i3 - March/April 2018 - 35


Maureen Ohlhausen,
acting chairman of
the Federal Trade
Commission (FTC), left,
speaks with CTA President
and CEO Gary Shapiro
during the policy program
at CES 2018.

appropriately? Have you run the right tests?
Are you patching it appropriately? We have
brought cases against companies who have
neglected to patch obvious flaws once they
became aware of them. Are you doing
updates? Are you informing consumers in
a way they know how to take steps to protect
problems with products they have already
purchased? Do consumers understand, going
forward about how long a certain product is
going to be supported with these kind
of patches and updates?

Q There's been a lot of discussion,

especially in Europe, about how big American platforms are terrible and should pay
billions of dollars. I know that's an argument
of antitrust. Is big bad?

A Antitrust is a very fact-specific inquiry, and
and a settlement we reached with VTech,
a connected toy company, where we alleged
they hadn't provided the protections to the
data that they said would be provided and
they also didn't comply with the Children's
Online Privacy Protection Act. So we brought
in an enforcement action - we have a robust
settlement with them, the steps they are
going to have to take, and we also got a civil
penalty of $650,000 that will be paid to the
U.S. Treasury. So that is the kind of case the
FTC is very good at investigating and bringing
those kind of enforcement actions.

Q What about the Internet of Things secu-

rity? How do you work with other agencies
and focus on privacy in that context?
A Obviously, some of these connected toys
are part of that - everything is getting an
internet connection these days, but it is much
broader than play things or even consumer
level things that you may have in your home.
I mentioned the connected cars workshop
that we did with NHTSA. We also did some
stuff with the Food and Drug Administration
about health apps and allowing apps to be
used but also clarifying what kind of privacy
and security obligations they have. We also
work with the FDA with hearing aids. That was
a wonderful development for people who
have those kind of needs. We did a workshop
in 2017 called "Now Hear This" and we had
the FDA and CDC and other parts of the
government who work on health issues to get
the consumer issues, the privacy issues and
the availability issues addressed. Because
there are a lot of consumer needs out there
that technology can help meet.
C TA . t e c h / i 3

Q Can you talk about botnets and how

you balance the benefits of connectivity
against the challenges of cyber criminals?
A We are aware of the Moray DDoS attack
and the vulnerabilities we see taking
place. It is a shared obligation of industry,
law enforcement and government, to
take the right steps and put the right
frameworks in place to help stop these
problems. The FTC doesn't have criminal
enforcement authority, so if there's a criminal
use we're not going to bring in criminal
enforcement action. But we do try to help
industry make sure they are taking the
proper precautions so that their technology
and their products are not misused by
criminals trying to do these kind of activities.
Our cases often look at, are there obvious
vulnerabilities that the entities should have
taken into account? Also enforcement is
a big obligation but it is not the only way we
address consumer issues. We do a lot of
education of business and consumers, and
we also do workshops and work with other
parts of the government. The botnet issue is
going to require efforts from all stakeholders
to make progress.

Q What should industry be doing and

what should consumers be looking for?

A There are several things the industry

should be doing including educating
themselves about these vulnerabilities and
taking the appropriate steps. If you look at
some of the enforcement actions the FTC
has brought, we look at different steps in the
development and the lifecycle of a product.
If you have a product, have you developed it

you can't say 'big is bad, and small is good'
across the board. You have to look at why
a company is big. Because it's innovating?
Because it's providing products that consumers
want at a good price point? Is it because
it's thinking way down the road and getting new
products to market that consumers want to
use? That's wonderful, that's good for consumers. We want that kind of dynamism and innovation. Sometimes companies are big because
there are big economies of scale and scope.
There's a lot of efficiencies in big companies.
But, is a company getting big merely because
it's buying up its competitors, and it's not really
competing on its merits? Certainly antitrust
has an important role to play in reviewing
transactions and mergers, and that's a lot of
my work at the FTC is looking at these kind
of mergers. I've had an active enforcement
agenda - we've challenged a number of
mergers, some in the technology space.
The other thing is, once a company has
gotten market power, we may look at whether
it's using distribution chain or vertical
restraints in a way that is fencing out competitors, that is not competition on its merits.
We have brought enforcement actions in that
area as well. We're always looking for whether
companies are colluding with even small
competitors. If they're getting together and
saying 'We're not going to compete on
these terms' or 'We're going to fix prices' or
'I take this area, and you get that area' -
that's a very traditional area of antitrust.

GO ONLINE: This interview was edited for
length and clarity. The full interview can be
found here: CES.tech/ftcinsights


http://www.CTA.tech/ftcinsights http://www.CTA.tech

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