FTC Veteran Returns to Lead Consumer Privacy, Security

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By Jimmy H. Koo and Daniel R. Stoller

Washington lawyer and Federal Trade Commission veteran Thomas B. Pahl will serve as acting director of the FTC office that handles privacy and data security oversight and enforcement, Republican FTC Acting Chairman Maureen K. Ohlhausen announced Feb. 8.

Pahl will take over as the Bureau of Consumer Protection’s acting head from Jessica Rich, who spearheaded consumer privacy and data security initiatives and raised the profile of emerging tech issues at the agency. Rich is scheduled to leave the post Feb. 17.

Pahl told Bloomberg BNA Feb. 8 that the bureau will adopt President Donald Trump’s mandate of less regulation and more free-market reliance. He said he would try to balance being a “good steward of consumer protection” with regulatory costs to business.

It’s unclear how long Pahl will serve as acting director. Whether he stays on beyond that appointment may come down to how Trump and Ohlhausen want to shape the FTC going forward. When asked about the possibility of becoming the bureau’s permanent director, Pahl said he’s “committed to the FTC and its people and would be thrilled to continue in that position.”

Pahl previously served in the bureau’s Division of Advertising Practices and the Division of Financial Practices. He was an adviser to Republican FTC Commissioner Mary Azcuenaga and an attorney adviser to Republican FTC Commissioner Orson Swindle. Pahl is a partner and a member of Arnall Golden Gregory LLP’s privacy and consumer regulatory practice, with a focus on financial privacy matters.

Privacy and data security issues are at the forefront of the FTC’s consumer protection concerns, and Pahl has the expertise to help the commissioners set approaches to data security enforcement, former FTC Chairman Jon Leibowitz, a Democrat and partner at Davis Polk & Wardwell LLP in Washington and New York, told Bloomberg BNA Feb. 8.

Pahl is a “very skilled consumer protection lawyer,” Leibowitz said. The FTC’s data security enforcement authority has come under scrutiny and been the subject of legal challenges.

Julie Brill, a former Democratic FTC commissioner, told Bloomberg BNA Feb. 8 that Pahl “knows the FTC inside and out” and will help Ohlhausen “promote the parts of the bureau that function well, and transform the parts of the bureau that are in need of improvement.” Brill is a partner and co-director of the global privacy and cybersecurity practice at Hogan Lovells LLP in Washington.

The FTC didn’t immediately respond to Bloomberg BNA’s e-mail and phone call requests for comment.

Consumer Privacy Background

Pahl returns to the FTC as it navigates challenges to its data security enforcement authority. It’s gotten pushback from consumer privacy groups and regulatory watchdogs who think it has overstepped its authority.

For example, the now-defunct medical testing laboratory LabMD Inc. is challenging the FTC’s ability bring data security cases under the unfairness prong of Section 5. The case is pending before the U.S. Court of Appeals for the Eleventh Circuit. In 2015, the Third Circuit held that the FTC was authorized to bring such an action against hotelier Wyndham Worldwide Corp. That case was later settled.

Prior to joining Arnall Golden, Pahl served as managing counsel at the Consumer Financial Protection Bureau, which has raised cybersecurity concerns over financial institutions who may be putting consumer privacy and security at risk. Pahl was responsible for policy implementation, rulemaking, best practices and other guidance related to consumer financial privacy measures, including the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Gramm-Leach-Bliley Act.

Pahl said that his CFPB experience will be helpful in dealing with various stakeholders that encapsulate consumer protection issues. The time spent at the CFPB can be very helpful “looking for the best ways for the FTC to make use of its institutional experience,” he said.

Recently, the CFPB’s enforcement authority has been called into question, and advocates worry that the regulator may be overstepping its bounds. A Jan. 24 report by the American Bar Association said the CFPB and the FTC should adopt a series of changes to improve the transparency and fairness of their enforcement programs.

To contact the reporter on this story: Jimmy H. Koo in Washington at jkoo@bna.com; Daniel R. Stoller in Washington at dstoller@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

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