WASHINGTON. The Federal Trade Commission will begin writing federal rules to expand online privacy protections as early as Thursday, according to sources familiar with the matter.
If adopted, the rule could impose significant new obligations on companies that process consumer data, including the possibility of banning certain types of data collection practices, the people said.
The move is the latest sign of a more aggressive stance by the five-member commission under Chairwoman Lina Hahn, a Democrat who has been a vocal critic of big business, especially big tech companies.
The FTC declined to comment.
Congress is also considering legislation to introduce new rules that would give Americans more control over their personal data, but it’s unclear whether there will be enough votes to ensure passage this session. A group of state attorneys general expressed concern that the bill could preempt stricter privacy standards passed at the state level.
New FTC rules could take years to pass, and the commission could go down several different paths, the people said. One option would be to declare certain data collection practices unfair or deceptive, using its powers to control such behavior.
The agency can also use a less-used statutory authority that authorizes it to use what it considers unfair competition practices, perhaps by treating the data collection practices of certain companies as exceptional.
A third option could focus on protecting children’s privacy, with the FTC updating its rules under the Children’s Online Privacy Protection Act of 1998. And it could use its powers to target individual companies, as some privacy advocates have urged.
Ms. Hahn has taken a number of steps to lay the groundwork for the potential rulemaking, including by voting with two other FTC Democrats to change internal procedures to expand her control over the rulemaking process.
Early in his term, President Biden ordered the Federal Trade Commission to consider writing competition rules in a number of areas, including “unfair data collection and surveillance practices that could harm competition, consumer autonomy, and consumer privacy.”
Some privacy advocates called on the agency to ban “surveillance advertising” as an unfair method of competition, citing a Wall Street Journal article about the influence of Instagram, owned by Meta Platforms. Inc.
about the mental health of teenagers.
Meta said it faces stiff competition and that the magazine mischaracterized an internal study of Instagram’s influence.
The lack of a broad federal law protecting consumer privacy has become an even bigger problem for advocates as online platforms and others have amassed troves of consumer search data and other information. Many privacy advocates are particularly concerned about children, who may be more vulnerable to targeted online advertising and attention-grabbing algorithms.
Ms Khan and other Democratic commissioners have previously said the agency would pay more attention to how platforms can abuse children’s privacy because many children have spent more time online during the Covid-19 pandemic.
Republican Commissioner Christine Wilson has also become a proponent of federal privacy legislation, saying consumers don’t understand how their data is being collected and monetized, creating what she calls a “market failure.”
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