FEDERAL TRADE COMMISSION FUNDING FOR A PRIVACY BUREAU AND RELATED EXPENSES. In addition to amounts otherwise available, there is appropriated for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $500,000,000, to remain available until September 30, 2029, to the Federal Trade Commission to create and operate a bureau, including by hiring and retaining technologists, user experience designers, and other experts as the Commission considers appropriate, to accomplish its work related to unfair or deceptive acts or practices relating to privacy, data security, identity theft, data abuses, and related matters.

With all of the talk about trillions here and billions there for infrastructure, $500 million might sound like chump change. But to put it in perspective, the FTC’s current annual budget is about $350 million – covering all of its programs, including its entire antitrust mission and the many components of consumer protection, of which privacy is just one. Further, the FTC currently employs just 61 people to staff its privacy mission, at a cost of about $13 million – less than 1/38^th of the proposed new $500 million budget (or about 1/5 on an annual basis, when the amount is spread over its eight-year duration). Indeed, when one of us called for the creation of a new FTC privacy bureau last March, it seemed inconceivable that such a bureau could launch with a half-billion-dollar wind at its sails.

With $500 million, the FTC could employ hundreds of additional staff – including lawyers, investigators, technologists, and other experts – to oversee U.S. privacy. It could bring (and litigate) “big cases” (and smaller ones too), study key industries, conduct consumer surveys, provide more personalized assistance to U.S. consumers, and provide greater leadership and guidance (through public events and user-friendly publications) here and abroad. (And yes, the FTC could also launch rulemakings to expand existing rules, or to launch new ones under its inherent Magnuson-Moss rulemaking authority.) For those who have been calling for a brand new U.S. privacy agency, this new, well-funded privacy bureau could go a long way to satisfying their goals.

Of course, what this legislation would not do is strengthen the FTC’s legal authority by (among other things) enacting a comprehensive federal privacy law, giving the FTC full jurisdiction over common carriers and nonprofits, and authorizing monetary remedies for privacy violations. For years, the FTC and others have argued that these types of legal reforms are necessary to ensure that the agency can be fully effective in protecting consumers’ privacy.

Nevertheless, if the legislation passes, businesses should expect more oversight in the form of investigations, litigation, warning letters, studies, surveys, and rulemakings. Indeed, the FTC has already highlighted some of these goals and aspirations in early October, which we discussed in an October 3 blogpost on the topic. With $500 million, the FTC’s “wish list” list would grow exponentially longer and could include, for example, enforcement “sweeps” to examine companies’ privacy practices, even in the absence of any suspicion of wrongdoing. We are following this issue closely and will post additional details as they unfold.

Wu’s history as a law professor and advocate may offer some clues about how he will approach his duties. He rose to prominence as an advocate of “net neutrality,” a phrase he coined in 2002. In general, his scholarship focuses on telecommunications, technology, and competition.

After the 2020 presidential election, Wu and several former federal antitrust officials authored a Washington Center for Equitable Growth (WCEG) report entitled “Restoring Competition in the United States: A Vision for Antitrust Enforcement for the Next Administration and Congress.” The report that concludes the “U.S. economy is plagued by a problem of excessive market power” and “antitrust enforcement has failed to prevent this problem.” Among the report’s recommendations is a suggestion to create a White House Office of Competition Policy within the NEC, to bring a “‘whole government’ approach to competition policy.”

Although the White House has not created such an office, Wu’s title and administrative home in the NEC closely track WCEG’s advice. In the view of Wu and his co-authors, the White House should “pressure agencies to open up closed markets while discouraging agencies from entrenching the industries that they regulate.” Agencies that the WCEG report lists as possessing competition-related rulemaking authority range from the FDA to the Federal Housing Finance Agency.

Wu’s record and the current political environment, however, suggest that the internet and communications industries are likely to be a core part of his focus. The Department of Justice, FTC, and FCC will be central to any ramp-up in competition regulation or enforcement in this arena. These agencies have over time played complementary, but sometimes competing, roles in internet and communications issues, particularly in large communications and media mergers. With the shifting jurisdictional classification of broadband internet services at the FCC, moreover, the dividing line between FCC and FTC jurisdiction over various players in the market has been unclear. Both the FCC and FTC, for example, jointly took an aggressive stance against VoIP gateways through which unlawful robocalls were being transmitted.

These agencies present challenges to an assertive White House coordinating role. The FCC and FTC are independent; the selection of agency chairs and nominations to fill vacancies could indicate how willing the agencies will be to coordinate with the White House. At the same time, the Justice Department’s independence was a prominent issue in Merrick Garland’s confirmation hearings and could affect how the White House attempts to shape the Department’s competition policy agenda.

Wu will also have competition of his own within the White House. For instance, OMB’s Office of Information and Regulatory Affairs has a direct role in reviewing proposed federal regulations and may be more reluctant to issue aggressive regulations. Other White House components, from the Office of Science and Technology Policy to the Domestic Policy Council, are likely to make their voices heard, too.

We will closely monitor developments as Wu’s role and the leadership picture in key agencies become clearer.