The Federal Trade Commission is planning to launch a wide-ranging study of tech companies’ data practices, in the latest sign of the increased scrutiny that Silicon Valley giants such as Facebook are facing in Washington.
FTC Chairman Joe Simons disclosed the agency’s plans to senators in a series of written responses that POLITICO obtained Wednesday.
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The news came a year after the agency began a still-unfinished investigation of Facebook’s data practices, following revelations that information on up to 87 million users wound up in the hands of a consulting firm linked to President Donald Trump’s 2016 campaign.
Simons wrote that the FTC is planning to conduct a so-called 6(b) study, which the agency has previously applied to data brokers and businesses accused of abusing the federal patent system. He suggested the study would target large tech firms but didn’t specifically name companies like Google, Facebook or Amazon.
In such a study, the agency can order companies to turn over detailed information about their business practices. That could force tech companies to share closely held corporate secrets about their inner workings that they’ve long resisted disclosing.
Simons, a Trump nominee, is under intense pressure from both sides of Capitol Hill to more aggressively regulate the powerful tech industry. Key lawmakers have previously raised the idea of a 6(b) study with Simons.
In November, then-Senate Commerce Chairman John Thune (R-S.D.) asked Simons if the commission would consider ordering such a study on Google, Facebook and Amazon “to learn what information they collect from consumers and how that information is used, shared, and sold.”
Simons at the time called that option a “powerful tool” that “very well might make sense” but did not reveal any specific plans.
In his follow-up responses to the Senate after the hearing, Simons went further, telling Thune, “I agree with you that the FTC’s section 6(b) authority could be used to provide some much-needed transparency to consumers about the data practices of large technology companies.” He added, “We are developing plans to issue 6(b) orders in the technology area.”
A Commerce Committee spokesperson confirmed the written exchange, which has not yet been posted online. Simons’ office did not respond to a request for more information on the particulars of the study in the works.
Silicon Valley has received an increasing volley of criticism from both Democrats and Republicans in Washington. Many Democrats argue the industry’s approach to competition should make it a target of antitrust enforcement. Republicans, including Trump, accuse the industry of bias in the way it manages content. Lawmakers of both parties, meanwhile, have heavily criticized the industry’s handling of user data.
Tech critics have long called on the FTC to exercise its 6(b) authority when it comes to Silicon Valley’s privacy and competition practices.
Asked for comment on the plans for a 6(b) study, Democratic FTC Commissioner Rohit Chopra told POLITICO he’s “worried that the public and law enforcement know far too little about dominant tech companies.”
“There is growing support for a comprehensive inquiry into their business practices,” he added. “This work is long overdue and should be the agency’s top tech priority.”
Thune told POLITICO on Wednesday that he welcomed the FTC’s move.
Companies targeted by a 6(b) order can, according to the FTC, petition to “limit or quash” the agency’s demand for information. The FTC can then opt to seek a court order compelling compliance.
Simons, speaking at an advertising industry conference in Washington on Wednesday, said American consumers may not fully appreciate how data collected on them is being used by ad-driven tech companies.
“Many of the companies at the heart of this ecosystem operate behind the scenes and without much consumer awareness,” he said.
Margaret Harding McGill contributed to this report.