Summer of (the FTC’s) Discontent
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Privacy, Technology and Perspective
Summer of (the FTC’s) Discontent: This week, let’s look at what’s going on with the Federal Trade Commission (FTC).
Suit by the U.S. Chamber of Commerce. On July 14, 2022, the U.S. Chamber of Commerce filed a lawsuit against the FTC in United States District Court for the District of Columbia, challenging the FTC’s denial of Freedom of Information Act (FOIA) requests, which the Chamber characterizes as "essential for understanding the commission’s operations.” A link to the Chamber’s announcement about the lawsuit follows:
https://www.chamberlitigation.com/cases/chamber-commerce-v-federal-trade-commission
The Chamber’s complaint can be reviewed by clicking the following (unwieldy) link:
In short, the Chamber is seeking information about the FTC practice of counting so-called “zombie” votes from former commissioners, communications with the European Commission regarding certain mergers, and the employment records of Chair Lina Khan while she worked as a "legal fellow" for former Commissioner Rohit Chopra.
Why so litigious? In its complaint, the Chamber generally laments that it is “deeply concerned about the direction the Commission had steered itself under new leadership.” Specifically, the Chamber complains:
There is very little structural check on the Commission. The Commission is not directly accountable to the people, and the Commissioners do not stand for re-election. And recently, the Commission has taken the extraordinary position that it is insulated from almost all judicial scrutiny and that the only recourse for regulated entities is the highly deferential appeal.
We perceive the Chamber’s challenge as partisan-driven at a time when the courts (or at least the Supreme Court) seem more disposed to re-examine the so-called administrative state. Certainly, we agree with the Chamber that transparency is important for any government agency, but the Complaint seems to focus less on transparency under FOIA and more on expressing grievances.
Meanwhile, internally at the FTC... Every year, the Partnership for Public Service has Boston Consulting Group conduct employee-morale surveys of U.S. Government agencies (large, midsize, and small) and rank them among “Best Places to Work.” Like all such “rankings and ratings” you should take them with a large grain of salt, but they can be useful in showing significant trends over time, or dramatic changes that come up suddenly.
The 2021 report was published recently. The FTC’s overall “Engagement and Satisfaction” score of 64.9 – down from 89.1 the year before – places it 22d out of 25 midsize federal agencies. The largest dissatisfactions seem to be with pay and senior leadership.
You can read the FTC page of the report by clicking here:
https://bestplacestowork.org/rankings/detail/?c=FT00
Why it Matters: The FTC is the U.S. Government’s principal agency for consumer protection and fair competition. Its mandate is among the broadest, most varied, and most important of any federal agency, reaching from antitrust analysis to the Do Not Call List; from false advertising to what makes silver “sterling;” from franchise disclosures to the difference between used and secondhand wristwatches, all through policy and rulemaking, education, and enforcement.
There is virtually no aspect of your life which the FTC does not affect.
And it is supposed to do this with a staff of only about 1,100 people, and a budget of only about $351 million.
Why so Grumpy? No agency has ever said to the Office of Management and Budget, “No thanks, we’re good, we’ve got all we need.” Now, however, the FTC’s thin budget is looking unusually paltry. Besides everything else, the FTC is also the main enforcement authority for most of the nation’s privacy laws, and is the focus of attention for analyzing and then carrying out whatever will come in the next generation of privacy laws. It is hiring technologists and many related skills, but the challenge is huge.
Pay scales are a serious issue, because government service lags so far behind Big [Tech, Law, or Almost Anything Else] in what it can hire and retain. A GS-15 pay range (for Ph.D. level or similar expertise, or management of a 40-person section) runs between about $113-147,000. And it is true that senior FTC leadership has been challenged recently, as it has brought considerable renown and exciting ideas to the agency but little experience in agency management. Work-from-home confusion seems not to have helped, either, to say nothing of the prospects for agency regulation generally in an age when the Supreme Court seems so ideologically opposed to it.
We think, however, that the most significant reason for their discontent may be that many of the FTC’s professionals are idealists at heart. That’s a good thing (to say the least!), especially in an agency whose mission is to protect us all. But often it’s the idealists – the people who see what should be, how things could be better, how people should behave – who get the most frustrated by being ground down, fighting an endless struggle against overwhelming numbers of people and dollars, and seeing the reality fall so constantly short of what they know it should be.
We suspect that that’s part of it – a lot more of it anyway than shows up in the rankings and ratings and surveys, with its accompanying gossip and speculation of targets, explanations, and scapegoats. The private sector may be better than many agencies of the USG at restoring and preserving its talent, or at least rotating them to avoid burnout.
We believe the U.S. Government should do better by its people. By supporting them, it strengthens its institutions, which is so important, especially at a time in today’s world when they are under attack.
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Hosch & Morris, PLLC is a boutique law firm dedicated to data privacy and protection, cybersecurity, the Internet and technology. Open the Future℠.