CES 2024: FTC Commissioner Slaughter Discusses New Rules, Competition, and AI

Federal Trade Commission (FTC) Commissioner Rebecca Slaughter spoke at CES 2024 on Wednesday about some of the agency’s top priorities in the tech sector. As part of an interview for the “Conversation with a Commissioner” series, Commissioner Slaughter answered questions about the agency’s approach to rulemaking, competition, and – keeping with a big theme of CES this year – artificial intelligence (AI). Below are some highlights.

AI. Commissioner Slaughter echoed other government officials in noting the potential benefits of AI, and talked about the FTC’s role in helping to “unleash” the benefits while protecting against downside risks. She highlighted two key consumer protection priorities – avoiding deception and protecting privacy. On the deception front, she noted the risks of overpromising what AI can do from a marketing perspective, without being able to deliver the benefits. And on the privacy front, she noted that AI models are often fueled by large amounts of data, and emphasized the need to protect consumers’ privacy. These comments generally track guidance on AI that the FTC has been releasing through a series of posts by FTC staff and the Office of Technology, and further highlight that AI is an agency priority.

Commissioner Slaughter also noted that the agency is looking at competition in AI, and in particular whether there are “gatekeepers” that might inhibit competition that would drive AI development. Indeed, she touted the FTC’s focus on competition in AI as a way to help broadly promote AI’s benefits. Her emphasis on competition aligns with recent statements from others at the FTC, such as a recent post by the FTC Office of Technology about what it calls “model-as-a-service” companies that provide AI models for use by third parties.

Competition. Commissioner Slaughter also discussed the FTC’s competition approach more broadly. In particular, she discussed the agency’s 2022 policy statement on unfair methods of competition, which adopts a broad view of the policy goals that the FTC can pursue through its competition enforcement. She specifically highlighted the agency’s efforts to restrict use of non-compete agreements, which has been the subject of enforcement actions as well as a pending rulemaking. Additionally, she talked about joint efforts with the U.S. Department of Justice to update Hart-Scott-Rodino (HSR) reporting obligations for proposed transactions over a certain threshold, suggesting that the requirements need to be updated to make agency review more efficient, even if it requires additional information to be submitted by the parties. 

Additionally, Commissioner Slaughter discussed consumer device repair as an issue at the intersection of competition and consumer protection. She noted that the FTC had previously released a report and policy statement on consumer repair options. The FTC is currently seeking comment on a petition by outside groups for the FTC to commence a rulemaking on consumer device repair matters.

Rulemakings. Commissioner Slaughter was constrained in talking about any ongoing rulemakings that are under consideration by the Commission, but she did talk generally about the FTC’s approach. FTC rulemakings are front and center now, with active rulemakings covering, for example, online cancellation policies, fee disclosures, impersonation scams, and health data breaches, and children’s privacy.  She characterized the rulemakings as providing “clarity” to companies by outlining what the FTC considers to be a legal violation. She also noted that the FTC cannot deem a practice to be illegal through rulemaking if the practice is actually legal. This latter point reflects that the FTC’s rulemaking authority is limited by statute – for example, under the FTC Act, the FTC must show that practices are deceptive and unfair in order to regulate them by rule. Indeed, the FTC ultimately may face legal challenges to any final rules based on arguments that it has exceeded its authority under the relevant statutes.

One of the most high-profile pending rulemakings is the FTC’s proceeding on “commercial surveillance,” which remains at an early stage. The FTC continues to review comments submitted in response to an extensive Advance Notice of Proposed Rulemaking. Commissioner Slaughter gave no indication as to the timing and form of proposed rules, but she did reiterate her belief that the FTC cannot wait for Congress to act on national privacy legislation before moving forward with its own approach.

For more information on CES, also check our post on remarks by two FCC Commissioners.