FTC might take into account rule curbing algorithmic discrimination and ‘industrial surveillance’

The Federal Trade Commission appears to be considering regulation targeting digital platforms that either invasively track their users or allow others to do so. The “Trade Regulation Rule on Commercial Surveillance” is still at a very early stage, but could be the first major anti-big-tech campaign by the new FTC chairman Lina Khan.

It is currently only described in this Office of Management and Budget summary after the FTC has provided this agency with information about potential upcoming regulatory actions. According to the listing, the rule would “curb lax security practices, limit abuse of privacy and ensure that algorithmic decision-making does not lead to unlawful discrimination”. There is no public draft of the rule and no indication of whether the rule-making at this point is more than fictional.

An FTC spokesman made the following statement but declined to comment: “The FTC stands ready to use all of our tools to combat harmful commercial surveillance practices and protect American privacy.”

Senator Brian Schatz drew attention to the filing and praised the agency (perhaps a little prematurely) for adopting this: “I am delighted that Chairman Khan and the agency are taking this step to combat companies with discriminatory algorithms. It it is crucial that We address this, “he said in a statement.

The rulemaking would use the FTC’s powers under Section 18 to regulate “unfair or fraudulent acts or practices,” which is an established source of authority for setting a wide variety of requirements and prohibitions.

This rule could potentially be in line with the proposed (and abandoned) Broadband Data Protection Act, along with other attempts to protect consumers from the hidden looting of everything from social media companies to internet service providers.

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Of course, the FTC can’t just invent rules – it makes rules, but often when a new or changing industry has managed to bypass pre-existing rules for good reason.

The story goes on

For example, if a yogurt label says it is fat-free and tests show it contains fat, then that is obviously bogus advertising. But if a social media company says (as they often do) that you “own your data” or something like that but you can’t download it, prevent it from selling, or delete it entirely from their platform, is that false advertising? It may not be long before the FTC updates its rules and guidelines to include the practice.

“Illegal discrimination” can also occur when an algorithm fed with poorly configured data favors or disadvantages a group of people based on a protected status such as religion, race, or medical status. There are currently few formal requirements for verification algorithms as they and their sources are often trade secrets or otherwise protected from public view and investigation. An FTC rule could help make this a requirement rather than a voluntary action.

Sometimes these efforts are backed by law or executive action, and Khan certainly has a mandate from the White House to contain big tech (her rapid rise from legal adviser to front runner is a strong advocate for action like this potential). Rule).

To be clear, at this point this is more or less a wink in the eyes of the FTC, but filing with the OMB sets it as a likely priority in 2022 – an election year that the current administration wants to appear effectively. The Big Tech acquisition is one of the few existing bipartisan efforts, so working on these lines could be a blueprint for some political platforms.

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