FTC efforts to regulate big tech are working – efforts to prevent AI consolidation don’t require congress

In related news, the U.S. Federal Trade Commission (FTC) aims to publish rules relating to "commercial surveillance" in the next couple of months, according to The Record. The FTC defines commercial surveillance as the "business of collecting, analyzing, and profiting from information about people." The FTC recently published a speech from Samuel Levine, the director of its Bureau of Consumer Protection, that lays out the thinking behind the commission's approach. Perhaps most significantly, Levine says "there is momentum across government—state and federal, Republicans and Democrats—to push back against unchecked surveillance." In other words, it's not a coincidence that technology regulation is increasing. In his speech, Levine talks of "unchecked surveillance" and, in our view, conflates the entire digital economy with commercial surveillance. There are companies that track people directly for profit, but that is not what most of the digital economy is about. Despite this caveat, much of what Levine says makes sense and signals the direction for broader government action. Levine takes aim at what he calls the "notice and choice" regime, whereby consumers theoretically provide informed consent after reading terms and conditions or privacy policy documents. He calls the choice regime "a fantasy world, divorced from the reality of how people live or how firms operate." Instead of protecting privacy, it has become "a way for companies to give invasive data practices a thin veneer of legitimacy." This regime is broken, he says, because people don't have the time or expertise to read and understand the documents, and, even if they could, they couldn’t exercise choice because digital services are indispensable and there isn't much competition. The solution here, Levine says, is that "firms need to collect and retain less data about us, and secure it better." The FTC has already secured a number of prohibitions against firms selling sensitive location information and sharing sensitive health data for advertising purposes. In addition to improving consumer privacy, another goal for the FTC is to crack down on "dark patterns" or manipulative user interfaces that trick users into making decisions they would not otherwise have made. One example here is interfaces that make it difficult to cancel ongoing subscriptions, and last year the FTC acted against Amazon for allegedly tricking users into subscribing to Amazon Prime and making the cancellation process deliberately difficult to navigate. The FTC's complaint in that case says: [T]he primary purpose of the Prime cancellation process was not to enable subscribers to cancel, but rather to thwart them. Fittingly, Amazon named that process "Iliad," which refers to Homer's epic about the long, arduous Trojan War. Levine says another FTC goal is to ensure that artificial intelligence (AI) technologies "work for people, and not the other way around." Although AI is still in its infancy, the intent here is to avoid leaving a regulatory vacuum as occurred during the 2000s, when internet companies were left to regulate themselves. These aren't rogue FTC actions but, rather, represent what Levine calls "the tip of the spear in a broader rethinking of the government’s role in making markets work better." There are two possible futures here. In one, Congress passes comprehensive federal privacy legislation such as the recently proposed American Privacy Rights Act (APRA). Compared to other recent proposals, experts think this act has the best chance of making it into law. The APRA, however, hits the same notes that the FTC's Levine does, including data minimization and a prohibition on the use of dark patterns. In this future, the FTC is enforcing legislation. In the second future, comprehensive privacy legislation does not pass Congress and instead the FTC tries to change business practices using regulation and enforcement actions. It's a more difficult road for the FTC, but the destination is much the same.