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Sen. Cruz: ‘The FTC Has a Great Deal of Authority to Address Deception and to Help Provide Transparency’

Questions Federal Trade Commission Chairman and Commissioners on their priorities to protect consumer privacy, to promote competition, and to prevent biased censorship

November 27, 2018

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202-228-7561

WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas) member of the U.S. Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security participated in a hearing focused on examining the Federal Trade Commission’s (FTC) priorities in protecting consumers from privacy violations and to prevent the growing influence large global tech companies are having on competition within the U.S. economy. Sen. Cruz also raised Texas constituents’ concerns to FTC Chairman and Commissioners on global tech companies’ biased censorship and how the course of action the FTC planned to take to combat such censorship as provided through their authority to protect the privacy and security of consumer data and to use federal antitrust law to protect against discriminatory conduct by internet service providers.

“One of the frustrating things from the perspective of this committee is there is virtually no transparency. There are no objective data. Twitter, Facebook, Google, they don’t answer any questions. They don’t answer the extent to which they are silencing people. The extent to which political bias is affecting those decisions. How can and should the FTC address that concern that is being raised? And it is a concern of millions across the country. […] I would also encourage the Commission when you say that you don’t think you have the authority to address these issues, you do have extensive consumer protection authority and when tech companies are holding themselves out to the public and customers as neutral public forums, and are actively engaged in hidden censorship, that is actively deceptive. And the FTC has a great deal of authority to address deception and to help provide transparency. And right now, big tech has been very comfortable refusing to answer these questions. The FTC, I think, has ample authority to help provide that transparency which is, I think, something both the public and Congress would be very interested in knowing the answers to.”

Watch Sen. Cruz’s full line of questioning here. A full transcript is below.

Sen. Cruz: Thank you Mr. Chairman. Welcome everyone. And I would ask you to convey my well wishes to all the wonderful people that work at the FTC. 

Chairman Joseph J. Simons: I’d be happy to do that. 

Sen. Cruz: It’s good to see you. I want to talk - I want to raise a topic that we’ve discussed at some length in the past which is big tech. And there are many issues about big tech that intersect with the FTC’s mission and mandate. So, I want to start with this past spring the Commission received several requests to investigate Google’s alleged violations of privacy. One request from Senators Blumenthal and Markey detailed what they described as Google’s deceptive and intrusive collection of location information on Android smartphones. Another request came from the Electronic Privacy Information Center, raising concerns about Google’s tracking of in-store purchases. Yet another was filed by seven consumer groups about Google’s “deceptive by design” user privacy settings. And the list goes on. And I wanted to ask Chairman Simons, has the Commission investigated the claims in those letters? And what have y’all found?

Chairman Simons: So, I can’t talk about any specific non-public investigation as you know. But one thing I will say is that if you read about it in the press, if there’s a congressional letter that points out a potential problem, we’re on it.

Sen. Cruz: Good. 

Chairman Simons: We look at those things very carefully. 

Sen. Cruz: I am glad to hear that. Let me ask a broader question to each of the commissioners. During the February nomination hearing, which most of y’all participated in, I highlighted concerns that was raised in an article published in Esquire that detailed how “Facebook and Google are together worth $1.3 trillion.” Which to put that in perspective, “You could merge the world’s top five advertising agencies, with five major media companies, and still need to add five major communications companies,” and by the way that would be WPP, Omnicom, Publicis, IPG, Dentsu, Disney, Time Warner, 21st Century Fox, CBS, Viacom, AT&T, Verizon, Comcast,  Charter, and Dish all merged into one giant company, and that would still only total 90 percent of what Google and Facebook are together worth. Does the Commission have concerns about that massive accumulation of power that big tech has? And in particular, how should antitrust law approach that massive concentration of power?

Chairman Simons: Thank you Senator. So, in the antitrust context, we’re worried about exercise of market power, right? And so that’s where you want to look for the anticompetitive conduct. That’s where you want look for your case generation and for your investigations. And so of course when you’ve got a situation - but let me say this also, which is that the fact that they’re big doesn’t mean it’s a problem under the antitrust laws. Big is not necessarily bad. But if you got big by being bad, if you got big through anticompetitive conduct or you’re staying big because of anticompetitive conduct that’s something that we need to prohibit and we need to stop.

Sen. Cruz: Any other commissioners have thoughts on that?

Commissioner Rohit Chopra: Senator I’ll just add that if you talk to investors many of them will tell you that they’re not going to fund a new start up unless they can figure out how to sell that company to an existing large incumbent like Google and Facebook. And that makes me question do we have a really competitive, innovative economy where investors are putting money only into ideas that they can sell to an existing incumbent. We should want to live in an economy where people are investing to create new ideas that challenge and that create real rivalry. And I worry about writ large when companies are trying to get going, but a larger incumbent can seal their fate by cutting them off. So, you know we take these issues seriously on the privacy side, on the antitrust side, but it is clear that we have to think about this hard, and so do you.

Sen. Cruz: I think you raised good and important concerns there. Let me shift the discussion slightly to a different aspect of big tech’s power. Which is, as I am home in Texas and listening to Texans a concern that I hear on virtually a daily basis is that the major technology companies are far too willing to engage in censorship. That are using their market power to silence voices in the political marketspace, in the public discourse with which they disagree. In recent weeks, media outlets have reported that Facebook fired a senior executive because of his political views. [That it] We’ve also seen Twitter recently getting bolder and bolder blocking conservatives altogether from speaking, and just banning them from the platform because what they were saying was inconsistent with Twitter’s political views.

And, one of the frustrating things from the perspective of this committee is there is virtually no transparency. There are no objective data. Twitter, Facebook, Google, they don’t answer any questions. They don’t answer the extent to which they are silencing people. The extent to which political bias is affecting those decisions. How can and should the FTC address that concern that is being raised? And it is a concern of millions across the country.

Chairman Simons: It’s not clear to me that the FTC should be addressing that at all. This is -- what you’re describing is something similar to what the FCC used to do with the Fairness Act. And so, maybe there is an FCC angle there that is appropriate for either the Congress to pursue or maybe the FCC to pursue. But, unless it’s something that relates to a competition issue or it’s unfair or deceptive then I don’t think we have a role.

Commissioner Chopra: I’ll just add here that - I think the public, you’re right, knows very little about how some of these companies make decisions. And there are free speech issues which may not be in our authority. But certainly, and as you know, Senator Cruz, the FTC has its authority where we can compel certain information about business practices and based on a vote of the Commission make some of that information public. I think the FTC is well situated to do quite a bit of study and reveal some of those findings about how some of these companies operate. But I will think hard about what you’re mentioning about speech as well.

Sen. Cruz: And I would very much encourage you to do so. And I would also encourage the Commission when you say that you don’t think you have the authority to address these issues, you do have extensive consumer protection authority and when tech companies are holding themselves out to the public and customers as neutral public forums, and are actively engaged in hidden censorship, that is actively deceptive. And the FTC has a great deal of authority to address deception and to help provide transparency. And right now, big tech has been very comfortable refusing to answer these questions. The FTC, I think, has ample authority to help provide that transparency which is, I think, something both the public and Congress would be very interested in knowing the answers to.

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