Trump’s FTC Choice Likely to Keep Data Security Status Quo

By Daniel R. Stoller

President Donald Trump’s choice to lead the Federal Trade Commission, announced Oct. 19, would likely keep the same data security enforcement focus as his immediate predecessors, former agency officials and privacy attorneys told Bloomberg Law.

Trump announced his intent to nominate Republican antitrust attorney Joseph Simons and Democratic consumer protection advocate Rohit Chopra to seats on the commission, and designate Simons as chairman upon his confirmation. A White House spokesperson confirmed to Bloomberg Law that Trump also intends to nominate Republican Noah Phillips, chief counsel to Sen. John Cornyn (R-Texas), as an FTC commissioner, but no formal announcement date is planned.

Simons will face tough data security issues, if confirmed by the Senate as is likely. The FTC is investigating Equifax Inc. following a data breach that exposed the credit report records of some 143 million U.S. consumers and others around the globe. The high-profile probe may be the first major challenge for the new FTC chairman and staff, privacy attorneys and former officials said.

The FTC is unlikely to make aggressive changes to its data security and privacy mission, former officials and privacy attorneys said. The FTC’s data security enforcement policy “is well-institutionalized after many years of enforcement,” and is a non-partisan issue that “depends a great deal upon professional staff, which will remain,” Christopher Wolf, of counsel at Hogan Lovells LLP in Washington and board chair for the Future of Privacy Forum, told Bloomberg Law Oct. 19.

Although Simons has a strong antitrust background, attorneys and former FTC officials told Bloomberg Law that he will be able to tackle privacy and data security matters quickly. Simons is also expected to work well with current acting FTC Chairman Maureen Ohlhausen (R), who has taken up data security initiatives during her tenure.

Data security and privacy matters are “a high priority for the FTC,” and Simons “will play an active role in setting the agency’s agenda in this area,” Lydia Parnes, privacy and data protection partner at Wilson Sonsini Goodrich & Rosati in Washington and former director of the FTC’s Bureau of Consumer Protection, told Bloomberg Law Oct. 19. Simons will be able to work with current commissioners to further these goals, she said.

If confirmed, Simons would be instrumental to the “development of the FTC’s data security enforcement mission,” Joshua Wright, a former Republican FTC commissioner and executive director of the Global Antitrust Institute at George Mason’s Antonin Scalia Law School, told Bloomberg Law Oct. 19. Simons will likely bring a “deeper integration of economic thinking into the shaping of policy and enforcement decisions,” and “intellectual leadership to data security,” he said.

Status-Quo

At full strength, the FTC has five commissioners including the chairman. No more than three members of the same party may serve as commissioners.

Trump is behind past presidents in choosing a FTC chairman. President Barack Obama named Commissioner Jon Leibowitz as chairman in February 2009. Bush selected Timothy Muris in March 2001.

Phyllis Marcus, consumer protection partner at Hunton & Williams LLP in Washington and former chief of staff in the FTC’s Bureau of Consumer Protection, told Bloomberg Law Oct. 19 that “realities and market forces,” such as the Equifax data breach, will continue to put pressure on the agency to focus on data security issues. Even if Simons wanted to limit this enforcement area, the prevalence of cyberattacks and data breaches will mean that the FTC must remain vigilant, she said.

D. Reed Freeman, privacy and cybersecurity partner at Wilmer Cutler Pickering Hale and Dorr LLP in Washington and former staff attorney for the FTC’s Bureau of Consumer Protection, told Bloomberg BNA Oct. 19 that Simons will follow, to some extent, what “Ohlhausen has done on data security and privacy issues before the FTC.” However, there is a chance there could be changes on the margins from prior administrations, such as limiting “cases where the harm is intangible,” but these won’t impact the agency’s overall data security and privacy mission.

Simons will also be able to rely on his prior FTC experience as the director of the Bureau of Competition to work with staff to further these goals, Freeman said.

To contact the reporter on this story: Daniel R. Stoller in Washington at dstoller@bna.com

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

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.