentive that is about going remits to collecting geolocation data. All of this data is monetized. Thats the Business Model that is impacting so many of our problems online. This is an issue that its zero tolerance. If you accidentally swipe your card and know that theres zero balance on your checking account, the bank is not forgiving and says, its your first mistake. Were going to waive all fees. The Credit Companies dont give you a break. Youre punished by it. And it should be in the same line. Zero tolerance for that. The ftc often works with state soern generals in cases. Will the California Law or other state privacy laws impact the commissions work in any way . Im happy to i always think its good when state ags are with us. They often have authorities and ability to get penalties so for me, im really encouraging more state action when it comes to going after some of the abuses in the tech area and were seeing more laws being passed and thats going to give us more leverage at the table. But obviously a federal law will help us as well. And just really briefly, you probably wont have time. I just want to put this on the record for you. In recent years consumers have reported an increase in Online Hotel Bookings scams when Third Party Vendors falsely claim to be affiliated with or proprietors of a hotel. So im curious to know what actions the ftc has taken to combat the scams. Its an issue that comes up often in my district. So same as facebook, zero tolerance. This is the same type issue where you have like pages. Go ahead. Its obviously a problem, and these types of scams, one of my concerns is that they are heavily facilitated by some of the advertising models of the larger firms. Because they dont really police a lot of this content. So i saw this firsthand with all of these student debt scams that started several years ago. And most of the ways they were reaching people were through google and facebook ads. So google and facebook claimed they have no liability for it. But we have to really look at that, because often its their platform. They should be held liable for it. And theyre monetizing some of that, and their Business Model is to get people to take action so they profit from it too. Im going to move onto mr. Joyce, but ill let the chairman comment on that as well. I was just going to say that one of the things we do is we go after not only the fraud person but the people who helped them. Thats consistent with what youre suggest so question. Mr. Joyce. Thank you for being here today. Service members like all consumers are potential targets for fraudsters. Military families frequently relocate many Service Members are young, living on their own and earning a paycheck for the first time. How big of an issue is it fraud against Service Members . Its a big issue and priority for us. We have recent cases where weve had Enforcement Actions against for profit schools and their lead generators. They posed as being associated with the military, tricked people who wanted to enlist in the military, took their information, used it as leads for the for profit schools. Implied the for profit schools were associated with the military and would help a military career. Thats just one example of what we do. Another thing that we do is we run a website called military consumer. Gov. It has all kinds of helpful information. Identifies scams, how to avoid them and helpful things about how to set up a budget and things like that for Service Members in various points in their careers. Its probably hard to quantify, but do you feel you are reaching Service Members who need this information . What else can we do to make sure these people arent being targeted . I think were doing a pretty effective job, congressman. I would just add Consumer Education is really going to have its limitations when it comes to reaching Service Members and veterans giving pce orders, all of that. Consumer wants to be educated or has to take some yeah. I think sometimes we need to focus on what are some of the incentives that are driving the targeting of military families . Chairman simons mentioned our actions against lead generators and schools that target them. One of the reasons those for profit colleges target them is because of a rule, a law by congress that says you need to get at least 10 of your federal funds, of your revenue from outside of the department of educations program. Guess what some of these schools do. They go hard after the gi bill and go hard after the dod military tuition assistance. Theres a Cottage Industry of companies that are just trying to go after the military. So some of this is we need to address that incentive and look, i think at criminal sanctions for some of this behavior. Because when we are leading to so much financial distress for militaries, what are the impacts . They lose security clearances. Theyre more likely to separate. The dodd did an extensive report on this. We need to act especially when it comes to the for profit schools that target them. We screwed up passing the law. We need to do something to fix that . Yeah. And Everyone Needs to enforce this. I mean, the department of education has just allowed this to go on for years and years under multiple administrations. And they need to fix it too. Its a very good point. Thank you. I know the ftc also operates a do not call registry and collects consumer complaints. I understand youre working with the fcc, who regulates the Telecommunications Industry on reducing robocalls. What actions are being taken against telemarketers that are inappropriately targeting americans . This is a multifaceted approach. Obviously this is a very high prior if i fity for us. We do Law Enforcement. We had a big sweep a couple months ago involving a large number of state and local Law Enforcement partners. So we do that. In addition we are looking at the entry point for the robocallers to get into the system whether its a void carrier or a common carrier. It puts a plug in for getting rid of the common carrier exemption. I think to a significant degree, some common carriers may be facilitating the robocalls. If we had jury diction, we could get at that. Those are the the other thing we did is ran a Technology Contest which in order to generate solutions for robocalls, and that produced several different technologies that are actually on the market now. One was called no more robo and the other is robo killer. The last one, im very excited about that one, because what that one does is it answers the call with a bot and just keeps the caller on the line wasting their time and money, not yours. I certainly appreciate that. Do you forsee it . I know im about hout. But do you see when americans can expect a reduction in robocalls . Thats hard to say. One of the things we worked with the ftc and encouraged them to do is whats now being implemented. Its shake and stir program. That would require identification of the calls. That would dramatically reduce spoofing. You can see it with the digits behind it. It will be a local number as it appears on your tv. Oh, yeah. Yeah. The fcc is working with the carriers to try to fix that problem. Thank you very much, mr. Chairman. I yield back. Certainly. Mr. Crist. Thank you. Thank you, mr. Chairman. I want to thank chairman simmons and commissioner chopra for being with us. I appreciate your Critical Mission to protect americas consumers. Having been floridas attorney general protecting consumers is very important to me and i think all members of our committee as well as you. I want to tell you about one such consumer. Mike mckinney runs a minority owned Small Business in my district. His daughter was diagnosed with diabetes nine years ago. Since her diagnosis the family has focussed on taylors health and treatments. Mike told me about the thousands hes had to pull out of the familys 401 k and the, quote, Creative Things they need dud when they had nowhere else to turn. Mike left his corporate job to start his own business. But the insurance ran out at one point. Mike had to pay 120 for a threeday supply of taylors Life Sustaining insulin. In that vein id ask you to look at this chart behind me. They show the prices of brands of insulin over time. The insulin manufacturers, eli lilly, novo and others are increasing their prices dramatically as you can see. And they are doing it in lock step. Market forces are not driving these increases. And yet, insulin, the drug that sustains americas 30 million diabetics including taylor, keeps getting more and more expensive. All while profits for the Drug Companies continue to skyrocket. Drug companies are price fixes because they know their market is broken. They know their monopolies are legal for now, and they know their 30 Million Consumers cannot influence price because their demand isnt negotiable. They need their insulin or they will die. This is anticonsumer behavior at the most egregious and most harmful, and this is where americans need the ftc. My question for both of you, but for you, commissioner chopra, specifically because you mention the outrageous cost and prescription drugs in your testimony. What is the ftc doing to stop the drug Company Price fixing . And what additional authorities would you need to save consumers lives from the greed of these Drug Companies . Well, i dont want to comment on any specific drug or investigation, but if there is price fixing or other anticompetitive conduct that is literally leading to potentially people dying, we have to take that seriously, and we have to use all the authorities to do that. One of the things that i think is a concern for years and years is how pharmaceutical companies abuse their intellectual property. Filing more patents. Creating patent thickets. Engaging in pay for delay. All of this nonsense. We have the ability to get money, but when it comes to price fixing, that also can suggest criminal liability which is not an authority that we have. But again, i dont want to comment on a specific drug, but it is a serious issue, and as you all think about drug prices, you need to think about remedies for pharma misconduct. Its not just about doing things here and there to get prices down. Its also about going after violations of law, because if you can violate the law and simply pay out of your profits in just a fine, youre not going to change. They may look at it as a cost of doing business. Please, sir . Yes. This is a big area of emphasis for us. We have a whole unit that is devoted to looking at anticompetitive conduct in this space. Just as with commissioner chopra im unable to talk about nonpublic investigations. Were monitoring this space. We look at pricing over time. We monitor drug prices. And if we see something fishy, we look at it. If it looks like something thats related to price fixing, we make an affirmative referral to the Justice Department and oftentimes that results in them taking action. If the referral comes back, in other words, they dont think its criminal, its something well look at and investigate closely. So this is a priority area for us. Great. Are there other tools that you would like to have at your disposal in order to be able to be more effective . So theres a bunch of legislation thats circulating now that deals with pay for delay. Abuse of citizens petitions. And things like that. And those, i think, deserve some real careful attention. I think in general that type of effort would be helpful. Thank you very much, gentlemen. Thank you, mr. Chairman. Thank you. Mr. Cartwright. Thank you, mr. Chairman. Id like to that was an interesting discussion about the facebook, july settlement. Obviously you two were at odds over the whether the settlement should go forward. And i want to get into that a little bit. Commissioner chopra, chairman simons said the 5 billion equated to 23 of annual profits as a factual matter, are you on the same page with that . That i dont know exactly. That sounds right. It is roughly i think 9 of annual revenue and maybe 22 of profits. Okay. And you felt that that wasnt enough . That was kind of a slap on the wrist because the stock price went up right when they when you guys announced the settlement. I think heres the issue. There is facebooks Business Model is still completely intact in terms of they can still collect all sorts of data and monetize it. For me, theres not a fundamental change to their behavioral advertising Business Model which motivates them to engage in this mass Data Collection and ultimately creates problems. I understand that. I just want to sort of flesh out where you guys where you guys agree and disagree. In fact, commissioner chopra, in your dissenting statement to that settlement you said breaking the law has to be easier than has to be riskier than following it. I dont think anybody disagrees with that. I also looked at commissioner kelly slaughters dissent to that. Was it a 32 decision . Yes. Okay. It was a good discussion. One thing that she brought up was that this wasnt just breaking the law. It was violating a court order. Which in my mind has an elevated level of seriousness. Particularly because its intentional conduct. Intentional illegal conduct thumbing their noses at the courts. And i want to go back to you, chairman. What do you make of that . And i also want you to touch on commissioner slaughters comments that you read in her dissent about the value of actually going to court. Just saying damn the torpedos. Lets see what the courts rule on this. Personally, i never met a judge that sat still for the intentional violation of court orders. I never did. Go ahead, commissioner. Yeah. So i think it makes sense sometimes to say damn the torpedos and go for the litigation if you have some reasonable chance of getting significantly more in the litigation than you do in a settlement. But that just wasnt the case here. And so going to court may have kind of been cathartic for some people, and maybe made some things for public. It would have taken a long time and a lot of our resources and they wouldnt have been under the new order during that time period. Was this a bench trial or a jury trial . I think it would have been a jury trial because Civil Penalties are involved. Okay. Did you do research . Was this doj prosecuting this case . It would have been, yes. And without revealing things that shouldnt be revealed, i mean, what made you think the judge and the jury werent going to really throw the book at facebook for this intentional violation of court orders . So we talked to a lot of people who have experience ligating these types of things. You wouldnt get what you go in the settlement. Is the big part there had never been an award that high . I think the that probably was a problem. The other thing, too, that i thought was really important to get this settlement effective as soon as possible with that 5 billion is that would set a new floor. So rather than litigate for three years and hopefully get them under order at that point. They were under order and if they do something and the order doesnt work that time, then were in a position to get even more relief because we say look, we got 5 billion last time. It wasnt good enough. You got to give us more. Thank you. Back to you, commissioner, a comment on those things . I would i dont agree that its about catharsis or anything emotional. Further investigation, we have full ability to compel testimony. I think not clearly deposing mr. Zuckerberg and miss sandberg was a mistake. Often when you are able to directly depose those executives, you determine a lot more of the factual background around the management and government incentives. And youre also touching on something commissioner slaughter mentioned, how about individual liability . These are human beings that are making these illegal decisions to go ahead. Is that and actually, we name individuals with small firms that are controllers of the firms all the time, and mr. Zuckerberg controls this firm. Theres state Court Litigation in multiple jurisdictions now through the discovery process we are learning about more and more potential wrong doing. So it was difficult for me to even size the problem that we were attacking without having more information. So again, to me money is one thing, but actually going after the individuals who made the calls and the fundamental business incentives, that would be the only way to comprehensively fix this problem in my view. Thank you, gentlemen. I yield back. Thank you, before we go to a second round, and well start with mr. Graves, just for the record, and people have asked. My constituents. Proceeds of settlements like this go to the frog government, treasury. Thank you. Mr. Graves. Thank you, mr. Chairman. And commissioner chopra, a question about some of the sort of come up in energy and Commerce Committee. We talked about lawsuits and such. It appears the commission has lost a few lawsuits over time. Maybe as a result of that, and some of the decisions in testimony earlier, energy and Commerce Committee i guess this year. The commissions request an expansion in ftc authority. Enforcement authority through the enactment of privacy and security data legislation. I dont know if youre familiar with that. Pending this expansion, though, the ffc is advocating for increased use of Court Decrees should a target not agree or abide to the prescriptive business. Can you help us understand the ftcs justification for adopting that approach ahead of the congressional approach to grant the authority youre seeking . Im sorry. I dont i didnt really understand the question. Do you want to the reason were asking for privacy and Data SecurityAuthority LikeCivil Penalties or no. Is that what youre looking at . Im not sure. Prior to that you before i guess youre seeking to act the changes in the act as well. Through the authorizing committee. But it also seems youve advocated for an increased use of Court Decrees as well. So prior to. Yeah. So beginning in the 1980s the ftc started to bring actions in federal court seeking discouragement and consumer redress. And that enables us to stop fraud people in their tracks before they dissipate all the money and recover whatever we can recover on behalf of consumers. And for 30 years there have been quite a number of Circuit Court decisions that uphold that ability of ours, that authority. And recently there have been some Circuit Court decisions that questioned that. And so we think its really important that the congress clarify that the prior existing view is the right view. So that we can continue to stop fraudulent people and get consumer redress. Does the ftc ever impose or ask a business or an entity to go beyond what the court sees as the appropriate response . So ill try. With respect to the provision the chairman is saying, many of the courts for years have interpreted our statute to allow us to get that money. That is, ill gotten gains or redress. I think were trying to make sure thats clarified to firms dont exploit legal ambiguity. The problem we have is now companies are more likely to litigate with us which will drain our resources further. So if we clarify that we have this right, then that would mean less litigation for us. Currently you dont have that right . Well, we think we do, but theres ambiguity around it. It causes incentive for the defendants to not settle with us and to litigate on this issue in particular. I understand. One final question on the antitrust. So just a few weeks ago we saw most if not all the attorney generals from the states have engaged in the antitrust debate as well. A nationwide antitrust probe into facebook, and alphabet. So the Judiciary Committee is also investigating apple, amazon, facebook and google as well. How do these state investigations or the congressional investigations impact your work and some of the decisions youre making . The state attorney generals are very j very highly valued partners of ours and we collaborate with them on all sorts of levels. Very heavily in Consumer Protection and also in the competition area. So this is a standard thing where were working on the same matter and we cooperated with each other. They find things and tell us about it. We find things and tell them. It actually helps to kind of leverage our resources, and we view it favorably. Yeah. I think its it is an all hands on deck kind of moment. And i really value the state ags being involved. Ive been part of many multistate arrangements. I try to be in constant communication with those who are eager to make some change. So i welcome this. And just to on congressional oversite, i think we have to keep a lot of our investigation, the contents of it confidential, but theres always value of Congress Investigating as well. Because the public is also learning about some of these Business Practices. Great. Commissioner, chairman, thank you for your work on the commission, and mr. Chairman, i highlight again the bipartisan nature in which this commission operates is of good value to all our constituents. Thank you for the work to protect our intent si as you do. Thank you. I agree. And its im in agreement with that part of it. But it raises concerns about two other entities that seem to have disagreements. You want a case you won a case against qualcomm in may. Whats happening . How do we address this and the potential for duplicative jurisdictions conflicting . Obviously ftc, you share this jurisdiction over antitrust with doj. Thats generally worked well. Where are we now . Its still on average working well. Im recused from the qualcomm matter. Watching from outside in this circumstance, i dont think anyone at the ftc was happy. It was highly unusual. The only other time. Could you elaborate on highly unusual . The only other time i am aware anything like this happened was in our i think one of our initial pay for delay cases where there was a cert petition filed and the department of justice did not want to support our cert petition and the government didnt support it. They took a different stance. So i think thats the only other instance that im aware of. Well, the appeal was still ongoing. I was very proud of the outcome at the District Court level. I also found it not just unusual but very mysterious as to why the department of justice decided to weigh in. I think it raises questions about their commitment to Fair Administration of our antitrust laws. And so i was very disappointed by it, but we will continue to try and seek relief for all of the victims of qualcomms anticompetitive behavior. And generally avoiding duplication, how do you manage that . We have a clearance agreens with the Justice Department in effect for 70 or eighty years. Its been a long time. The agreement provides no agency should review a matter without or start an investigation of a matter without it being cleared from the other agency. And the general approach is not to clear anything that would be involved an overlapping investigation. Miss joyce . Thank you again, mr. Chairman. Overall, what is your approach to investigating the Tech Companies . Do you have a yeah. Well, its not one single approach. And it depends on what were investigating. We form this Technology Task force on the antitrust side to focus specifically on the hightech platforms to look at not only currently what theyre doing but to look historically what theyve been doing. To look at some of the past mergers theyve participated in. And see if any of that is worth pursuing in terms of an enforcement action, and then on a Consumer Protection side, you know, we have the privacy issues. We have potentially Data Security issues. And there are two parts of the of our Consumer Protection bureau that deal with that. Theres an Enforcement Division that handles order enforcement and so they took the lead on the facebook case because that was a violation of an existing order. And then our Privacy Division which looks at the novo matters. Yeah. These firms i think six or seven of the ten largest publicly traded, or, im sorry, ten largest corporations in the world are chinese or u. S. Tech companies. So it is involving everything beyond what chairman simon said. Fake reviews. Facial recognition. Theres so many potential abuses against consumers, Small Businesses, competitors. So if the Congress Cares about competition and cares about a new startup being able to challenge one of the big guys, you all need to support aggressive antitrust enforcement and aggressive enforcement on against consumer abuses as well. What type of anticompetitive behavior have you seen when you look into big Tech Companies . Well, we cant really talk about any specific investigation, but one of the main things you might look for is a situation where the platform is engaged in some kind of exclusionary conduct, particularly against a a direct competitor immediately but might turn into one. An example of this is what history kind of like repeats itself . Cycles. An example from the past would have been microsoft and the anticompetitive behavior relating to net skaps browser. They did all kind of things to get in the which of net skap succeeding. Because they were worried was going to be as middle ware was making the operating system irrelevant. I would also add. I was old enough to remember that one. Yeah. I would also remember looking closely at past mergers, joint ventures. To what extent was the purchase of many, many firms part of a potentially a way to eliminate a potential competitor or maintain a monopoly. That has to be thats always part of how effective antitrust enforcement should look at things. Its not just looking at mergers before they are consummated. Its looking at them after, to determine was it part of a plan to essentially vut down a potential threat. You can imagine a situation in which the plan is to try to buy the companies that are the most threatening. And then if that doesnt work then you engage in different types of executionary conduct to make them irrelevant. You know, there could be like a pattern as commissioner chopra said a overall strategic approach to dealing with the Significant Competitive threats. Western we want to help Small Businesses compete and be able to be out in the marketplace. But it requires having a competitive playing field. Exactly. We want Small Businesses to get big. You know, thats thats what the free market system encourages. We dont want to get in the way we dont want to allow companies to artificially through anticompetitive means stop that process from occurring. Im concerned about some in the sector make, the argument that they need to stay big and dominant in order to compete against china. We should not try and replicate the chinese system when it comes to tech. We should have lots of entrants, innovating, challenging the leader. Thats how we innovate and get ahead not just by allowing incumbent to protect turf. Protecting big incouple penalties is not the right way. National champion is a proven failure. When countries try to promote National Champions they undermine the competitive strength of company they are trying to benefit. And that hurts everybody, the company, the domestic consumers because the prices are too high. And then eventually its going to hurt the workers, because eventually those jobs go away because champions are not champions but Competitive Companies from other parts of the globe are going to come in. Thank you, mr. Chairman, for holding this hearing today. And i realize im out of time whatever i had ill yield back. Thank you, mr. Carpeting root wright. Thank you, chairman simeons i talk about elder fraud. The ftc has had 1. 3 million impofrs people pretending from the hhs, irs. And what we have seen is the scammers is so sophisticated neck have the the caller id of the person as home show the name of the agency they pertain to be part of including the Social Security, in 2019 we have seen explosion of reports regarding the Social Security administration imposters, 64,000 reports in the First Six Months of the calendar year. Unfortunately seniors and elderly tend to be the most vulnerable to these types of schemes. And ideal targets for Social Security schemes given that Social Security tends to be their biggest form of income. How is the ftc addressing these robo calls targeting seniors particularly those pretending to work for the Social Security administration. This is another big priority area for us. And ill talk specifically about the Social SecurityAdministration First and then give me a chance and ill tell you what else we are doing. We became the Social Security scam was going on. And they were duplicating and spoofing the Social Security administration phone number. But it was a phone number they didnt use except for to take incoming calls. So we worked with the Social Security administration to make the phone line only work for incoming calls, not outgoing calls. I think that that was fairly effective in dealing with the problem, at least in that form. More broadly, in march of in year we had a huge federal, state and international cracked on elder broad schemes. These were primarily focused on tech support cases. We are about to submit a Second Annual congressionally mandated report on elder fraud detailing all our Law Enforcement actions, research and Data Analysis and strategies to reduce fraud. That will be out shortly. And then we regularly host Common Ground conferences with state ags and local enforcement around the country to work collaboratively. In particular we hosted one in minnesota where the Panel Focused specificallien elderly fraud and we have an Ongoing Partnership with aarp which is also helpful and then Consumer Outreach as well. I want to touch on that in past congresss ive been introducing a bill called the elder abuse and abuse pr prechgs adequate expanding the the definition of elder abuse to include financial crimes and incorporate elder abuse prevention, training, screenings and more into federal activities. A question for you on outreach is how are you making sure that warnings reach Senior Citizens who may have more limited access and use of the latest technology . We introduced a program which dont hold me to the exact name but i think its called pass it on. And what this program is designed to do is to get Elder Citizens to become advocate in their own community and take take our material and pass it on. And so because sometimes when you get im old enough to be in this category. You think you know everything and dont want to be told what to do. But if its something for helping others, then its something you might you might do out of the box. So thats that approach seems to be having a fair degree of success. Thank you. And commissioner chopra, do you have anything to add on that. The only thing id add is we always need to look not just at the individual scams, because that can be whackamole. We have to look sometimes up the chain to determine who facilities the payments, providing the infrastructure that all of these crimes, essentially, are perpetrated through. Yeah thats a very effective approach for us. Very good. Thank you, mr. Chairman, i yield back. Can i ask mr. Joyce. Are most of of the as you go up the chain, are most of the people out of the country, when they start the telefraud games . My days as prosecutor they were canada or jamaica. It could be, yeah, depends on the situation. Like the robo calls are scams coming from foreign countries. But sometimes from inside the country. And one of the reasons we want to go after the carriers who are taking the calls and putting them into the u. S. Telephone system is just for this reason. Theyre theed fraudster themselves is out of reach. And but we can get the carrier and stop them from facilitating the fraud. For what its worth every time ive done a jesse education process, all of them have gotten the calls. Absolutely. We also need we need to push the carriers, writ large, on a lot of the types of problems. I think theyve vaded a lot of scrutiny when it comes to their role in this sfl thank you, mr. Case joyce. Thank you, mr. Graves. And our colleagues for their thoughtful questions process. Mr. Chairman, mr. Commissioner thank you so much for being here. We appreciate that. We appreciate your service. Well see you soon. Thank you. This meeting is adjourned. Thank you. Zblb gu. This evening a look at how campaign 2020 is shaping up, with charlie cook founder of the cook political report. He will talk with liberal Radio Host Bill press in a conversation hosted by the hill krerpt in washington, d. C. Cspan will take you there live starting at 7 eastern. On online at cspan. Org or listen in live with the cspan radio app. Week nights this week we are featuring American History tv programs as a preview of whats available every weekend on cspan3. American history tv was in the classroom as the university of arkansas professor elliott west gave a lurk on the Environmental Impact of California Gold rush. See that on cspan3 this evening. And enjoy American History tv every night and weekend on cspan3. Sunday on q a, the Smithsonian Institution on the hurts of tariffs and the u. S. Economy. The strourt ruled a tomato is a vegable and not a fruit. Because of a tariffs. Any botennist will tell you is a tomato is a fruit. But the the 1883 tariff put a tariff on on vegetables and not fruits. And so a a importer of vegetables knicks, new york, pointed out the tomato he brought from the caribbean were fruit and didnt have to pay the tariff. The battle went on quite some time. And eventually the Supreme Court ruled that that tomato were actually vegetables. Its interesting in that it had repercussions beyond tomatoes themselves. Sunday night at 8 eastern on cspans the qen achlt. Measles have been found in 31 states this year. Two thirds of the cases were no new york. The rarjts outbreak in the u. S. Since 1992. Public Health Officials discuss the ongoing Measles Outbreak and government response. This hour and 15minute conversation is hosted by the American Academy of pediatrics