Transcripts For CSPAN3 Senate Hearing On Federal Trade Commission 20240712

Agency established in 1914 by the federal trade commission act. The ftc is chiefly responsible from protecting consumers from unfair, deceptive or fraudulent Business Practices in the marketplace. This includes protecting business privacy and the security of their data from any harmful uses of technology and combating deceptive advertising and illegal robo calls among other issues. The ftc is also responsible educating consumers about predatory Business Practices. It is intended to inform customer choices and help prevent americans from falling victim to scammers, fraud centers, cyber criminals and other bad actors. As was recently discussed at chairman marans subcommittee hearing the coronavirus has created an avenue for scammers to take advantage of consumers. The surge in internet use in particular because of stay at home orders has been a prime target for exploitation. I appreciate the commissions ongoing efforts to protect consumers from identity theft, email phishing schemes and other online dangers during this Public Health crisis. Todays hearing is an opportunity to discuss what more can be done to protect americans from deceptive and unfair commercial practices. This work begins by ensuring the ftc has the Proper Authority and resources at its disposal to carry out its broad statutory mandate. The 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 cross border enforcement tool tuesday the ftc to take swift action against criminal activity such as internet pyramid schemes and data theft. The reauthorization of this act was famously reported in this committee in march, soon we will a finalized committee report. Once this is completed i urge congress to reauthorize the u. S. Safe web act quickly before it expires next month. There have also been challenges to the scope of the ftc authority under section 13 b of the ftc act, which the Supreme Court plans to address enits next term. The commission has long relied upon this section of the law to require scammers to give money back to those who have been defrauded. I look forward to examining how congress can clarify the statute to empower the ftc not only to enjoy proper behavior but also to compensate victims for their losses. The ftcs audibilibility to pro essential. Such a law would provide all citizens with more transparency, choice and control over their 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 Personnel Data and outline additional tools that are needed to safeguard information from misuse and unauthorized access. Im sure commissioners will also want to discuss the potential impact of the recently invalidated euu. S. Privacy shield framework. The Privacy Shield provided a method for companies to transfer Personnel Data back and forth between the United States and the European Union in compliance with eu Data Protection requirements and in support of transatlantic commerce. 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 review the ftc is working with the department of commerce to develop interim guidance for thousands of u. S. Companies including many small and medium sized businesses impacted by this recent decision. Finally, some policy makers are proposing that the ftc take a more active role in overseeing unfair or deceptive commercial practices with respect to issues ranging from dissection 230 of the communications with decency act to compensating collegiate athletes for 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 whether it has sufficient tools to protect consumers in these commercial activities. Clearly with the ftc theres much to discuss. I thank commissioners again for their testimonies, and i know turn to my friend and Ranking Member for her opening remarks. Is senator cantwell. Thank you mr. Chairman and thank you for holding this important hearing today as we inskriet the commissioners to come before congress to talk about the impact this pandemic is having. My view is simple. You should be doing everything in your power to help americans during this time of crisis. The mission is of extreme importance and the nation continue tuesday reel from one of the worlds worst Health Emergencies and Economic Crises we have ever faced. Weve seen its attracted bad actors and scam artists including those who take advantage of peoples fear and dire circumstances. Im sure every member of this committee has heard from their constituents about these issues about buying ineffective face masks or being subject to phishing attacks or seeing advertisements for miracle coronavirus cures. Thousands of people have reported sky high prices for good and services for their family. And these scams are happening in every part of the state. There was a recent story in Seattle Times about sanitizer for 150 sanitizer. So price gouging and the issues related to price gouging continue to pileup. So just like the spread of covid19 these virus scams are happening everywhere. Theyre impacting rural communities, urban communities and hurting americans young and old. Certainly thats the case in my state of washington where according to the ftc people have been scammed out of over 2. 5 million since the pandemic began and over 3,500 reports of fraud. While many of the attorney generals have gone after these profit ea profiteers i believe the ftc is moving back. You could be doing more. We must see the ftc exercising enforcement with real enforcement and protecting consumer families when they are most vulnerable. That is why i think the ftc needs clear price gouging legislation to go after these scammers. We am must not allow unscrupulous scammers to Exchange Life savings for personal supplies simply because their families are desperate. And trust me on the front lines of the epidemic in kirkland was evergreen hospital. Squoits not a good thing to take calls from emergency room doctors who are saying they are getting price gouged. So we need to make it clear its illegal to pedal defective masks and fake cures. So this is especially true given our crisis today. So mr. Chairman i plan to introduce in the coming days federal legislation to do two things. To move both on price gouging definition to make sure the law is clear consumers can be protected in this area and to enforce Civil Penalties for deceptive covid scams. It is time for us to act on these important pieces of legislation. It is time for us to protect our consumers from these very important issues during the 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, mr. Chairman. Thank you, senator cantwell, and we look forward to seeing that legislation once you get it drafted and introduced. We now turn to testimony summaries of testimony from our witnesses. Written testimony has been submitted and will be admitted into the record in full at this point. And we ask each member of the commission to summarize testimony in five minutes if possible. We begin with the chair, the honorable joseph j. Simens who again joins us remotely along with all the other members. Chairman simons, you are recognize said, sir. Thank you so much. Its an honor to be with you today even if its virtual and especially along side my fellow commissioners. Despite the challenges presented by the pandemic the ftc has remained active, open and aggressive. Were using every tool in our arsenal on covid related initiatives while simultaneously handling our every day efforts to protect Consumer Privacy and Data Security, stop fraud and ensure advertising claims are truthful and not misleading and to combat illegal robo calls. I want to take a moment to focus on one of my priorities, privacy and Data Security. Our enforcement in these areas including cases against facebook, google, youtube and exwufe equifax has been successful within the limits of our authority. 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 policy makers its appropriate for you to make the difficult value based decisions underlying new privacy protections. From an enforcement perspective i ask the legislation give us three things. One, the ability to seek Civil Penalties. Two, jurisdiction over nonprofits and common carriers as well as everybody else, and three, targeted apa rule make thoer ing authority. This is similar to the approach Congress Took under kapa. We will continue to enforce existing statutes and use our experience and expertise to enforce any new Data Security laws that you pass. We also need your help to clarify our authority under 13b of the ftc act which our principle 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 over the last four years. Recent court decisions, however, threaten this essential authority and this issue is now before to Supreme Court. I strongly urge you to clarify the law on 13b. I want to thank the committee for advancing ledge slakz to reauthorize safe web. Without further action safe web will sunset on september 30th. Id really like your continued support in pushing this effort beyond the goal line and keeping safe web in our arsenal. Please know how grateful i am on what youve already done on these issues and im very thankful to the Financial Support congress has given ftc this year. The 20 million increase averted reductions and instead allows us to hire more people for some of our most critical work. I also wanted to mention the recent eu ruling on Privacy Shield and that we are studying its efforts. We stand ready to support the administrations efforts in this area but continue to hold Companies Accountable for their commitments ill end by briefly highlighting our antitrust enforcement. We are on pace for the highest merger Enforcement Actions in 20 years since fiscal year 2000. Last year we formed the Technology Enforcement decision, which we call ted, which is currently pursuing significant operationinize involving big platforms and weve used our study authority to require them to provide information about prior acquisitions not reported on the hsr act. Were committed to using every resource as effectively as we can to protect consumers and to promote competition. And we certainly look forward to continuing to work with you, and ill be be happy to answer your questions. Thank you so much. Thank you very much, mr. Chairman. And now we turn to commissioner n no noah philips. I also want to thank you for your flexibility. It is always good to be at the senate even if that means virtually. Theres a lot to cover, and i look forward to our discussion, but i want to take a moment to highlight an important issue which i know is the focus for many of you, Data Security. Hardly a week goes by without americans learning about another major cyber attack, breach or vulnerability. Accounts on a major social media platform were exploited three weeks ago. Last week researchers revealed a vulnerability on devices running window and lennox operating systems which could impact billions of devices. The 2018 Department Study showed identity etheft as the number one Security Privacy issue for americans. Data security legislation is one of the best things we can all do for privacy. The endemic use of data in our economy is not going away. And it supports not only the new ways okay, commissioner, your video froze there for a moment, so we want to make sure at that point we can iron out these technical difficulties and you can resume at that very point in the testimony. So well just pause for a moment and allow the advice of our technical experts. Assunccan you hear me . We can now hear you. Thank you, my apologies. Im having some connection issues. If you can back up a sentence or two so we can hear you. We dont see you. My apologies. While the vast majority of attacks are thwarted in 2019 there were still over 1,400 reported data breaches in the u. S. Exposing more than 160 million. The loss, corruption and ransoming of this data can pose serious harm to businesses. Exposure to Sensitive Data, years of litigation and so on. And of course adequate Data Security is a profound National Security issue. At the ftc we investigate and bring actions against companies that fail to maintain reasonable Data Security or mislead consumers about it. Recent example includes dealer bill, an auto Dealer Management Software provider, retinax, a software app that raised profound privacy problems, and also equifax. Resultsing in affected record of over 145 million americans. Certifications of compliance for senior officials and a better Third Party Assessor process. Statutes like kapa and ground leech wily give us Data Security authority in areasf heightened sensitivity like kids. But the regime today has gaps particularly in an area of vulnerability. Consider ininternternet of thin. The manufacturer of a 15 device may not have adequate incentive to secure it. We grappled with this issue against the wifi company, again just a few months ago in our settlement. The department of homeland security, Cyber Security and infrastructure security agencies which builds up Cyber Security defenses in partnership with public and private entities is also active on iot. We refer to them as a resource in our consumer and business education. We also view use of the tools such as those that help businesses identify risks favorably in our data secure investigation. I think we ought to go firther and consider carrots and sticks to encourage partnership. Today, though, i want to stress the importance of the commissions call for Data Security legislation. We need to be flexible to deal with rapid Technical Development and mindful of the facts the defenders in Cyber Security cases are often themselves the victims of felony. If a congressional mandate and inceptives a inceptives are critical. Those who could most efish anteaddress Data Security problems often failed to do them. Data privacy is something which many of you have been working hard and its an important part of our mission and priority. Data security legislation is one of the best things i think we can do. Okay, just so you know on that sentence about data privacy thats when your video froze up, mr. Commissioner. So perhaps we can iron that out. Can you hair us near us now, si . Commissioner philips, i believe the chairman is addressing you. Forgive me, mr. Chairman. I did not hear the question. Commissioner philips, you were in the middle of a sentence about data privacy and your screen froze up again, so if you could restart there at about the minute 30 mark. Absolutely. I believe the Data Security legislation is one of the most important things we can do for privacy. Very good. If youll just complete your statement then well appreciate it. Yes, thank you. And of course ill submit a copy for the record. All right, do you havemorally of your written statement that youd like to of your verbal statement that youd like to complete. Ill tell you why dont woe go ahead then to the next witness because weve had these difficulties . We thank you, commissioner philips and now we turn to Commission Commissioner chopra. Thank you for this opportunity to appear before you today with my colleagues. The federal trade commissions responsibilities are wide and far reaching with so many that directly relate to the crisis we face. Health care and pharmaceuticals, disinformation and fake reviews, abuse and misuse of data and so much more. But theres one area in particular the ftc could and should priority that i want to emphasize today. According tool a survey of Human Society Resource Management 52 of Small Businesses believe they are likely to fail due to the effects of covid19. And if this comes true millions of businesses and many more millions who work for them could lose their livelihoods devastating local economies in the process. The ftc has an Important Role to play to protect Small Businesses from abusive practices. First we must crack down on Small Business loansharking. Many businesses are struggling and this is giving an opening to bad actors that target restaurants, stores and other 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 those Small Businesses up to fail. In these contracts Small Businesses must agree to concessions of judgment where borrowers automatically plead guilty if the lender sues them for payment. These clauses are illegal consumer contracts but are being unfairly weaponized against americas Small Business owners. The ftc is the only federal agency with authority to crack down on these nonbank Small Business lending practices, and weve taken some important actions and we must look to systemically eliminate these illegal practices before its too late. Second the ftc must franchise businesses incomp a broad swath of businesses across the economy from auto repair to real estate to Fitness Centers to fast food and so much more. Operators and franchise businesses employ millions of americans and theyre also more likely to be minority owned compared to other Small Businesses. However, there are signs franchisizers may be using the pandemic to exact more economic pain on operators. For example, subway and 7eleven said these are fighting back the ftc administers the franchise rule and enforces law that prohibit unfair practices by franchise order. This responsibility is critical given the threats faced by so many operators of franchise businesses today. And finally the ftc will need to police markets for anticompetitive mergers that scoop up scores of businesses. One common Acquisition Strategy is called a rollup. This is when a buyer often a private equity fund acquires a substantial number of small players in a market and combines them into a single large one. For example, many independent medic medical fractions are seriously struggling right now and many believe theyll need to sell their business to an Investment Fund or Hospital System due to the dire economic straits they face. The slow extraction may have a serious impact of cost and care. Many of these deals are not suggest to reporting because theyre relatively small, but when buyers acquire dozens of even hundreds of these Small Businesses this can kill competition and make it more difficult for new players to enter the market. The ftc will needs to use its authority to halt any schemes that stamp out competition. In closing, we face unusual and extraordinary times for our economy and society. And 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 and i look forward to your question. Thank you, very much commissioner chopra. Now we turn to Rebecca Kelly slaughter. Thank you, mr. Chairman and members of the committee for inviting us today. Whos your guest . Oh, this is haddy. She is my new baby. She is two months old, and like Many Americans i am home with my kid so she is with me today. She seems very relaxed about your position on the issues. Well, hopefully. Her name is now in the committee record. Well, good. Shell be very proud. Let me start over so i can address the committee. Thank you so much for having us here today. Like most americans and yourselves fall out from the coronavirus is front of mind for me these days so im going to confine my oral remarks to that topic. I worry most about the burden borne by three groups in particular, kids, workers and patients. As a working parent with four Young Children at home who has been struggling to manage Distance Learning for her kids even with the best circumstances and resources i am especially sensitive to education issues. The pandemic has exacerbated the existing deep disparity in ecicational inequity in this country. Families with access to broadband devices and the flexibility of a parent to be at home muddled through. For millions of American Kids from vulnerable Communities School simply stops. As many as 1 in 6 kids lack the equipment necessary to participate in Distance Learning, and nearly one kwarlter of kids lack reliable internet access. Conditions that particularly effect rural, urban and low income families. The Solutions Parents and School Districts are considering pose increased risk of privacy harm to kids particularly kids in communities argument battling the equity gap. We need to acknowledge privacy and data issues are also equity and civil rights issues. Hybrid and inperson learning models will require unprecedented collection of personal data to facilitate Contact Tracing, quarantines and family choice. Online learning demands rapid adoption of a suite of technology that may be unbedded or used without supervision, wealthy childrens families may pay, poor kids families may pay by sacrificing their privacy. It must hold Companies Accountable if the solutions to fill education gaps violate current law. But i want to be realistic about the biest Case Scenario many families face for the upcoming academic here. Shared devices being used by kids for hours with little oversight by adults. Current law provides very little protection in these circumstances particularly for applications targeting teenagers or general audience. The need for comprehensive data privacy legislation with meaningful limitations on the collection and use of data and prohibitions on discriminatory practices, dark patterns and data abuses has never been greater. The ftc stands ready to enforce a privacy law and my hope is the catastrophic consequences for children will serve as the final push for such legislation. Until then i believe the mounting data harms emerging from the crisis demand the institution consider instituting a role making. In addition to supporting kids we must support workers. I recognize how important i am to navigate the challenges of child care and Online Learning from the privileged position of employment. At least 11 of my fellow americans do not share that good fortune. I echo commissioner chopras calls for the ftc to focus on Small Businesses. I believe the ftc must also use its Competition Authority to better protect our work force by sharpening attention on marketers that harm workers. Employers ought to compete to attract workers by providing the highest wages, most attractive benefits and especially today the most Robust Health and safety measures. We should focus on these issues and also consider whether and how our role making authority might be applied to address them. The most fundamental challenge is how to overcome the diddly Public Health crisis which we know has an outside impact on communities and Senior Communities of color. The ftc must continue to protect access to care by challenging hospital and Health Care Providers that increase choices and limit patient choice. We must vigorously apply scrutiny to pharmaceutical. Creativity is no substitute, however, for Clear Authority and i would ask congress to give the ftc a direct mandate to stamp out abusive pricing practices. In conclusion i want to acknowledge the dedicated Public Servants at the agency who have been working through this crisis in an incredibly challenging circumstance. Working from home especially for parents of young kids is harder than i could ever imagine. Chairman simon deserves great credit and the staff deserves equal credit for their tenacity, susilience and unwavering commitment to the important work of the commission. I look forward to answering your question. Thank you, commissioner. It is indeed ironic that just as you were speaking about online Distance Learning we lost your video although we could hear you. And onscreen was a text saying that we had lost the picture because of low bandwidth. I apologize. No, i think that points out the problem 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 that haddy has a beautiful head of hair there and shes wellbehaved. So thank you for that testimony, and now we turn to commissioner wilson. You are recognized. Thank you. Members of the committee i am pleased to appear before you today. Id like to highlight two areas where i respectfully believe congress could help the ftc fulfill its mission, first by enacting privacy legislation and second by maintaining the focus on consumer welfare and economic driven enforcement in antitrust. Federal privacy legislation is necessary for several reasons. First, businesses need predictability in the face of a growing patchwork of states and international frameworks. Second, consumers need transparency regarding how their data is collected and shared. Third, gaps have emerged in privacy laws. For example, hipa covers the privacy of health Data Collected by a doctor but not by apps. The need is more urgent now given covid19. For millions of americans work and school have moved online. Consumer data is being deployed to monitor compliance with quarantines and for Contact Tracing while many View Technology as key to safely easing quarantines and resuming normal life these tools depend on Sensitive Health and location data. We now face many new and complex privacy issues. Interestingly effective Contact Tracing requires widespread adoption, but Digital Trust is lacking. A the Washington Post poll found that half of smart phone users who could use Contact Tracing apps wont because they dont trust text companies. Privacy legislation would help build Digital Trust which is necessary to help foster continued innovation and investment. Privacy legislation is also necessary to protect our Fourth Amendment rights. Consumers surrender Sensitive Data through their use of phones and other connected devices. If citizens know and accept that nothing is private then they have no reasonable expectation of privacy and Fourth Amendment protections evaporate. While privacy is important so is competition. Privacy ledgeilation must be crafted so as to maintain competition and foster innovation. Research indicates the passage of gdpr in the eu led to decreased Venture Capital investment and entrenchment of dominant players in advertising. Compliance is costly for Small Businesses and new entrants. U. S. Legislations should seek to avoid these pit falls. With our dual mission in Consumer Protection the ftc is well situated to provide Technical Assistance to congress on this issue. Four other considerations for legislation. First the ftc should be the enforcing agency given its decades of experience. Second, like kapa, legislation should include civil monetary penalties. Third it could have jurisdiction over nonprivate incoming carriers which collects sensitive information. Finally, targeted rule making would allow them to assess technological development. The consumer welfare standard in antitrust which measures the impact of competitive conduct on consumers is under attack. The consumer welfare standard also addresses other important factors like quality and innovation. If people wanted only the cheapest products we would still use flip phones instead of smart phones. But price does matter. Antitrust scholar herbert campus written attack low prices as essential aept truntitrust s going to hurt consumers the most. Some conduct can drive up prices without increasing quality or innovation, but most of the building practices and mergers we review require closer scrutiny. Economic analysis helps us determine whether any harm to competition is outweighed by benefits to consumers. Without Economic Analysis antitrust at best would be a series of rules at worst antitrust untethered from Economic Analysis would be subjective and vulnerable to political manipulations. Companies would seek the favor of legislators and regulators instead of courting consumers. Im happy to answer any questions you may have. Well, thank you very much. Another thing i wanted to mention after the testimony of Rebecca Kelly slaughter was to thank her for pointing out what a wonderful job the staff of the ftc does, and im sure each member of the commission subscribes to that. We certainly, senator cantwell can say the same for our hardworking and talented and knowledge staff here in the committee on both sides of the dias, and that gives me a chance to say that. Lets start off, and i guess well begin with the chair, so chairman simons, lets talk about the ftcs role and in particular president trumps executive order in may in preventing online censorship. Specifically section 4 of this order calls on the ftc to take action against Online Platforms that restrict speech in a manner inconsistent with their terms of service. What is your view, mr. Chairman, on the ftcs responsibilities under the executive order . And have you seen any examples of the behavior described in the order and taken any action under your authority so far . Thank you, mr. Chairman. We havent taken any action according to the executive order. We get complaints from a wide variety of sources from the public, from congress, from competitors, from people in industry, from consumer watchdogs and its very important we get those complaints and we Pay Attention to them. Lots of complaints come from members of this committee, and were very thankful you provide us with such thoughtful complaints. Were an independent agency so we review all of them independently. We have jurisdiction over commercial speech, nondeceptive and unfair. And then some other statutes. So we look to see whether the complaints are subject to unfairness im sorry whether theyre within our authority as i described. And our authority focuses on commercial speech not political content curation. If we see complaints that are not within our jurisdiction then we dont do anything. If we see complaints that are then we take a closer look and figure out if theres a violation and then we determine whether its appropriate for us to act. So, mr. Chairman, you dont view political speech as within your jurisdiction . Correct. And so if the public and members of the senate are concerned about Online Platforms like twitter and facebook being inconsistent in the way they restrict political speech you do not view that as within the purview of your statutory responsibilities, and therefore the executive order does not instruct you in that specific area. Is that correct . Yes, for political content curation, yes. Okay, now, who else would like to comment on this . Im going to take my whole five minutes on this. Chairman wicker, im happy to weigh in. I think putting aside the executive order the issue of section 230 is one whereof great concern i think, and theres a growing bipartisan consensus that it has been abused. We see whether it comes to counterfeit and defective goods, an unlevel Playing Field between Online Platforms and brick and mortar stores. And in general i think the scrutiny is warranted when it comes to Technology Platforms abusing any liabilities and public privileges and using that as regulatory arbitrage. I think many of these platforms do have too much power to dictate certain policies and regulations, and i dont want to see them continue in my view to overuse and abuse the legal immunities that congress has provided. And i think we need to take a hard look at that particularly when it comes to the use of surveillance based behavioral advertising. I think that Business Model is inconsistent with the origins of section 230. Section 230 as supposed to safeguard and promote speech. Its not supposed to, you know, prioritize certain types of things over the others based on what makes those companies more money. You know, commissioner, i think you make some very good points there. And i would observe that the hearing in the house of representatives last week on a bipartisan basis indicated a real concern that these platforms are awfully big and too powerful, and that it is a matter of concern for the consuming public. So i appreciate your testimony there. I also have a comment, senator wicker. You noted that this was a bipartisan issue in last weeks hearing, and i actually have chairman nadlers quotes in front of me. He asked was the ability to make money in any way affect googles aggurhythm in terms of what news appears in a users typical search results. He noted now we hear google and facebook are making money over what news they let the American People see. He said it is a very dangerous situation. And so i agree social Media Companies now provide a significant portion of america with its news. And so there is concern about content curation. My colleague, commissioner chopra and i have previously asked the ftc in a Public Statement to prioritize 60 studies that explore how content curation and targeted advertising practices impact data collection, use and sharing and how the monetization of data impacts the creation and refinement of algorithms that drive content curation and targeted advertising practices. So i think this issue as my colleague commissioner chopra noted is a really important one for us to consider and learn more about. And have those studies been authorized and commenced at this point . Nothing has been publicly announced, senator. Thank you very much. Senator . Yes . I hear a voice. Perhaps youre being censored at this point. Let me say this will be a further topic of questions, and ill not further intrude on my time at this point but recognize the distinguished Ranking Member. Well get back to you for an answer once we get these kinks ironed out. Senator cantwell . Thank you, mr. Chairman, and for holding this important hearing and all the feedback from the commissioners. Id like to go back to price gouging. In april in the state of washington the attorney general launched a see it, snap it, send it campaign to fight price gouging. The initiative followed 400 price gouging related to complaints around cease and desist letters to washington based Online Sellers accused of price gouging in upwards of 150 site visits to businesses that were subjects of these complaints. So this is a very important and timely issue as it relates to the crisis, and we want to make sure that americans are getting all the help that they deserve. Currently the federal agencies have very limited authority to prevent price gouging. The ftc as the chair was just mentioning go after unfair and deceptive practices which really hasnt been used in cases of price gouging. So that is why i believe we need a new definition particularly during a time of an emergency. During a time of an emergency you should not allow for these unconscionably excessive prices, and i think we should do something about that. So i wanted to ask you chairman simons, do you support congress doing something specifically on price gouging authority . Senator, we agree that price gouging is a very serious problem especially for ppe and the like. We currently work with the doj and the states to refer cases to them because as really not a go fit for price gouging authority, but we would vigorously support and enforce legislation if Congress Passed a law on price gouging. We think that legislation should include a triggering event and a time limit. It should be national in scope. It should define the products that are covered. Describe what constitutes an excessive price increase, and provide carveouts for offsetting cost increases. Thank you. Thank you for that list. I agree. And i think particularly when you define a crisis, we have certainly been involved in what we think have been manipulations of oil markets and certainly people who took advantage of oil prices during a hurricane and certainly been involved in electricity rates and what we thought were manipulated electricity markets. So anyway, look forward to working with you on that. Commissioner slaughter and chopra, thank you, commissioner, for mentioning well, first of all, enlightening our day. Thank you. Thats very nice of you. But also, for mentioning broadband, and i know the chairman agrees that we have an important opportunity in front of us with the next covid package as were seeing schools make decisions about what theyre going to do on the Education System for the fall, we really have to address this gap, and we need to make sure that the dollars are there and the specific programs are there for broadband. So we look forward to working with everybody to make sure that gets in a package. But on this issue of price gouging, commissioner slaughter, you also mentioned, and commissioner chopra, what is your perspective about the core provision of a price gouging law . We heard from the chairman, but what do you believe needs to be in the legislation . Thank you, senator, for the question. And youre right about broad band. You can see with all of us struggling with our feeds occasionally, we can see how important it is. In terms of price gouging, i agree with a lot of what the chairman said in terms of what the parameters of price gouging legislation would look like. I would want to make sure it wasnt too limited and didnt put too high a burden on the agencies to establish that the circumstances have been met, because when thats the case, then we cant really bring the cases effectively that we want to to protect the public, and the last point i would make is i agree also that section 5 is very much an imperfect tool for addressing these kinds of problems. But i want to see us in all cases including in the case of price gouging or maybe especially, thinking about whether particular circumstances might give rise to a creative use of section 5 authority in this on this topic, and this is something commissioner chopra and i both talked about in terms of drug price spikes recently. I think we would really benefit from clear legislation from congress, but very much share your view that this is a high priority and something that we can see the real life effects of for American People every day. Thank you. Commissioner chopra, did you thank you. I agree. Just two quick points. I do not want to see any federal law delete the state laws, the preemption of state laws i dont think is appropriate when it comes to this issue, and i also hope given some of the framework in the defense production act as well, that you also consider criminal penalties in certain circumstances. Yeah, i certainly believe we have done Effective Work on this as it relates to Energy Markets and having criminal penalties has been given the ftc i mean the federal Energy Regulatory commission the tool they needed to police Energy Markets. We dont need Higher Energy costs than we should be paying, and i know my time is expired but i want to mention on commissioner wilsons point about content curation, this is really a very severe problem that is undermining the newspaper industry. The fact that these content creators are basically becoming the entry point of delivery is limiting the options for our broadcast and content deliverers in the newspaper business, so i look forward to seeing what the commission comes out with on this, but i think this is also a very important issue that needs to be addressed. Thank you. Thank you very, very much. Senator cantwell. Senator fisher is next. Thank you, mr. Chairman. Chairman simons, as im sure you know, this committee has been evaluating a path forward on the name, image, likeness rules that have begun to take shape at the state level along with the proposal recently developed by the ncaa. Im interested to hear your perspective on this matter, particularly on the ftcs role in importing any new federal nia rules. As talks continue on a potential framework, what new authorities and resources do you believe the commission may or may not need to enforce added protections for student athletes . I think you have to unmute, sir. There you go. Can you hear me . Yes. Thanks for the question. I think i was unmuted and by mistake muted. Sorry for that. I am a big believer that competition should function in almost every situation including college athletics. I have been very concerned for a long period of time that students are not getting what they should get in terms of compensation for what they do. This is particularly serious because it has a large effect on minority disadvantaged communities. Particularly with the football and basketball programs. And so i am very, very excited about what you are doing. And i encourage you to go as far as you can. In terms of expertise, we dont really have very much expertise at all in this area as an institution. The doj has really been the one thats been interacting with colleges, including college athletics. And so we dont have that base that the doj has. But having said that, if you want to give us authority, we will, of course, enforce it. But depending on exactly what you pass, it might require a lot of increased manpower on our part in order to do that. And also, depending on what you pass, if it looks Something Like a professional regulation like where youre regulating agents or things like that, and any kind of certification or any type of way, i think that would be not particularly suited for our agency. Thank you. Over the past few months, we have seen the pandemic add new volatility to our Food Supply Chain. And that requires a massive shift in logistics. And amid the financial strain, consumers are trying to stock up on food while producers and retailers are doing their best to insure that the grocery shelves are stocked. The ftc has an important responsibility to help safeguard americas food supply. Mr. Chairman, in terms of the ftcs role, what policies do you feel would be most effective to focus on for maintaining a stable Food Supply Chain during these unprecedented times . So our big focus with respect to food is the retail aspect of it. And so were very focused on that. Were doing our best to make sure that theyre as competitive as possible and that competition flourishes at the retail level. The doj is the one that focused on the production of meat and things like that. And were dealing with agriculture, the agricultural side of it, so we would defer to them on that part. In terms of the retail part, were focused on making sure theres good competition for consumer benefit. As you know, the act was drafted following an ftc report that highlighted abuses by major meat Packing Companies at that time. And leveraged their market power. Mr. Commissioner chopra, i would be interested in your take on this as well. Particularly on more recent concerned about vertical integration trends that were seeing in the Food Industry. Thank you, senator. I totally share those concerns. What were seeing in the Food Industry from farm to Table Including what chairman simons said on the retail side, but also on the production side, there are serious issues with how certain large, powerful players are able to dictate terms and the lives of so many, whether theyre poultry growers or livestock producers and ranchers. I am concerned that the usdas rule making on the packers and Stockyards Act is going to make matters worse. Its going to make it even harder to make sure that our food markets are competitive and fair. The ftc does have some limited authority under the packers and Stockyards Act, but as we have seen during this pandemic, just recently, the jbs Mountain States Rosen transaction, theres going to be a lot of issues when it comes to the stability of our food supply, and i think we all as federal agencies need to think about it, including our National Security regulators as well. Right. You do have you do have say over retail sales of meat and livestock products. And when you look at, as i know you have been focused on that vertical integration, obviously that has an impact on those retail sales, vertical integration that takes place. I thank you for your comments and hope to work with you on that. Thank you. Thank you, senator fisher. Let me just exercise a little discretion here and intrude on the next round of questioning. Thank you. Mr. Chairman, you dont want this issue of athletic name, image, and likeness, do you . You would rather the Justice Department have that, right . Yeah, they have the expertise in that area. Does any member of the commission disagree with the chairman on that . Who wants this issue . I would personally favor a private right of action for some of this. Its very hard to police some of these markets, and in some cases, the players themselves may be well situated to vindicate their own rights. Would you like for the ftc to have jurisdiction over it . Thats really your choice. I dont think that we seem best situated, but well do ultimately what Congress Passes laws instructing us to do. Okay, if anybody wants to comment mr. Chairman, could i just make a comment there . I agree with commissioner chopra that a private right of action would be appropriate. Okay. And please submit feel free to submit written responses expanding your position there, and senator klobuchar, i appreciate you letting me delay your questioning for a moment. Youre recognized. Well, thank you, mr. Chairman. And again, thank you for conducting along with senator cantwell this really important hearing right now. You know, i told many of you this before, but i think that this pandemic has shed a big magnifying glass on some issues that we know are already out here with consolidation, with consumer scams and the like, and i appreciate all the commissioners being here. Start with following up on some of senator cantwells questions. Im on her bill on privacy, and senator kennedy and i have a separate bill, but i wanted to ask, i think it was in your Opening Statement, chair simons, that you mentioned you believe you needed additional Rule Making Authority. I think commissioner chopra also has taken this position. Could you briefly, i have a lot of questions, answer that, in order to do things on privacy outside of legislation. Chairman. Yes, thank you, senator. So in terms of the rule making, what were looking for is a targeted Rule Making Authority. So not kind of pass a general statute that says we want federal privacy legislation. Let the ftc figure it out. No, we think that is your job and you have done great efforts, as you describe, to move that along, and we encourage you to go further and get across the finish line on that. In terms of us, though, just like the congress did with copa, they allowed us to have apa targeted rule making to do things such as change definitions to account for changes in technology or changes in business methods. One example from copa was there, the original language did not include photos. So this was like in 1998 or 2000, and photos werent a big thing in terms of being uploaded to the internet. Now, of course, they are and theyre really important and sensitive. Thats just an example. Before i go to commissioner chopra, one other question of you because i dont think we have delved into this yet. On the front of the hearing in the house last week with the ceos of amazon, facebook, google, and apple, do you based on what you heard at the hearing, i assume you watched it or read the transcript, do you believe the ftc should look back at consummated mergers, not just to learn from them but potentially to take more enforcement action given what we have seen with instagram and whatsapp, with facebook and some of these others, and what the market is looking like right now . Yes, thank you, senator. I dont think it would be appropriate for me to comment on any particular investigation or company, but i have said before that, yes, we have the ability to look back at consummated mergers and to undo them, and certainly, we have done that many times in the past. We have a litigation going on now where were doing that. So that is something that is definitely on the table for us. In addition, what we have done is issued 6b orders to all of the major tech platforms to get information about acquisitions that were not reportable under the act. And were looking at those too. One thing we discussed in judiciary before, the antitrust i cut you off. No, im good. Okay. One thing you and i discussed at the antitrust subcommittee, and i guess a few of the other commissioners could briefly pitch in here. I looked back historically at the staffing for the ftc. This is not about your decisions, chairman, and when you look, youre like a shadow of yourself from the 80s from the Reagan Administration on down, and yet youre dealing with trilliondollar companies and are expected to be the counterweight to those companies and expected by the public and by all of us, democrats and republicans, to be looking at these things. Senator grassley and i have a bill, as you know, to add more resources with filing fee changes for the mega mergers and the like. I think we should be doing more going into next year in a big way, but could you just briefly say whether more resources would be helpful. The public needs to understand and my colleagues need to understand that shift over time and how its just literally is going to be impossible for us to take on legions of lawyers at trilliondollar companies to do all the stuff everyone is talking about from senator hawley on if we dont have the resources. Yeah, we dearly need the resources. You make a very good point that in the 80s, we were about twice the size we are now. Some of that had to do with computerization and more efficiency among the staff, but still, i think we are behind, and we need more resources. Were busting at the seams. Were having trouble staffing the existing mergers as it is. Like i mentioned earlier, we are on pace to have more mergen Enforcement Actions than any time since fiscal year 2000. Exactly, and heres the point, for my colleagues who want to be fiscally responsible, which we all do, is that you bring in money, the ftc and these antitrust divisions of the Justice Department, brings in money with these fines, and we get a look at all of this in the context and whats happening to Consumer Prices in this new gilded age that were entering in if we dont do something with this pandemic profiteering and other things going on. Let me respond to one thing in particular about that, senator. Mmhmm. That is the way the hsr act is currently determined increasing the fees actually would not go into our budget. But you could change that legislatively, and we would ask that you do that. Got it. Okay. Im just going to turn to i said commissioner chopras name but im running out of time quickly. Commissioner slaughter, are you there . She was going to have to go. I was going to compliment i will ask this first on the record, but its simply about the exclusionary practices bill we have. And the need to update our standards for these mergers in light of whats going on around the country with monopolies and the like. I can do that on the record. Thank you, mr. Chairman. Thank you so much, senator klobuchar. Chairman, thank you for having this hearing. Your subcommittee had a hearing two weeks ago on the issue of Consumer Protection in the times of covid19. So ill skip those questions today. Senator blumenthal is in the room. It seems like i should be asking you about data privacy, but im going to deal with at least for this round of questions with the u. S. eu Privacy Shield. Chairman simons, the court of justice of the European Union recently invalidated the Privacy Shield arrangement as a basis for lawful transfers of data with more than 70 of the nearly 5300 companies being small to medium sized businesses including many in my home state, i would understand this to be an extremely urgent matter for Digital Commerce in the United States. Just simply to begin with, do you agree with the significance of this . Im sorry, yes. Particularly for Small Businesses. I was muted, sorry. Thank you, chairman. Your website, the ftcs website, includes an update on the recent developments related to the Privacy Shield. It states in there, and i quote, continues to expect companies to compline with the ongoing obligations with respect to transfers made under the Privacy Shield framework. This statement aligns with the ftcs previous discretions in refraining from bringing any enforcement action in 2015 when Privacy Shields predecessor safe harbor was invalidated in schrims 1. Can businesses expect a similar enforcement by the ftc in the aftermath of this invalidation of the Privacy Shield . Basically, theyre making promises that they are following the Privacy Shield principles, and if they dont, thats a problem under our act, under section 5. So companies could say they could put on their website, were no longer certified under Privacy Shield. Its been overturned by the eu courts. But they would still be obligated to protect the data in a way that they promised going forward. So if one thing they might have to delete it or otherwise just protect it in the way that they promised pursuant to the provacy shield principle. In that circumstance, how does the ftc respond to that business . You mean if they dont . Yes, if let me first start with if they do, then the ftc would take no action, is that right . Thats right. Okay. Commissioner wilson, let me direct this to you. I would warn that the Europeans Court surveillance concerns in relation to Privacy Shield should not be conflated with the concerns about consumer data privacy. However, is it fair to say that the enactment of a preemptive federal privacy framework might make determining a future determination by the eu easier . Yes. Thank you for the question. And i would agree with that statement. And then let me ask all, in the case of if that is the case, would you support enactment of the consumer data Privacy Security act which provides a uniform National Standard . I have seen some of the commissioners have answered that question, and other senators dialogue, but that uniform National Standard, i would ask for a yes or no from each of you. Well begin yes, sorry. Commissioner wilson. Yes. I think that one federal privacy standard is incredibly important. The internet does not stop. It even has International Borders and businesses need to protect the certainty of one standard. Are there any other commissioners who have not spoken to this issue this morning . I dont believe i have. Can you hear me . Yes. Great. I would say i support the idea of a national floor, that makes a lot of sense to me, but i would be concerned about a law where that floor is too low or a law that invalidated stronger state privacy statutes or prohibited states from having the ability to innovation to fill gaps that arent filled by the federal law. Thank you. Mr. Chairman, my time is almost to expire. Lets go ahead, though, since we have not specifically heard from commissioner philips and commissioner chopra on that. Thank you. I thought we had from commissioner chopra. Mr. Chairman, i agree that a national law would be helpful. I do have concerns about deleting all of the state laws. The ftc has dealt with this in the past in terms of working with state laws, determining if theres conflicts, and then what is more protective. And i think we could go down that path again to make sure we dont delete states that decide they want higher levels of protection. Senator, this is commissioner philips. Can you hear me . Yes. Thank you. I just want to echo what my colleagues, chairman simons and commissioner wilson said about the need for a coherent and singular federal standard. Not only would this help businesses save costs and keep barriers down for smaller firms relative to larger. It will also help with another critical privacy issue we face, that is consumer understanding. Its easier for consumers to understand one standard. Let me thank the commissioner for that answer. Its a point that has not been made often previously. Thank you. And thank you, senator moran. Senator blumenthal. Thanks, mr. Chairman, and thank you to senator moran for raising the privacy issue. We are continuing to strive for bipartisan solutions, which i think should be within reach at some point, because clearly, his questions and the answers we received and most important, the feelings of the American People are we need stronger privacy protection, and we should continue to work to that end. But as important as new legislation is, the commitment to enforce the tools that the ftc has right now, on monday, twitter disclosed it faces an ftc fine up to 250 million for its misuse of account security information for ad targeting. According to twitter, this breach of trust lasted between 2013 and 2019. Six years. And this announcement follows twitters catastrophic and dangerous breach of dozens of highprofile accounts last month. Twitter has been under a Consent Order since 2011 for exactly these kinds of problems. An order that requires biannual audits and a comprehensive Information Security program. So i think that the public is rightly skeptical about the ftcs use of its existing tools and its inconsistent and inadequate enforcement of the laws already on the books, and i would like to hear what the ftc has to say about this issue at length, but i want to turn first to the issue of antitrust. The house hearings, i think, should give the ftc a greater sense of urgency about bringing an action based on antitrust against both facebook and amazon, which are within its purview. I want to ask chairman simons, can we expect some kind of antitrust action against tech firms that have monopolistic power and may have abused that monopolistic power by the end of the year . And what is preventing action now . Thank you, senator. I dont want to prejudge the outcome of an investigation, but let me say this. We are focused on, and this is the most important thing that we are doing on the competition side of the ftc, which is these investigations of the tech platforms. We formed a new group in the bureau of competition, the Technology Enforcement division. Specifically dedicated to investigating these types of companies, and they are incredibly busy. Theyre very active. And i have told them that what they are working on is the most important thing in the bureau of competition, and that they should do it as quickly and as efficiently as possible, and im very confident they are doing that. Have you given them a mandate that is action oriented . I think the American People want to see action. Oh, yes. I have absolutely. And i talk to them regularly. Let me ask you about some of the scams that have appeared in the wake of the pandemic, as you know, the ftc has issued 255 warning letters about these snake oil scams that have appeared promising cures. Its really the wild west out there. Warning letters simply lack the deterrent and enforcement value of actions. Do you plan more action to stop these kinds of consumer scams that exploit peoples fears about the pandemic and their search for treatments and cures . Yes, thank you, senator. We try to do what is most effective and most efficient to get the problematic advertising or claims off the internet. And so we are able to get out these warning letters very quickly, and so far, they have been extremely effective. Extremely effective. Overwhelmingly, the Companies Take down the problematic language within 48 hours, and where they dont, then we initiate Enforcement Actions. And we brought a number of those already. I think today, in fact, we announced three or four new ones, so we had seven of those already. Well, let me just interrupt. I apologize, my time is running out, but sure. We know from experience, i know as a former u. S. Attorney and a state attorney general that a warning letter means that the company can just come back and you can do an enforcement action, but the better course is to have a judgment on the books that can be enforced rather than have to begin the case all over again. Let me just ask you, finally, on the issue of privacy, in his dissent in the facebook privacy settlement, commissioner chopra criticized the ftc for not deposing facebook executives. Dont you believe that the ftc should depose Mark Zuckerberg in your ongoing antitrust investigation . I cant comment on the specifics of any individual matter, but it depends on the circumstances. What we do, its fact specific. Sometimes its important to depose the ceo, and sometimes its not necessary. But where its important and helpful, we try to do it. And the other thing i would say is, particularly with respect to facebook, we got we had emails from lots and lots of people. We did not need to get mr. Zuckerberg in a deposition for that case. Dont you think in the antitrust investigation it will be necessary to depose both zuckerberg and jeff bezos . Well, mr. Bezos works for amazon, and i cant comment. I understand. Separate antitrust investigations, but shouldnt right, i cant comment. Im sorry, i cant even comment on whether theres an investigation of amazon. The only investigation that is publicly known that our tech group is doing is facebook, and thats only because they have disclosed it themselves, so were able to confirm that. Other than that, we dont discuss individual cases. Fair enough. My time has expired. The credibility of the investigation is going to depend on its completeness and aggressiveness and seems to me that the public will be satisfied only if you do depose the very top executives of whatever company you are investigating. Thank you. Thank you very much, senator blumenthal. Senator blackburn. Thank you to each of you for the time to be here today. Mr. Chairman, i think that chairman simons, i think you know that the facebook compliance is very important to us in dealing with social media is very important to us. Youre hearing a lot about it from letters and notes that are coming to you. We are hearing a good bit about it. N okay. There we go. Unmuted. Are you talking about the facebook privacy order or are you talking about a facebook antitrust investigation . Lets take privacy first, and then we can go to antitrust. Okay, sure. So the order, the negotiated order settling the order violation section 5 case against facebook was finally entered, i think, on april 27th or 28th of this past year. It was in litigation in front of a judge in the d. C. District court. We know all of that. Where are you . Where do you feel they are on compliance . Are you 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 strike to make certain that you all can properly deal with this . Yeah, so i think i cant comment on any particular investigation of any particular company. But we are very focused on that order in particular. And compliance with it. If there is any problem with it, we will be on it. We will be active. But i cant 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 . What im saying is were very happy with the order. We think it really restructures okay. As we speak to whatever kind of legislative balance we need to strike to empower you to conduct enforcement to hold big tech accountable, because when we hear from tennesseans say theres a lot of conversation around this, but what are you going to do about it . So what kind of legislative action needs to happen . So i think what your colleagues you and your colleagues are doing in terms of a new federal privacy legislation is absolutely critical because our 100yearold statute is not up to the task and doesnt give us the authority we need. We dont have anything looking remotely close to what the europeans have with gdpr. Its really important for your work on the federal privacy legislation to continue. Okay. I have got another question. And im not going to have time to get through this. But looking at the invalidation of the Privacy Shield of the court of justice of the eu, and some of the europeans out of protection authority, they have signaled that they do not foresee a grace period to allow data flows to continue during the negotiation of a successor agreement, like that which occurred in 1516. So i would be interesting to know if any of you have had conversations with any of your dpa colleagues in europe about the importance to both economies of allowing these data flows to continue, and also, if you have a sense of whether or when there might be a final or collective decision on allowing data transfers to continue while a successor framework is negotiated. And chairman simons, ill come to you first, and anyone else who wants to weigh in on this, just raise your hand. Thank you, senator. So we are working with the Commerce Department and other parts of the administration. We stand by ready to help them in whatever way we can be useful to them. They are carrying the water on this. And you know, well have to see what direction they head in, and well support them as much as we can. Senator, this is commissioner philips. If i could just add absolutely. Thank you. I really appreciate it. A little bit of context. Back after the schrims 1 decision, the u. S. Government and the European Commission were already negotiating what became the Privacy Shield agreement. It was because of that ongoing negotiation that the european privacy authorities agreed to do what youre describing, which is stand down on enforcement and allow firms to continue to transact in data. I shared the disappointment of secretary pompeo and secretary ross at this decision. I do not think its fair to hold the u. S. To a standard that other countries cannot meet. I think the transaction in this data is very important, in particular for Small Businesses, and were going to do whatever we can to support the Commerce Department in its efforts and to continue to hold Companies Accountable to the privacy agreements they make. Anyone else want to weigh in on this . Im over time. I thank you, and i yield back my time. Thank you. Thank you, mr. Chairman, members of the commission. First thing i want to say is i just want to thank the commissioners for making it veryditivery difficult to determine who was a republican appointee and who was a democratic appointee. This is the way these commissions should operate. Its the way the Commerce Committee likes to do it, and its a real pleasure to sort of dig into the issues without necessary digging into each other. My first question is for chairman simons. On credit reporting. What actions is the ftc taking to verify that the credit reporting agencies are following the c. A. R. E. S. Act provisions and to make sure theyre accurately reporting the data . Thank you, senator. So yes, so we have investigations open. We brought some actions as well. We had a workshop that was specifically focused on accuracy with the cfpb, and were working with them as well. They have Supervisory Authority under the big three credit bureaus. And so we work with them and talk to them about accuracy issues in that regard. Can you talk a little bit more about that . Because i hwas in front of the banking committee. I dont mind a consultative education process, but im concerned where the enforcement stick is, and to the degree and extent the c. A. R. E. S. Act specifically instructs the big three not to report their forbearance as a negative credit event, i want to be satisfied that people have access to that information to know that the c. A. R. E. S. Act is being complied with and that the big three are actually doing so. Yes, so were monitoring for that. Yeah, i didnt understand your question. Were monitoring for that, and if we see something thats problematic, thats a priority for us. Thank you. Commissioner chopra, do you want to add anything generally speaking about credit reporting and about the sort of Public Policy question of whether or not consumers should have access to their own credit reports . Yeah, i really think were long overdue for broader reforms of what i see as a broken oligopoly, where consumers are the product. Theyre not the customer. The cfpb really is the lead on this because of their broader authorities, but i really want to see the ftc continue its focus on some of the tenant screening and employer background check abuses, because if we see some of this being misreported, youre going to see people 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 really figure out what were going to do long term about equifax, transunion, and experi experian, because its simply not working, this current system. I think thats right, and i think, you know, some of the folks who are exasperated by the big three and their conduct and their incompetence and their unwillingness to give in any way are sometimes characterized as wanting to undermine the ability to do, you know, properly underwriting for mortgages and car loans and everything else. Thats not what were doing. Were trying to make sure the error rate goes down and consumers have access to their own information. I remember being in a Commerce Committee hearing and one of the representatives from the big three said, well, our error rate is only 3 to 5 , which means that many, many millions of people are being prevented from having a job or a mortgage or a car as a result of the errors of these companies, and they just plug along profitably. Commissioner chopra, what do you think you can do under the ftcs authority here . Well, just to be candid with you, i think the congress rightfully stripped the ftc of much of its authorities here and gave it to the cfpb. I have obviously been disappointed at the cfpbs actions in this regard because i think theres much more they can be doing given the much broader panoply of authorities they have. I do want us to enforce the fcra, including with respect to whether certain large data brokers and tech platforms may be subject to its requirements but have been flouting it. But i agree, we need to reform the big three credit reporting agencies and its going to take time. But we need to introduce some real competition because its just not working right now. Thank you very much. Commissioners, thank you, mr. Chairman. Thank you. Senator caputo. Thank you. I want to thank all of you both for your testimony but also for your service. Greatly appreciate the c complexity of a lot of issues youre dealing with. In 2015, i started my West Virginia rise up program to encourage women to take on leadership roles and encourage future leaders in america. There was a recent wall street journal article that referenced a study that found that 78 of fifth through eighth graders, girls in particular, were lonely and isolated during this pandemic time. And certainly understandably so. And so it was also quoted that girls between 10 and 14 are spending about three to four hours a day on tiktok, snapchat, instagram, to stay connected. As children and teens turn to more social media platforms to stay connected, what is the commission doing to insure that companies who collect user data are not violating the childrens Online Privacy protection act . I would ask the chairman that question. Thank you, senator. So were monitoring the market very carefully. We have given advice to ed tech providers. We have given advice to schools, we have given advice to parents, consumers. And so, lets see, thats what were doing so far. And one of the things i think 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 you say. Its a matter of what youre doing may not be proper, even if you dont say anything about it. Well, i think obviously in particularly nobody could have anticipating this. And the availabilities obviously of platforms to younger children, probably maybe where some parents might have prevented the use of it or limited the use of it, now its become more difficult to do that because its the only way that a lot of teens and preadolescents and everything are keeping in touch. I am concerned about that. Im going to shift to another issue, to commissioner philips, on the made in america provisions. I know that there has been some lack of clarity in terms of what does made in america mean, what does it mean to you, what does it mean to a consumers perception . I know you do studies on that. Where are we on that made in america . Obviously, here again during this pandemic, when we saw our ppe was being made in china and a lack of availability, very frustrating, were going to try to do something about that here. Hopefully in our next c. A. R. E. S. Package, so do you have a comment on that, commissioner philips . Sure, and senator, let me just begin by following up briefly on your last question for the chairman. Its important also to note that the copa enforcement under this ftc, the five commissioners sitting here before you today, is as aggressive as it ever has been. That began with what was then a record settlement against a company that few americans had heard of at the time, tiktok. Were very glad theyre under order. It continues with our settlement with the new York Attorney general for 170 million in the youtube case. On made in the usa, we are continuing to do our enforcement. We had a big case recently against williamssonoma. Were also in the process of doing a rule making. I have to tell you, i dissented from that, but the reason i dissented is something very much in your power. That was i didnt think we had the authority to make the rule that we were trying to make. Thats a pretty easy legislative fix, even though legislation, as we all know, is hard. That is certainly something that congress can address and that i could work with you on going forward. Thank you. Im going to go to commissioner slaughter. She just gave me a little chat and said she had comments. So thats the beauty of technology. Yes, commissioner. Thank you so much, senator. I just wanted to echo your comments about the importance of thinking about how our children are being affected by all of the Online Activity that theyre engaging in. And 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. And i just would point out to you that copa does give us some specific authority for childrens privacy, but only for kids 13 and under. And only basically to give parents permission and to require reasonable Data Security. It doesnt give us the same sort of General Authority to engage in protection against abusive privacy and data practices that youre referring to, especially for teenagers. I really hope this is something that congress will think about as you continue to discuss data privacy legislation. It certainly looks like the data coming forward over in the last several months would support Something Like that. Thank you very much. I think i have probably used my five minutes. I appreciate it. And cute little baby. Thank you, senator. Senator udall. Thank you, mr. Chairman, and Ranking Members. Mr. Chairman, you can hear me, i assume. You bet. Okay. Throughout the covid19 pandemic, we have seen americans come together to support frontline workers. We have seen new 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 also bring out the worst who target vulnerable people. Thats why we have been thats why we have been seeing this, i think, a lot in numerous reports of harmful scams that put consumers at risk. As a former attorney general in new mexico, i know you recognize the need to work with partners outside of the agencies. State attorneys general have their ear to the ground. They hear directly from consumers. And many are strong protectors of state consumer laws. Th the working relationship with them is essential, and thats why i introduced the stopping covid scams act in the senate to empower federal and state authorities to do more to deter scammers and hold them accountable. So my question is, my legislation would allow state attorneys general to bring a civil action in District Court or state court to respond to covidrelated fraud under the ftc act. So a question for every commissioner, do any of you oppose authorizes state attorneys general to take action and respond to fraud under the ftc act . This is chairman simons. No, i dont have any reservations about that at all. And i agree completely and want to echo what you said about the importance of our relationship with the state ags. They are boots on the ground. They are terrific partners, and we doont couldnt do what we do without cooperating with them. Thank you. No concerns. I think its a good idea. Terrific. Thank you. Same. I think we want answers from philips, chopra, and wilson also. Senator i would like to take a closer look. A lot pair state enforcement with ours, and that tends to be a really good thing. A lot of states, though, also have what we call the ftc act. Senator, i agree with your proposal. Great. Thank you very much. We would like to commissioner philips, we would like to continue the discussion with you and hopefully get to a place where you feel comfortable with attorneys general doing that. Absolutely. Thank you. You bet. My second question goes to the panel authority. My bill also enhances the ftcs Civil Penalty Authority. This is the same bill talked about with regard to the attorneys general. Currently, ftc enforcement begins with an administrative complaint against a potential scammer. Then theres a cease and desist order or a settlement. Under current law, the commission can only then seek Civil Penalties in court if theres a further violation. This is months to potentially years of court action. As we have seen the current Health Crisis moves quickly. New mexicans have died due to contaminated Hand Sanitizer with false labeling, families fear for their health and are willing to spend their money on questionable products, making false claims. Chairman simons, would enhancing the ftcs authority to use Civil Penalty Authority protect consumers in the current Health Crisis . We support that. The other thing i would say is we really need 13b, because with 13b, in most cases through that iterative 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. So seeing that would be important. The chairman pointed to an issue that i think is little noticed but is also very important, which is that when we have Civil Penalties we usually have to go through doj. I would rather see those be coupled with independent litigating authority for us on the civil penalty front. And i also agree with the chairmans point about 13b, which is not only gives us those important tools to go into court, but it also allows us to return money directly to consumers, and what we want to do at the end of the day is make harm to consumers whole. I think Civil Penalties coupled with 13b authority that is clarified are really important to give a big stick, help deter bad actions, punish companies that have wronged consumers and also return money to keeconsume who have been wronged. Thank you so much, commissioner. I have a couple questions for the record that i hope youll answer with regards to refunds for flights and other travel arrangements and then some of these bots that are taking Real Advantage of consumers and the marketplace. So with that, i would yield back, mr. Chairman. Thank you so much. Thank you. Senator thune. Thank you, mr. Chairman. Chairman simons, as you know, reforming section 230, the Communications Decency act has been hotly debated here in congress. Its the law that prevents social media platforms for being sued for content users post on their platforms. I introduced a bipartisan bill with senator schotts on the issue. Its known as the pact act, which would stipulate the immunity does not imply to civil Enforcement Actions brought by the federal government. The doj recommended this particular provision in its recently published list of recommendations for reforming section 230. My question is how would consumers benefit from reforming section 230 to insure 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. So we have a number of instances, its actually fairly common, for us to go into court and have a defense put on us relating to section 230. So it would be very helpful to us to avoid having to deal with that, and allow us the ability to go not only after the platform participants but in the right circumstances the platform itself. I would direct all commissioners and it has to do with the bill that Congress Passed last year that the president signed into law, called the trace act. And among other things, it required that the fcc register a single entity that conducts privateled efforts to trace back the origin of Illegal Robocalls and i was pleased to see the fcc did fulfill that requirement last month. Can you speak to the ftcs efforts on engaging with industry initiatives like the u. S. Telecom Traceback Group and whether this Public Private partnership has been successful in identifying illegal robocallers . Yes, senator. Thank you. So absolutely. This has been extremely helpful for us. The traceback organization is very effective, and we are just overjoyed with their progress. The other thing i will say is what were doing is were going after Voip Service Providers who often serve as the entry point for scammers into the u. S. Telephone network, and we sued a company in december of last year, globex, and then we sent a bunch of warning letters to other Voip Service Providers and say look at this, you may be liable. These people are already being sued. You may be next. We think that may have had some impact on a decrease, on a substantial decrease in robocalls since that time. Anybody else, since that time. Anybody else quickly . Senator, just to add briefly, in the trace back, as you know, it also calls for the fcc to convene the Hospital Robocall Protection Group to come up with best practices for state and local governments for telecom and in particular the Public Health that robocalls present. We had the first meeting last week and meetings are continuing and we hope to have a report out according to the timeline indicated by congress. Excellent. Thank you. Last question, very quickly, i think here i have a little bit of time left. And mr. Chairman, do you expect to exercise discretion and refrain from bringing any Enforcement Actions 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, what we intend to do is make companies fulfill the promises they made under Privacy Shield. If they have made privacy excuse me, if they made promises and you sign up for the Privacy Shield you have, youre going to protect the data in a certain way and when you are done youll delete it, those type of things, were going to enforce with respect to that. Okay. And my understanding is that the issue of preemption and the California Law has been covered extensively already. But so ill my time is running out. Ill defer that one and perhaps may have a question for the record about that. Thank you, senator thune. Senator baldwin. Thank you, mr. Chairman. A recent ftc press release noted that Online Shopping complaints that the ftc has received during the pandemic have surged. The ftc has pointed out a or has put out a shopping online guide that recommends Online Shoppers get the sellers physical address and inspect product descriptions closely. These common sense suggestions seem aimed at ensuring that the buyer has the same information shopping online as during the pandemic as they would if they were shopping in person. Before i go further, i would like to just ask each commissioner if they agree that generally American Consumers should seek the same information shopping online as they do in person and if you could just briefly answer yes or no, starting with mr. Chairman. Yes. Mr. Phillips . Yes. They generally seek the same information. Mr. Chopra. Yes. Miss slaughter . Miss wilson . Yes, i agree. Okay. I think i missed miss slaughter, but let me carry on. I know that many Consumers Want to buy American Made products but they cant verify the country of origin of items when theyre shopping online. In order to ensure that online consumers get the same access to country of origin and seller location information, that in person shoppers have, i introduced the cool online act with senator rick scott back in may. The bill requires Online Sellers to provide buyers the country of origin label for products that they are selling. With more and more consumers buying goods online during the pandemic, this transparency is more important than ever. Commissioner chopra, could you please share if youre supportive of the goals of my cool online act and explain the role you see the ftc playing in this important issue for American Consumers. Yes, there is no question that there are so many products where Consumers Want to know where they were plemade, particularly during the pandemic. Ive had discussions with many major ecommerce platforms and ive been very concerned that they are not listing the country of origin, exempt for textile wool and other things that they are required to and i think it needs to change. They should disclose country of origin for those goods and in as much as that they are lying about it, that can create some enforcement liable and i think this is a good way to create more information for consumers. Thank you. In april, i joined my colleague senator holly in sending a letter to commission urging an investigation into the consolidation of the meat packing and processing industry. And its impacts on consumers, farmers, workers and our nations food supply. During the covid19 pandemic, weve seen severe outbreaks of the virus among workers at meat packing facilities in wisconsin and elsewhere in the country. Though the pandemic has brought many of the issues into stark relief, the concerns around consolidation have been simmering for years. Commissioner chopra, i know that a previous question in this hearing about consolidation in the meat packing industry, but i want to hear if you agree that concentration has contributed specifically to Workplace Safety issues and pricing issues and what do you believe the ftc as well as other federal agencies could do to address these problems . Yes, i agree. It was a hundred years ago that the ftcs reports exposed a lot of the abuses by the food and the meat packing industry in particular. In 1921 congress striped some of those authorities to enforce those laws for the ftc. But we still retain our industry wide Investigation Authority under section 6 b. I think the usda needs to increase its enforcement and its rulemaking to change the undo preferences standard. I think theyre going in the wrong direction and i think the doj, all of us, need to really be cracking down on this. It has some real impacts for those of us eating at the table as well as those working and everyone in our Food Industry. I did note that miss wilson said she had a comment on this issue with the chairmans indulgence, could we miss wilson . Thank you, senator, i appreciate the opportunity to address this issue. I think actually while consolidation might be a concern, one of the significant issues that we may not have to be paying sufficient attention to is the fact that laws and regulations that are designed to apply to some of the larger Food Producers and meat producers impose significant costs and compliance issues when theyre applied in the same way to smaller farmers. And so smaller farmers who need to grapple with these massive Compliance Costs, not even designed for them, end up having to exit the business. There is a fantastic book on this topic called everything i want to do is illegal. So i think revisiting the way in which we regulate Small Farmers could perhaps help to reintroduce more competition into the food sector in the United States. Thank you. And thank you very much. Our next questioner will be senator scott. But we heard there was a question about the senator scott, could you hear us. I could hear you perfectly. Can you hear me. Youre recognized. Thank you. Chairman, just to follow up on what senator baldwin was talking about, i introduced a act which will require online retailers to list the country of origin for each product they sell and i joined with senator baldwin to the country of origin online labelling act which would give the ftc over such laws. The prime act would also require app stores and just to display the country of origin for apps in the market place. So consumers know what apps they download are developed and they could make good decisions. I think weve seen this with recently with tik tok. So im concerned, as i think all of us are, about companies influenced by the Chinese Government like tik tok because they have to adhere to the demands to spy, steal user data and sensor any government the government wishes and weve seen that with tik tok. I dont think there i think we would all agree no american should be subject to this sort of risk. And well see if tik tok becomes owned by a u. S. Based company and even if we do we have to be careful about back doors. My question is what enforcement measures and oversight does the ftc have to ensure Company Operating in the United States with access to personal identifying information disclosed to users where the company is housing that data and how theyre using weve been relying on the congress to do that and you colleagues on the committee and elsewhere. Okay. Have you seen any legislation that has been proposed that you like, with regard to giving you the authority you need . I could get you something on that. Weve given Technical Assistance on a bunch of statutes and wed be happy to provide that to you. So, i mean, first off, what senator baldwin and i are doing with regard to looking at apps and products sold online, do you think if it is the right approach or do you have suggestions that we should change to make sure our goal is accomplished, assuming we could get this passed . Id have to talk and consult with the staff. I havent had the opportunity to look at your legislation in detail. Im sorry, sir. Senator scott, if i could add, one challenge that i support i support the goals. One challenge that is an emerging issue among the Technology Community is verifying the country of origin for software code. This is obviously something that the d. O. D. And the Commerce Department have been thinking about. It is extremely difficult in certain circumstances to verify. It is not physical. And it is going to be a more emerging problem as our whole Industrial Base as well as consumers are thinking more about supply chains and whether they might be back doors or theft from adversarial state and nonstate actors. That makes sense. Senator scott, this is commissioner phillips if i could just add briefly, whenever we about enforcement against privacy and other enforcement against companies that are abroad that have a set here in the United States, we would be remiss not to mention the safe web act and that passage set to expire is very, very important for us. Not only on our own but in particular working with our partners abroad on cases that as cyber cases do cross boundaries. When is that expiring . I believe later this month. Okay. All right. Does anybody else want to respond . Okay. Do you have does the ftc have the ability to require online retailers to disclose the country of origin for either products or perhaps understanding what you just said about the difficulty on the app side because of where code is produced. Do you have the ability to do this without legislation . Yes, senator, my understanding is that we have certain rulemaking authorities that could be used for that. It may be potentially cumbersome. There are certain statutes that directly require country of origin labelling for textiles and wool and other products but not a general requirement, so legislation would obviously make it much more expedited. Okay. Senator, this is commissioner wilson. I do believe that more Information Available to consumers is always better. It will allow them to more accurately evaluate the quality and value that there is product and services may offer to them. And so i think this is definitely a good idea. Okay. Thank you. Thank you senator scott. Thank you chairman. Thank you, sir. Senator peters. Thank you, mr. Chairman. And thank you for putting this hearing together. And each of the kpigsers, appreciate your testimony here today as well. My first question is for commissioner phillips. On june 5th, one of michigans largest Health Care Providers finished investigating a data breach that occurred in january. They found that around 6,000 patients had information possibly exposed as a result of this breach. The system that assessed accounts contained personal and protected Health Information according to the system. This included patient names, dates of birth, diagnosis, the codes, procedures, treatment locations, treatment types, prescription information, patient account numbers, pretty extensive information. So my question to you, because i know in your Opening Statement you discussed the need for Data Security in particular, knowing that this technology is constantly evolving and evolving in a rapid fashion, what can the ftc and congress in particular doo to ensure that companies are doing all they could to protect this data especially when it comes to patient data . There are things we can do here. I think a regime that includes a very specific Legal Authority that captures some of the work we do already ensuring that companies undertake adequate processes to make sure theyre protecting the kind of data they have. I think Rule Making Authority is appropriate here and i think civil penalty is appropriate here. My view is that unfortunately we dont always have the people who could efficiently protect data adequately protecting it. The cost is bourne by others. There are externality and a civil penalty regime could help right that structure. Well, if i could senator, may i add something to that . Absolutely. One of the things that i think were going to need to confront is there is a change in my view over the last ten years that much of the impetuous for stealing certain stealing for stealing personal data was identity theft. To open up a credit card in someone elses name. But were seeing something very different. Equifax, anthem, marriott, the Justice Department said these were not identify thieves, they were affiliated with state and nonstate actors related to china. And i think were now going to need to be thinking about really safeguarding our entire Data Security even in the commercial context to make sure that adversarial parties could not collect details dossiers on each of us for the purposes of weaponizing it, interfering in our country and manipulating us. So i think the stakes are much higher and the harms are on a different dimension than they were even just a few years ago. Senator, this is commissioner wilson. If i may adjust one thought. Yes, please. I think your question highlights one of the issues we need to confront. Privacy legislation and Data Security legislation essentially are two sides of the same coin and it is important to remember that many Health Care Providers in the United States are classified at nonprofits and so in Data Security and privacy legislation, the ftc should gain jurisdiction to have authority over these nonprofits because, as you point out, they do have significant Sensitive Health data. And so it is just another reason that we need to get privacy legislation coupled with Data Security legislation in place to protect consumers. Clearly. And i really follow those lines about more of the information bxing available. Ill direct this to commission slaughter. According to media reports, data brokers are buying and selling Data Collected from americans phones and have even been tracking americans at protests or at places of worship. And while smartphones allow customers to choose whether or not to allow an app to have access to their location data, americans have no ability to control whether the app developer or the partners sell that information to third parties. So my question is do you believe that americans have sufficient control over secondary uses and the sharing of very Sensitive Data and if not what is the ftc doing to address this problem . Thank you so much for the question, senator. Think as really good point. No, i dont believe americans have enough control for a number of reasons. Our current framework is, as you suggested, basically a in tnoti and consent framework, that Companies Tell Us what they are doing and you say yes or no. But as you know, often that notice is buried in lengthy unreadable privacy policies that consumers often have no choice but to click through to get to access the service. They condition go back and say yes i agree to some sprprovisio and none of that is for tertiary uses down the line so the current ftc authority is basically premised on deception with some unfairness authority, it really doesnt reach that kind of behavior that is deeply concerning and deeply problematic. So i think youre highlighting a really important issue that should continue to be a focus for the committee and i do think in the meantime, the commission should think about where we can apply existing authorities that we have, whether it is standard u dap enforcement or whether we dust off our mag moss making authority which we rarely use because as commissioner chopra pointed out, it is cumbersome and undertaking that process is important to start and not wait for congress to act because these things are happening now in realtime and creating real peril for americans. Senator peters, could we let other members answer on the record. That would be great. Thank you senator peter. Senator lee. Thank you, mr. Chairman. Thank you commissioners for being here today. The ftc first implemented the contact lens rule after Congress Passed the fairness to contact lens consumer act. The rule at its heart is simple. It required prescribers to give consumers a copy of their contact lens prescriptions. The reason is also simple. That contact lens consumers, as congress determined and as the ftc has reiterated, need to have the opportunity to shop around to find the best deal. Now, senator klobuchar and i wrote to the commission raising concerns that federal law was not being properly implemented and enforced and that consumers dont always have access to their prescription. And i was grateful for your response. I want to thank each of you for your unanimous agreement to finalize the new contact lens rule to help protect consumers against this kind of protectionism. Unfortunately im hearing that there some efforts underway to delay this important rule. And so i want to ask a couple of questions about that. Chairman simmons, well start with you. If this rule is delayed, particularly now when consumers are facing significant economic hardships and in connection with the Global Pandemic and trying to socially distance, couldnt consumers end up being harmed and specifically couldnt it end up making it more difficult for consumers to shop around and to purchase contact lens from their retailer of choice and at a lower cost. Thank you, senator, for that question. Yes, absolutely. The whole purpose of this rule [ inaudible ]. Chairman simmons, are you still there . It sounds like we may have lost you. Chairman simmons, you were saying the whole purpose of the rule and then we lost the connection. Can you hear us, sir . Okay, mr. Chairman i think senator lee you were making such a poor point there that no, i think technology went out. I think it is much more to do with the chairman phillips was emotionally overcome at the importance of this contact lens to consumers. Can the witness hear us. Because we do need to get an answer there. Senator lee we had some connection problems. I have questions of other members of the panel and move back to chairman simmons if and when we hear back from him. Lets move to you then, commissioner phillips, optometrists argue in some cases, not all, but some are arguing that the Compliance Costs associated with the rule are great. Some have even argued that they cant do patient signatures because that would require pens to be disinfected between uses. Putting aside for a moment the fact that during covid19 optometrists should be practicing basic sterilization, did the commission examine the Compliance Costs and, if so, what were the findings . Absolutely, senator. As you know, the contact lens rule that we recently promulgated was a very long process involving two proposed rules and taking into account some of the concerns about Compliance Costs about how all of those things are reflected in the final version of the rule that we published. But as you noted earlier, the concerns that animated congress and us also include having a degree of competition in the market, allowing and making sure that the consumers have available to them their prescriptions for contact lens and that sales for those lens not only be done by the prescriber but also by other sellers. Thank you. Commissioner slaughter, in your statement regarding the contact lens rule, you actually noted that congress could go further to empower consumers. What additional reforms do you think congress should perhaps consider in order to stop this kind of market protectionism . Perhaps weve lost commissioner slaughter as well. I could move on to a subs kwequ question. I would like to talk briefly about another issue. Our country is in a nationwide debate regarding online political bias and censorship among certain big tech firms. It is sad to think that internet plats that boast the ability to connect hundreds of millions of people and allow for the rapid dissemination of ideas and opinions believe they know what is best for the American People, to read, to watch and to listen. To know what opinions are dangerous, even when they have no technical expert hes in a particular field. A number of members, including myself, are asking whether Congress Must amend current law as part of the solution and whether the ftc might play a new role in that. Chairman simmons, if youre back, id like to ask you, evaluating whether a tech company is following the terms of service, it is something that the ftc currently does. But having the ftc evaluate political view points is much broader. Would ftc evaluation of online content for political bias or neutrality implement the First Amendment and how would the ftc go about evaluating for such bias . Were informed, senator lee, that chairman simmons had to log off and try to log back on. Are you back on, mr. Chairman . That may not have been accomplished. Lets i ask the same question of commissioner phillips. Yes, senator. Look, i think the process of content moderation is something that big firms face. It is something that a lot of small firms face. Im not sure if my answer was clear earlier in the hearing, but we all recall with horror when press reports about the awful shoot at the tree of life synagogue in pittsburgh included a platform called gaf. This is not all about large tech companies. It is a difficult question. At the end of the day, though, when it comes to moderating speech, the First Amendment is implicated and that is something that we have always taken into account when weve done any of our work, or related to the content of speech with respect to kid video games going back decades. And, of course, the First Amendment is something that we have to keep in mind as we went forward. Thank you. Thank you, mr. Chairman. Thank you. Senator tester. Thank you, mr. Chairman. I love this committee. This is been a great hearing and i appreciate the commissioners. I just want to make a few statements and then well get to my question. Number one, i could not believe ow concerned people are about textiles and electronics when it comes to country of origin labelling yet we dont give a damn mr. B where the food we put in our body comes from so maybe i need to use you guys to enforce labelling for food, at least online food. And the second thing is i want to go back to commissioner wilsons point on Smaller Companies, you are absolutely correct and when the 2012 fair food modernization act came by and i put in an amendment to exemption Smaller Companies and we got it passed and guess who came to capitol hill and acted like the world was going to end, the big food companies. And that is where i come to my question, for you, mr. Chopra, and it deals with consolidation in the packer industry but it is going to deal it with a packers and stock yards act respective. Im going to tell you, this isnt a over statement, we have medium and small size feeders that are going broke and it is going to change the food chain for this country from a consumer standpoint and from a Food Production standpoint. We authorize the usda to put forth new rules on the packers and stock yards act and they came back with a document that isnt worth the paper it was written on. So my question to you, mr. Chopra, what is your suggestion so it works for folks in production and agriculture and folks and consumers. Well, i just have to say that in the submission i made to the usda, i think that the rule making theyre doing is going to legalize lots of the worse practices that allow them to do everything from rigging the weights and measures, to giving poor product and then penalizing farmers for doing it. So there is we need to do a real rework of how that whole thing is working. And we feed to also more answers from the usda about what is going to go on. There is almost no enforcement on some of these things. So i also just add on country of origin labelling, even under the usda guidelines, meet could come from overseas and if it comes into a factory by a u. S. Meat backer it could be labelled as product of usa. It is totally inconsistent with every country of origin stand and ard it feels like a give away to me. Youre correct and it is a giveaway. And guess who suffers. The people in production suffer because youre bringing in crappy meat with brazil and argentina and the consumer doesnt know the difference. So we agree. The question i have for you, mr. Chopra, before i go to commissioner wilson, is there anything that the ftc could do about it or congress has to get off their butt and do it. I would Push Congress but legally and im happy to share more with you and your staff later, our authorities are much different when it comes to poultry products and margarine versus other types of meat. The Justice Department does a lot of antitrust work. Our efforts are really on retail but we have to start looking at the whole food system. Whether it is food delivery apps, whether it is supermarkets, or whether it is the exploitation of farmers. And i just want to share, one of the reasons that were seeing more poverty, more opioid issues in many of the communities is being unable to sell and make a livelihood. Last week were seeing that a lot of those who raise lamb are not going to be able to get it to market and that is going to be devastating. Well, let me tell you, i couldnt agree with you more. And the fact is that were screwing things up by not enforcing the rules that have been put on a hundred years ago. They still apply today. They need some modification and need to make them work or were all going to turn into surfs working for the big man. So thank you for your commission. Commissioner wilson, i want to talk about Something Else that is near and dear to my heart and that is the right to repair. In montana this weekend we harvest peas and winter wheat. I was able to replace my combine because it is about 15 years old. Today it is a different story when you buy this equipment. Because of the technology in it. And by the way, this isnt about cell phones. You could throw this damn cell phone away, i dont care. I could go buy a new one for 300. It cost me 300,000 to buy a combine if i cant repair the damn thing. So could you give me a little input on what we need to be doing on the right to repair stuff. Because it is going to put, once again, people in production of agriculture out of business and consolidated at the ground and at the factory level and consolidated from top to bottom and it is going to ruin it for this country. Youre muted. Sir, thank you for the question and i completely agree with you. Obviously right to repair is an issue that the ftc has explored in a recent workshop. There are competition issues and a bedrock principle of competition is that youre not tied to a manufacturer to do repairs on your equipment. We have a Matthew Ferguson tractor on our farm out here in West Virginia and my husband broke a couple of bands using the chipper and replaced the bands himself because, frankly, the dealer here isnt great. So the right to repair is important. I see you laughing. Yes, we have an issue with the Massey Ferguson dealer here. But at the same time, there are legitimate Consumer Protection concerns with respect to certain products. For example, if you put the wrong battery in a certain product, it might explode. So the ftc as it has done with the contact lens rule is looking to balance the benefit of competition with the protection of consumers from exploding products or products that are harmful to health. But i do believe, sir, youre correct, that there are manufacturers who invoke safety concerns, in fact, not to protect consumers, but to prevent competition for repairs in the after market and that is just another cost that our Small Farmers are facing and that we need to eradicate. And unnecessary. And i want to echo senator schotts saying i appreciate the bipartisan work that this commission does. Thank you. It is senate cinema. I want to thank the chairman for holding this hearing today and thank our witnesses for being here. As the pandemic creates significant challenges for American Families and Small Businesses, scammers are using the pandemic as an opportunity to defraud americans including our seniors. This week one of arizonas major private Lab Companies sonora quest alerted patients that scammers are posing as sonora quest representatives to steal personal information from patients. This is just one troubling example of the thousands of covid related exams arizonans reported to the federal trait commission. The scams have cost millions of dollars in losses for arizona families. But theyre not just a financial concern. Covid scams also endanger the health of the public who could be defrauded into believing that certain products could prevent or cure covid which, of course, as we know, is not true. And looking forward to working with the ftc to make sure you have the tools you need to protect arizona families and Small Businesses from deceit and abuse. I think chairman simmons is not back on yet so ill direct my first question only to commissioner slaughter. I introduced the bipartisan seize act with senators partner and capito to stop false advertising and other deceptive ads during the coronavirus pandemic by increasing civil and criminal penalties on scammers, ensuring that scammers face serious penalties for lying to the public about covid. Do you support the goals of this legislation . Senator, this is joe simmons. I showed up. I had power outage at my house and im on battery power. Wonderful. Im so glad. So im a little bit in the dark here as you could see. Because i have to light. But i do support the goals of that legislation, absolutely. But i would have to say this, in terms of legislative priorities, at least from our standpoint or my stand point at the ftc, your time is very valuable and [ inaudible ]. Senator cinema, i never like to speak for the chairman, but ill just i believe what hes probably going to say is that he would welcome congressional action on section 13b to make sure that we could get the illgotten gains and return money to consumers. And he could correct me later if im wrong. But that is what i believe he was going to argue. Well, i appreciate it and thank you for stepping on that. Well follow up with him after the hearing to get those details. And is commissioner slaughter on . I just tried to change my audio. You could hear me now . Yes, i can. Okay, great. I dont know what the problem was. So i wanted to say, yes, i think the goals that youre talking about are extremely important. Stopping scams is parent part of the bread and butter for the ftc and it is never more important when bad actors are preying on vulnerable consumers and impaling not only wallets but health and safety so i applaud you for working on that and look forward to continuing to work with your office and your colleagues on these issues. Thank you so much. Commissioner chopra, due to the coronavirus pandemic, many arizona Small Businesses are struggling to get by and entrepreneurs are doing everything they can to stay afloat. Some bad actors are using difficult times to take advantage of Small Business owners with unfair and deceptive practices related to financial assistance. Could you tell me what the ftc has done to protect Small Businesses from abuse and what should Small Business owners know when looking for financial assist abc rig assistance right now. Thanks for that question. Weve sued two actors in this space, including one very recently that i think we believe were violating the law in order to profit off of Small Business ownerss pain. One of the things that is concerning to me is that the contract terms, some of them are completely unfair in how theyre executed. And essentially require that a Small Business owner automatically plead guilty when theyre sued. This is called the confession of jum. So i really hope that Small Business owners, i know theyre struggling to work with many of the largest banks, a lot of Community Banks have been much better in delivering ppp assistance, but really going after these high rates sometimes 4,000 loans is just setting Small Businesses up to fail and we just cant have that. Thank you. I know my time is close to expiring. Im not sure if the chairman is back so im going to go forward and ask one more question of commissioner slaughter. As i referenced earlier, arizonans are being targeted by covid scams such as the sonora quest poster scam and we need to make sure enforcement have adequate resources to protect arizona families and return stolen money to arizonans. Given the increase in scams during the pandemic, how could the ftc best use Additional Resources to protect arizonans and what authorities do you need to ensure that victims of fraud do get their money back . Thank you, senator. This is a really important question and i appreciate your attention to it. In terms of as the chairman and some of my colleagues have noted, the ftc has been doing its work in a very substantially underresourced way for several decades and that has never been felt more acutely than right now as were dealing with the pandemic issues and the general underlying on going work of the commission. So i think whatever appropriations the congress to give us would be able to be put to very good use on the behalf of the American People. In terms of authority, and returning money to harmed consumers in particular, i think the two things that were talking the most about are clarifying our authority under section 13b of the ftc act and the provision that allows us to ill gotten gains and return money to consumers. I think that is one of the most important things that we do and right now that authority is under attack in the courts. We have verification from congress on that point is important. And Civil Penalty Authority is helpful to create leverage with companies to deter bad actions and help us in our negotiations and keep the fraud from happening in the first place. So, we cant return Civil Penalties to consumers, that money goes into the treasury. But i think it is still useful for us to have a bigger say in order to prevent the fraud to happen from the beginning. Thank you so much. Thank you, mr. Chairman, for holding this hearing today and i do yield back. Thank you. Senator cinema, this is senator jackie rosen from nevada. Im not sure that chairman wicker is on so i believe that im the last senator and i will ask a few questions and we will close this hearing out. I want to thank you for being here today and commissioner slaughter, i want to tell you that you really exemplify during this pandemic what so many families are going through, trying to balance work and childcare and all of that and i appreciate you sharing your beautiful sleeping baby with us today. It reminds us of all of the important work we have to do to protect things for the next generation. But i want to talk just a little bit about note scams. Nevada is home to thousands of immigrant families that make a diverse fabric of our state and of our nation. And almost 30 of nevadans identify as hispanic or latino and our scammers have targeted members of communities as they go through the immigration process. We know one common form of deception are the while public notaries may perform the duties of attorneys in some latin american countries, it could they practice law and give legal advice or accept Legal Consultation fees here in the United States. Nonetheless, bad actors will suggest they could guide an vid through the u. S. Immigration process even though they are not qualified or authorized by federal law to do so. We know that only a lawyer or federally accredited representative could provide someone with legal advice and so therefore so many in my state are falling prey to these scams. In response in 2015 the federal trade commission released a novel to raise awareness about not ario schemes in the Latino Community and since then nevadas chief Deputy Attorney general mark kruger indicated that notario scams are expanding even broader into the Aapi Community and our ethiopian and nigerian communities. So to mrs. Slaughter and mr. Chopra, although the 2015 increased awareness about the scams in our Latino Community, we like i said we know fraud is rising in many of the mine ort communities, what other types of outreach or resources are you doing with the ftc to protect individuals from notarios and other kinds of fraud and how are you working with our state agencies and communities to prevent this . Ms. Slaughter, you could go first. Thank you, senator. And i want to thank you for your kind words about the baby. And i just want to note on behalf of all of the working parents out there, i appreciate everybody saying nice things about how easy this looks, it is really hard. So i want to have a moment for all of the families trying to juggle childcare and their professional responsibilities and acknowledge that it is a really, really challenging time. I appreciate the support from everybody on the committee. In terms of your question, i think it is a hugely important issue. Paying attention to scams that tarkt our most vulnerable communities should be among the highest priorities we have and in addition to the outreach that we do, we could work with our state partners and weoch host local events with Community Organizers and groups and i work with state a. Gs to raise awareness to prevent the scams. We need to do enforcement when they happen where possible. But we would rather they not happen. Mr. Chopra, anything to add . Yeah, thanks, senator rosen. When it comes to notario fraud, this is an orn going problem now. It is actually pretty difficult to enforce on a one by one basis. And one of the things that i think we have to start thinking about is more criminal sanctions and also what are we doing going after the plumbing of some of the rings of moblike fraudsters. We need to look at how theyre moving money. I think we have to look at this more with cracking down on a mob mentality, and organized crime rather than one by one. So, it is definitely a huge problem and its worrisome. So we have to look at this systemically and not just one by one. By the time sometimes we find out about it, the people that have been affected have just gone really through such a terrible experience and i like to look forward to working with you and figuring out what we could do about that. But for the last question, i want to talk just about what is on everybody elses mind, too, a little bit. Is unemployment and and pii. The coronavirus hitting nevada economy harder than any state in the nation. I dont know if you know that. We have unemployment over 30 in april. It was the highest in the country. It is still, i think, the highest in the country. Our average is about 15 now. That was in june. Well wait to see what the numbers are coming back up. With half a million nevadans filed for Unemployment Insurance since march 14th. Again were seeing scammers an criminals and defraud people and hack into the system and taking that personal identifiable information and doing phishing, impersonation scams and the impact could not be underestimated in nevada, thousands of families are waiting on Unemployment Benefits because were having to weed through some of the hackers and scammers, whatever you want to call them. And so as the Agency Charged with protecting consumers personal information you at the ftc have a significant role to play and we want to just quote a little bit from the ftc that using Law Enforcement policy initiatives, consumer and business educations should protect consumers personal information, that is what youre charged to do. So let me ask i thoent think chairman simmons is on, so i see there mr. Chopra and ill ask you first, how much time and resources is being devoted, do you know know or anybody that is still on, i cant see everything on my screen either. Sure. And believe the chairman has joined. Okay. So whoever that could answer, i see some blank screens, some initials. It is the joy of working this way. How much time are you devoting to this, because it is not just a problem in nevada, it is a problem everywhere and hardworking people are not able to pay bills because we have to take so much time to stop the scammers from stealing the hardearned tax dollars that were using on Unemployment Benefits right now. Chairman simmons, are you on . I doan hear him. You could hear me . Yes. We can now, thank you. I could hear you. Like i said, the power went out and my jet pack went out. But i got another battery supply. Hopefully that will be okay. So were doing at least two different types of things. One is were seeing people over this kind of stuff. And the other thing is that we have incredible amount of outreach on all levels, were dealing with first of all we have an ftc website that deals with all of these type of scams relating to coronavirus including the financial ones. Weve got we have our folks out all over the place doing media and they are doing meetings and teletown halls and that type of thing. They did one effort with the aarp that was participating with 800,000 people participated. So it is all our regional offices. We have boots on ground there. Theyre out there all of the time doing this kind of thing. And then were doing it online and then were bringing Enforcement Actions. Do you think there is a role for you to partner, this is my final question for you, chairman, is there a role for us to partner and you to partner with our state unemployment agencies, of course, during the pandemic everything is turned on its head where you might not partner with them but in this extreme case, with every state, everybody applying, what is the role that you could do to help states like mine who are really suffering with a lot of what could be a lot of potential fraud. So one thing i would say is that we have all kinds of partners and theyre very important in terms of making our work productive and effective and using our scarce resources. And i dont see why we wouldnt at least talk to the employment offices and see if there is something that we could do together to stop this type of horrible thing from happening. Well. Good, im going to have my team reach out to. Maybe there are ways to get help out there because i know it is not just hurting my state but others. I appreciate you. Im telling you the baby was good. You had your power up and down and were all in and out and all of the technical difficulties today but i wan to thank everyone for taking the time to be here today and for the hard work that you do. And i know youre probably all happy to hear this as considering with all of the challenges weve had that that concludes hearing. And the hearing record will remain open for two weeks. During this time senators are asked to submit any questions for the record and upon receipt the witnesses are requested to submit their written answers to the committee as soon as possible. I thank you again. Please stay safe and healthy and this hearing is adjourned. Thank you. Thank you. Weeknights this month were featuring American History tv programs as a preview of what is available every weekend on cspan3. Tonight at 8 00 eastern, a look at manhattan project. George Mason University history profess yofr Martin Sherwin details the development of the atomic bomb beginning with the discover of fission through the bombing of nagasaki and hiroshima. Enjoy American History tv this week and every weekend on cspan3. This week marks the 75th anniversary of the atomic bombings of hiroshima and nagasaki. Watch the washington journal live thursday at 8 00 a. M. Eastern for a discussion about the bombings with ian toll, author of twilight of the gods and grandson of president harry truman. Then on sunday watch American History tv and washington journal live at 9 00 a. M. Eastern as we look back at how the bombings ended world war ii and the legacy in decades ahead with Richard Frank author of downfall, the end of the Imperial Japanese empire and peter cuss knick from Nuclear Studies ibs institute. Join with calls, facebook questions an tweets. Watch the 75th anniversary of the bombing of hera shima and nagasaki this sunday on cspan and American History tv on cspan3. Cspan has unfiltered coverage of congress, the white house, the Supreme Court, and Public Policy events. You could watch all of cspans Public Affairs programming on television, online, or listen on our free radio app. And be part of the National Conversation through cspans daily washington journal program. Or through our social media feeds. Cspan created by americas Cable Television companies as a Public Service and brought you to today by your television provider. Next, a house hearing on Sexual Assault in the military. After the death of Vanessa Guillen at ft. Hood in texas. They reviewed how Sexual Assaults are reported. Victims advocates recommending changing the process. Ommitt good morning, ladies and gentlemen. This is the military personnel subcommittee. Im the chair