The FTC’s Lina Khan And Noah Phillips Discuss The Data Privacy Stalemate, Including The ‘Surveillance Advertising’ Debate

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As the FTC is deadlocked awaiting its tiebreaker appointee, both Democrat-appointed FTC commissioner Lina Khan and Republican FTC Commissioner Noah Phillips spoke at the International Association of Privacy Professionals’ (IAPP) Global Privacy Summit.

With two Republicans and two Democrats, many issues face a 2-2 stalemate – particularly when it comes to data privacy and what some, including FTC Commissioner Lina Khan, refer to as “surveillance advertising.”

Last month, the Senate advanced the nomination of Democrat Alvaro Bedoya, a Georgetown privacy attorney and consumer privacy advocate. Commissioner Noah Phillips, a Republican, claims to welcome the nomination, hoping to bring an end to the checkmate that’s slowed the agency down and lowered its enforcement rate.

“Historically, the dynamic at the FTC has not always been [one of] consensus,” Phillips said. The idea is to get things done, even if it must be done grudgingly. A common accord on consumer protection is ideal, but “there may be policy changes we can only [pass] with a 3-2,” he said, “but how many and how often, we don’t know.”

“I hope the new majority doesn’t behave like the old majority did,” Phillips added, referring to previous Democratic Commissioner Rohit Chopra, who left the agency in October. A recent opinion piece Phillips wrote with fellow Republican Commissioner Christine Wilson paints a picture of dead-end resentment, not bipartisan cooperation.

Even so, new leadership won’t solve old problems. The current commissioners are still very much at a stalemate when it comes to “surveillance advertising,” including what the FTC should or shouldn’t do about online privacy.

Two views on surveillance advertising

FTC Commissioner and Chair Lina Khan warned about the dangers of “commercial surveillance” during her keynote speech on Monday.

“Digital technology allows [for] data collection on a hyper-granular level,” she said. “And the more we rely on digital tools to carry out [daily] tasks, the [more] vast the scope of data collection, [from] keystroke use and browser history to location and health records.”

In addition to sounding an alarm about online data collection, Khan also called out dishonest business practices pertaining to social media and targeted advertising.

“Across domains, companies can analyze stunningly detailed user profiles to target [ads] with striking precision,” she said. “The general lack of legal limits has yielded a booming economy of the buying and selling of data – it’s led firms to create elaborate tools to surveil users across devices.”

She countered the common argument that digital tech provides free services in exchange for data: “Firms could provide services for free, but they [choose to] make money by vacuuming up data.”

A business running for free is certainly an oxymoron – Facebook and TikTok didn’t build out international social platforms for users out of the pure goodness of their hearts – but there is a limit to appropriate data collection. It’s a matter of where to draw the line.

Khan makes a compelling case. But Commissioner Noah Phillips sharply disagrees with the “narrative” of surveillance advertising, which he says Commissioners Khan and Rebecca Slaughter have been “pushing for years.”

The term “surveillance advertising” is a blanket term referring to companies’ use of personal data to target ads to individuals. But Phillips also stressed that market power doesn’t determine a company’s potential for deceptive or unfair practices.

“Bad actors aren’t just big guys – they can be little guys, too,” Phillips said. “We do [work with] some cases involving big companies that have a monopoly power … but many cases involve smaller companies, and some of the harms they cause are the worst,” he said, citing spyware, ransomware and stalking apps.

Using the pejorative term “surveillance” pares back the objectivity of the problem of data use and abuse by instilling fear of practices that aren’t harmful, he argues.

“It sounds like J. Edgar Hoover and COINTELPRO,” he said, referring to the 1950s FBI stint in which Hoover ordered agents to spy on, expose and discredit the Black Panthers.

Next steps

While the FTC has historically operated under the 1975 Magnuson-Moss Warranty Act that protects consumers from “unfair and deceptive” practices, the digital world plays by different – and much more complex – rules.

Commissioner Khan thinks the FTC can and should do more.

“The FTC is charged with ensuring our legal tools and approach keeps pace with business practices,” Khan said.

It makes sense, but Commissioner Phillips cautions patience.

“There’s a widespread attitude that the more rules we make, the better society will be,” he said, “and I don’t think that’s right.”

Specifically, Phillips worries the FTC is wading into the legislature’s territory.

The bottom line is, when it comes to hitting the gavel on rulemaking, “Congress ought to do [that], not us,” Phillips said.