# Hearings on Competition and Consumer > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3Aa56a276e32e18f32 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Hearings on Competition and Consumer Protection in the 21st Century The FTC’s Role in a Changing World Federal Trade Commission October 2020 FEDERAL TRADE COMMISSION October 2020 Joe Simons Noah Joshua Phillips Rohit Chopra Rebecca Kelly Slaughter Christine S. Wilson Chairman Commissioner Commissioner Commissioner Commissioner This Report represents the views of staff of the FTC’s Office of International Affairs and not necessarily those of the Commission or any Commissioner. The Commission has authorized the staff to issue the Report. This report is available online at https://www.ftc.gov/news-events/events-calendar/ftchearing-11-competition-consumer-protection-21st-century. The online version of this report contains live hyperlinks. The FTC’s Role in a Changing World: Staff Recommendations and Report Contents INTRODUCTION AND RECOMMENDATIONS 4 APPENDIX 11 OPENING REMARKS BY CHAIRMAN JOSEPH SIMONS 12 SETTING THE INTERNATIONAL SCENE 13 SUMMARY OF PANEL 1: Building Enforcement Cooperation for the 21st Century 16 SUMMARY OF PANEL 2: Consumer Protection and Privacy Enforcement Cooperation 19 SUMMARY OF PANEL 3: Competition Enforcement Cooperation 23 SUMMARY OF PANEL 4: International Engagement and Emerging Technologies: Artificial Intelligence Case Study 26 REMARKS BY COMMISSIONER NOAH PHILLIPS 30 SUMMARY OF PANEL 5: Implications of Different Legal Traditions and Regimes for International Cooperation 31 REMARKS BY COMMISSIONER CHRISTINE WILSON 35 SUMMARY OF PANEL 6: Promoting Sound Policies for the Next Decade 36 SUMMARY OF PANEL 7: Effective International Engagement: Foreign Agency Perspectives 40 REMARKS BY JAMES RILL 44 SUMMARY OF PANEL 8: The FTC’s Role in a Changing World 46 ENDNOTES 50 The FTC’s Role in a Changing World: Staff Recommendations and Report INTRODUCTION AND RECOMMENDATIONS On March 25-26, the Federal Trade Commission held the eleventh in its series of hearings, “Competition and Consumer Protection in the 21st Century.” This session, “The FTC’s Role in A Changing World,” co-sponsored by the George Washington University Law School Competition Law Center and organized by the FTC’s Office of International Affairs, explored the FTC’s international role in light of globalization, technological change, and the increasing number of competition, consumer protection, and privacy laws and enforcement agencies around the world. 1 The session featured 44 speakers from 17 jurisdictions as well as presentations by FTC Chairman Joseph Simons and other current and former Commissioners. It elicited input from foreign and U.S. agency officials, private practitioners, and academic and civil society speakers on the implications of international developments for the FTC’s work on behalf of American consumers. The session also touched on issues explored in other hearings sessions such as the role of the consumer welfare standard in antitrust enforcement and the implications of predictive analytics, artificial intelligence, and big data. The session looked at different aspects of the FTC’s international program through five presentations and eight panels: • Building Enforcement Cooperation for the 21st Century • Consumer Protection and Privacy Enforcement Cooperation • Competition Enforcement Cooperation • International Engagement and Emerging Technologies: Artificial Intelligence Case Study • Implications of Different Legal Traditions and Regimes for International Cooperation • Promoting Sound Policies for the Next Decade • Effective International Engagement: Foreign Agency Perspectives • The FTC’s Role in a Changing World The presentations and panels provided information and ideas for the FTC to consider on: the effectiveness of the FTC’s enforcement cooperation tools and approaches in light of new challenges in competition, consumer protection, and privacy matters; the effectiveness of the FTC’s approaches to promoting international policy coordination and best practice development; and strategies for international enforcement and policy engagement in today’s dynamic global marketplace. Page4 The FTC’s Role in a Changing World: Staff Recommendations and Report In addition to session testimony, several organizations and individuals submitted comments for the record in response to the hearing announcement, which posed 21 questions related to the panel topics. 2 Twenty-four years ago, Chairman Pitofsky anticipated the major role that globalization and technological change would play in shaping the FTC's priorities and enforcement agenda. This hearing, dedicated to the international aspects of the Commission’s missions, reflects the important role that the international dimension of the FTC's competition, consumer protection, and data privacy work are to accomplishing our goals. – Randolph Tritell, Federal Trade Commission Based on the hearing, the Office of International Affairs makes the following five observations and recommendations: 1. We applaud Congress’s recent reauthorization of the U.S. SAFE WEB Act, 3 which will continue to protect American consumers and facilitate cross-border commerce. Congress should make its provisions a permanent part of the FTC Act to protect American consumers and facilitate cross-border commerce. 2. The FTC should pursue additional mechanisms for enhanced antitrust information sharing and investigative assistance and work to overcome foreign barriers to FTC enforcement. 3. The FTC should continue to exercise international leadership, leveraging its expertise and cross-disciplinary synergies to address emerging issues. 4. The FTC should expand on its initiatives to build strong relations with counterparts, including through its International Technical Assistance and International Fellows programs. 5. The FTC’s experience and expertise should inform U.S. government policies that involve international issues within the FTC’s mandate. This report elaborates on these observations and recommendations, which are grounded in the hearing record and the related experience of the Office of International Affairs. 1. We applaud Congress’s recent reauthorization of the U.S. SAFE WEB Act, which will continue to protect American consumers and facilitate cross-border commerce, and request that Congress make its provisions a permanent part of the FTC Act. The Undertaking Spam, Spyware, And Fraud Enforcement With Enforcers beyond Borders Act (“SAFE WEB Act”), enacted in 2006 for a period of seven years, and reauthorized in 2012 through September 30, 2020, was a key topic throughout the international hearings. 4 The SAFE WEB Act confirms the FTC’s legal authority to sue foreign wrongdoers and challenge Page5 The FTC’s Role in a Changing World: Staff Recommendations and Report misleading practices with a nexus to the United States or American consumers. It gives the FTC critical powers to enhance cross-border cooperation on consumer protection investigations and fraud actions, as well as to support cross-border data transfer mechanisms. It also enhances the agency’s ability to cooperate through memoranda of understanding, international agreements, and staff exchanges. The FTC has used the Act’s powers hundreds of times in a wide range of cases – from Internet pyramid schemes and sweepstakes telemarketing scams, to complex advertising and privacy investigations. Recognizing the critical importance of the Act to accomplishing the FTC’s mission, the Commission asked Congress to reauthorize the Act and eliminate the sunset provision so that the Act’s provisions become a permanent part of the FTC Act. 5 Congress reauthorized the SAFE WEB Act on September 24, 2020. H.R. 4779 was signed into law on October 20, 2020, extending the SAFE WEB Act with a seven-year sunset provision to September 30, 2027. 6 The hearings confirmed the Act’s value and success as well as the need to make it a permanent part of the FTC’s authority. Foreign consumer protection, privacy, and criminal law enforcement officials, as well as senior U.S. agency officials and academics, singled out the legislation as “a key element” of the FTC’s response to a changing world. 7 Former FTC Chairman and George Washington University Law School Professor William Kovacic explained that the Act created an “indispensable element of the infrastructure that supports international cooperation today” by supporting reciprocal assistance, bilateral information sharing, and international staff exchanges. 8 Foreign enforcers, including representatives from the United Kingdom’s Information Commissioner’s Office and two Canadian law enforcement agencies agreed, citing numerous, concrete examples of investigative and case cooperation pursuant to the SAFE WEB Act. 9 Others described how they had developed reciprocal mechanisms modeled on the SAFE WEB Act that enable them to provide similar assistance to the FTC. 10 Deputy Assistant Secretary James Sullivan from the Department of Commerce’s International Trade Administration underscored the importance of the Act for cross-border commerce. He explained, for example, that the FTC’s powers under the Act are “integral” to the functioning of the APEC Cross-Border Privacy Rules System, an important mechanism that many U.S. companies use to carry out cross-border data flows. 11 Eliminating the sunset provision in the SAFE WEB Act would bring the FTC in line with agencies like the Securities and Exchange Commission, which obtained such powers, without a sunset, more than 25 years ago. 12 Indeed, an SEC official at the hearing described how the SEC has used its similar authority as the basis for developing a multilateral mutual enforcement arrangement that handles thousands of requests each year and helps protect American investors from securities fraud. 13 Like the SEC, the FTC needs the SAFE WEB Act’s tools as part of its permanent authority so it can continue and expand its current cross-border enforcement efforts to protect U.S. consumers. Page6 The FTC’s Role in a Changing World: Staff Recommendations and Report 2. The FTC should pursue additional mechanisms for enhanced antitrust information sharing and investigative assistance and seek to overcome foreign barriers to FTC enforcement. In today’s interconnected world, the ability of agencies to obtain and share information quickly and efficiently is critical to cross-border investigations. Participants stressed the importance of streamlining the processes for obtaining information, including confidential information, and investigative assistance from counterpart agencies. 14 While the U.S. SAFE WEB Act provides valuable tools to aid cross-border consumer protection and privacy investigations, the Commission’s ability to pursue evidence in cross-border antitrust cases is less robust. The FTC has entered into a network of competition cooperation agreements and memoranda of understanding that have provided important legal frameworks for cooperation and catalyzed closer staff relationships. 15 They do not, however, provide for the ability to share confidential information or to use domestic investigative tools to provide investigative assistance to the other country’s agency. The International Antitrust Enforcement Assistance Act of 1994 provided the authority to enter into agreements that would provide those tools through mutual assistance agreements. 16 However, because various impediments, including statutory and policy-based restrictions on the ability to use information received from foreign authorities for non-antitrust purposes and in criminal prosecutions, the FTC and DOJ have been able to conclude only one agreement (with Australia) pursuant to the Act. The agencies should therefore redouble their efforts to overcome these obstacles, as, for example, the Securities and Exchange Commission has been able to do in participating in the Multilateral Memorandum of Understanding of the International Organization of Securities Commissions (IOSCO). 17 The agencies may also wish to consider seeking statutory changes that would better enable the agencies to fulfill the goals Congress intended in enacting the statute. Panelists also discussed how the growth of privacy and data protection laws internationally presents challenges for cross-border investigations and cases. They recognized the value of safeguarding personal data, but expressed concerns that some laws are constraining agencies from sharing or obtaining, for example, personal information in consumer complaints or documents that include a company employee’s personal data. At the hearings, several enforcers described situations when their agencies either wanted to share or obtain information for enforcement purposes with their counterparts, but were unable to do so because of privacy laws. 18 They observed that, in some cases, counterpart agencies had confused privacy and confidentiality laws, or invoked privacy laws as a reason not to share even non-personal, nonconfidential information. 19 Nonetheless, panelists agreed that agencies could overcome such challenges while adhering to privacy laws. James Dipple-Johnstone, from the UK Information Commissioner’s Office, for Page7 The FTC’s Role in a Changing World: Staff Recommendations and Report example, advised agencies to think about “what information do you need, how is it going to be transmitted, how is it going to be secured, and what purpose is it going to be used for.” 20 In addition, representatives from securities agencies explained how IOSCO and the European Securities and Markets Authority entered into an “administrative arrangement” to allow EU authorities to use the “public interest” exception in the General Data Protection Regulation (GDPR) to share personal data in securities investigations with non-EU authorities that commit to data safeguards. 21 Given its expertise in privacy and data security, the FTC should play a lead role internationally in reducing barriers to information sharing by developing mechanisms for regulators and enforcers to share information effectively and efficiently while providing strong protections for consumer data. 3. The FTC should continue to exercise international leadership, leveraging its expertise and cross-disciplinary synergies to address emerging issues. The hearings provided strong support for FTC leadership on antitrust, consumer protection, and privacy and data security issues in international policy organizations and enforcement networks. 22 Panelists recognized the FTC’s leadership in promoting sound antitrust enforcement internationally, and offered suggestions for its continuation and expansion. They cited the FTC’s role in the International Competition Network (ICN), a network of virtually all of the world’s competition agencies aimed at promoting convergence toward sound competition policy and enforcement and cooperation among member agencies. The FTC has led projects resulting in several important best practice recommendations, including on merger notification and review procedures and on the assessment of dominance. Most recently, the FTC led the ICN’s project on due process principles, resulting in Guiding Principles on Procedural Fairness and Recommended Practices for Investigative Process. Several panelists urged the FTC to continue its leadership, including in the critical area of due process. The FTC’s leadership in the OECD and UNCTAD were similarly cited for their positive influence on the development of global antitrust policies and enforcement. 23 Panelists also commended the FTC’s sharing of its research, policies, and practices with the international community, including through issuing guidelines and publishing studies. 24 In 2017, for example, the FTC played a primary role in revising the provisions of the Antitrust Guidelines for International Enforcement and Cooperation that described the agencies’ policy regarding the use of extraterritorial remedies, and recommended that other agencies consider adopting the same approach. 25 The hearings also drew calls for the FTC to expand its leadership efforts in newer international policy areas. While many jurisdictions are tackling privacy and data security issues for the first time, the FTC has decades of experience in analyzing privacy issues arising from new consumer- Page8 The FTC’s Role in a Changing World: Staff Recommendations and Report facing technologies and bringing enforcement actions that establish strong privacy and data security norms and practices for businesses. Several panelists urged the FTC to promote these norms and advance best practices globally, including through interoperable data transfer frameworks and accountability mechanisms. 26 One panelist from the OECD explained that the FTC’s understanding of markets makes it “perfectly poised” to lead on issues relating to privacy and data as a driver of production in the economy. 27 Panelists also identified challenges to FTC leadership, noting the growth of privacy laws and frameworks in Europe and other foreign jurisdictions. 28 Even without comprehensive U.S. privacy legislation, panelists agreed that the FTC has an important leadership role to play internationally. They cited the agency’s broad jurisdiction and history of strong enforcement and remedies in privacy and data security cases. Some panelists recognized, however, that the FTC would need help from Congress to maintain U.S. leadership in this area. Echoing the Commission’s recent Congressional testimony calling for strong, comprehensive privacy legislation, former Chairman Kovacic called for new U.S. privacy laws with a “comprehensive FTC mandate with no jurisdictional carve-outs” to ensure the FTC’s continued, effective international engagement. 29 4. The FTC should expand on its initiatives to build strong relations with counterparts, including through its International Technical Assistance and International Fellows programs. Panelists urged the FTC to build on its work promoting international convergence and developing strong enforcement cooperation partnerships by engaging directly with the leadership and staff of its foreign counterparts in new ways. The agency already fosters these relationships bilaterally and through regional and multilateral fora, including the OECD, ICN, and ICPEN. In addition to a continuing focus on case cooperation and dialogue, panelists suggested that the FTC explore additional opportunities for joint initiatives such as joint workshops and studies, and more regional engagement to deepen relationships and understanding among agencies. Panelists also expressed support for the FTC’s International Technical Assistance program and International Fellows program, characterizing them as valuable tools to build capacity, deepen cooperation, and promote convergence. For the past thirty years, the FTC has provided technical assistance to foreign competition and consumer protection agencies, conducting hundreds of short and long-term training missions and commenting on proposed laws, regulations, and guidelines. 30 In 2007, the FTC established its International Fellows program based on authorizing provisions in the SAFE WEB Act. 31 Since then, the agency has hosted over 120 officials from 40 countries for periods of several months and has detailed staff to counterpart agencies. Several panelists stated that these types of programs help agencies bring their laws and practices into line with international best practices and strengthen ties between agency officials. 32 These programs are subject to FTC resource constraints as well as technical Page9 The FTC’s Role in a Changing World: Staff Recommendations and Report assistance funding from USAID and other agencies. 5. The FTC’s experience and expertise should inform U.S. government policies involving international issues that fall within the FTC’s mandate. Issues within the FTC’s mandate often involve other U.S. government agencies that, increasingly, encounter competition, consumer protection, and data privacy concerns in their international work. These include, for instance, issues of national treatment, due process, and treatment of intellectual property rights in foreign antitrust enforcement and remedies in foreign privacy enforcement. Citing the FTC’s experience and expertise in competition, consumer protection, and data privacy law and policy, panelists expressed support for an appropriate FTC role in related U.S. government discussions. For example, the FTC could play an important role when the U.S. government evaluates and responds to foreign legislative or regulatory proposals that fall within the FTC’s mandate. Panelists noted that the FTC can be an effective advocate for principles such as consumer welfare, sound economics, and interoperability of systems that promote U.S. interests and serve American consumers. Based on its expertise and its constructive relationships with foreign agencies, the FTC can help assess the impact of prospective foreign government policies and enforcement on competition, consumer protection, and data privacy law and policy and on U.S. interests. Thus, at the hearing, former Assistant Attorney General for Antitrust James Rill noted “[w]hatever decisions are being made on antitrust, the DOJ and the Commission should have a seat at the table.” 33 The FTC has been a valuable contributor to the U.S. interagency process and can continue to help guide U.S. policy involving international issues that fall within the FTC’s mandate to best serve the interests of American consumers. P a g e 10 The FTC’s Role in a Changing World: Staff Recommendations and Report APPENDIX P a g e 11 The FTC’s Role in a Changing World: Staff Recommendations and Report OPENING REMARKS BY CHAIRMAN JOSEPH SIMONS Federal Trade Commission Chairman, Joseph Simons, introduced the two-day session by recalling that this hearing’s focus on international issues echoes the emphasis on globalization that motivated the 1995 hearings convened by Chairman Pitofsky. He addressed the effect of international developments on core areas of the FTC’s international work – enforcement and policy cooperation – in consumer protection and competition matters. The Chairman explained the importance of the U.S. SAFE WEB Act for consumer protection enforcement cooperation in four key areas: information sharing, investigative assistance, crossborder jurisdictional authority, and enforcement relationships. 34 He cited the Act’s “remarkable success” in responding to 130 information-sharing requests from more than 30 foreign enforcement agencies since its inception in 2006. In particular, he highlighted the agency’s use of its SAFE WEB information sharing power in a recent $30 million settlement in sweepstakes scam case involving cooperation with Canada and the United Kingdom. 35 He called for a renewal of the U.S. SAFE WEB Act in 2020, without a sunset provision. 36 Chairman Simons also announced a consumer protection Memorandum of Understanding with the United Kingdom’s Competition and Markets Authority, which will further support the FTC’s enforcement cooperation. 37 Chairman Simons referenced other tools that facilitate enforcement cooperation for both missions such as bilateral and multilateral agreements and arrangements. In competition enforcement matters, Simons noted that the FTC cooperates “daily with our foreign counterparts.” 38 The Chairman cited the FTC’s participation and leadership in international networks, including the International Competition Network and International Consumer Protection and Enforcement Network, as well as the FTC’s own Technical Assistance and International Fellows programs. 39 He noted that these programs foster “trust-based relations and facilitate the development of best practices and effective and predictable enforcement cooperation. 40 Chairman Simons welcomed input on “whether there is more the FTC could and should be doing to promote sound consumer protection, privacy, and competition policy internationally.” 41 P a g e 12 The FTC’s Role in a Changing World: Staff Recommendations and Report SETTING THE INTERNATIONAL SCENE Recognizing the “extraordinary” developments of recent decades, former Chairman William Kovacic (now Professor at the George Washington University Law School and Non-Executive Director of the United Kingdom’s Competition and Markets Authority) launched the hearings by highlighting how technology and changes in the global competition, consumer protection, and privacy landscape have affected the FTC’s role. 42 Kovacic described the dramatic increase in both foreign legal frameworks and laws and in competition and consumer protection authorities, and in agencies’ growing, multidimensional mandates. 43 These changes have made the landscape more complex, but Kovacic noted that they present a “remarkable opportunity to measure and assess which kinds of practices might be well adopted on a global basis.” 44 He emphasized the important role that soft law organizations and regional and cross-border enforcement networks, such as the International Competition Network (ICN) and the International Consumer Protection Enforcement Network (ICPEN), have played in developing global best practices and guiding principles. 45 Kovacic explained that the FTC has always dealt with upheaval from new technologies – like the telephone and “talking picture[s].” 46 He nonetheless opined that “the absolute and relative rate of technological change is greater now and that’s changed the mix of issues that have come to the top of the agenda.” 47 He pointed to significant changes in information technologies that have “lifted the prominence of privacy” and made it the “preeminent regulatory issue of our time.” 48 Kovacic pointed to the European Union’s General Data Protection Regulation (GDPR) as an extraordinary regulatory development. 49 In the face of such technological and legal changes, Kovacic recognized that many institutions have already made fundamental structural changes and adopted new tools. 50 He nonetheless urged government institutions to engage in regular and systematic self-assessments to match the pace of innovation and change in the commercial sector. [A] broad lesson we derive from international experience is that if you’re not revisiting the adequacy of your framework every five years at a minimum, you’re missing a good game and you’re probably not doing your job properly because the array of changes in the world today dictate those changes. If commercial institutions are going to be proficient at innovation and change, the public institutions entrusted with their oversight have to be no less inventive, no less dynamic, and we see in so many areas globally those changes taking place. 51 –William E. Kovacic, George Washington University Law School Kovacic then offered his perspective on how the FTC has adapted to the changing world. Admitting he was not a “neutral observer,” he highlighted the creation of the FTC’s Office of P a g e 13 The FTC’s Role in a Changing World: Staff Recommendations and Report International Affairs (OIA), which consolidated several different work units within the FTC into a single international office. 52 Describing OIA’s work as “unsurpassed,” the former Chairman observed that the office constituted “extraordinary” infrastructure that is “indispensable” to functioning in this “new world of complexity.” 53 Kovacic identified the U.S. SAFE WEB Act as a “key element” of the agency’s response to a changing world. 54 He explained that, “SAFE WEB created an indispensable element of the infrastructure that supports international cooperation today” by supporting reciprocal assistance and bilateral information sharing. 55 It also provides for the International Fellows program, an exchange program that gives foreign officials an insider perspective on the FTC’s approaches, and supports the “human glue that holds together international relations.” 56 Kovacic praised the FTC’s Technical Assistance program as a “thoughtful and sustaining” approach to sharing perspectives from experienced practitioners to case handlers on possible ways to approach their work. 57 He noted that the FTC had engaged in competition technical assistance collaborations with Canada, the European Union, Germany, the Organization for Cooperation and Economic Development (OECD), and the United Nations Conference on Trade and Development (UNCTAD) that represented a “remarkable constellation of common effort.” 58 He also praised the FTC’s close bilateral and multilateral cooperation with Canadian authorities, describing the Competition Bureau as a “pillar indispensable to the ICN.” 59 Separating what the FTC could do on its own and what it could achieve only with help from others (such as Congress), Kovacic considered how the FTC might improve its tools and practices. He called for the agency to be more transparent, advocating for fuller disclosure on specific matters (i.e., explaining why it declined to take further steps after an investigation) and on the overall purposes of its programs. Kovacic also urged the agency to sustain its commitment to OIA and the international mission. 60 He encouraged the FTC to pursue self-reflection by seeking the insights of its international counterparts as to what worked well and what could be improved. 61 He recommended that the FTC do better job of explaining its activities and operation to the world. 62 He advocated including information on the agency’s infrastructure (e.g., its administrative processes, information management systems, and ethics and conflict of interest policies) in technical assistance trainings. 63 This would increase “understanding [abroad] of how policy is made here.” 64 Kovacic highlighted overcoming the common misperception that the United States lacks a privacy regime, stating that although it may not be as comprehensive as other systems, “[I]t does [exist], and . . . where it exists, it can bite you pretty hard.” 65 Turning to what the FTC could improve with the help of others, Kovacic urged more coordination with domestic agencies so the world knows who speaks for the United States on areas of shared jurisdiction. He urged the FTC and the DOJ to communicate in advance of giving speeches or making policy announcements in competition matters. Kovacic also pointed P a g e 14 The FTC’s Role in a Changing World: Staff Recommendations and Report to the extraordinarily close U.S. relationship with its Canadian counterparts as a model to extend to other similar regimes such as those of the United Kingdom, Australia, New Zealand, and Singapore. 66 He noted the work that went into forging this bond, a process of learning, “meeting after meeting” to understand each system and who does what. 67 He also advised that agencies could work together even more effectively by collaborating on prototypes that could be rolled out to others, engaging in case retrospectives on commonly examined targets, and conducting joint studies. 68 Kovacic concluded by explaining how Congress could help the FTC achieve its goals. First, he urged Congress to “renew SAFE WEB with no footnotes attached – unconditional, permanent renewal.” 69 Second, he called for new privacy laws with a “comprehensive FTC mandate with no jurisdictional carve-outs,” explaining “[i]t’s impossible to engage effectively internationally if that change doesn't take place.” 70 Kovacic concluded by calling on the FTC to focus more on infrastructure than “ribbon cutting opportunities” because such investments are “indispensable in this multi-polar, complex world . . . .” 71 P a g e 15 The FTC’s Role in a Changing World: Staff Recommendations and Report SUMMARY OF PANEL 1: Building Enforcement Cooperation for the 21st Century Recognizing that “the digital economy is the economy,” panelists delved into the effects of rapid technological change and globalization on the FTC and its foreign counterparts. 72 In his introductory remarks, Matthew Boswell, Canada’s Competition Commissioner, emphasized that commerce – and therefore consumer protection and competition enforcement – is not limited by borders. He called for more cooperation to approach new challenges and noted the need for timely agency action in a fast-moving digital economy. 73 The other panelists echoed Commissioner Boswell’s call and recommended streamlining cooperation procedures. They observed that enhanced cooperation leads to increased detection and deterrence of unlawful conduct. They recognized the value of sharing best practices: efficiencies for agencies, better protections for consumers, and less risk and uncertainty for businesses. 74 The panelists also discussed the range of cooperation mechanisms. Some spoke about the role that informal mechanisms play in developing trust and understanding among agency staff and officials. Thomas Barnett, who served as the Assistant Attorney General for Antitrust at the Department of Justice, emphasized the value of “personal, human interaction,” noting that the relationships he developed with foreign enforcers in networks such as the International Competition Network (ICN) facilitated “cooperation on some specific enforcement matters that might have been challenging if those relationships didn't exist.” 75 Others lauded the value of staff exchanges and technical assistance programs, such as resident advisors and seminars. Chilufya Sampa, Executive Director and CEO of Zambia’s Competition and Consumer Protection Commission, explained that these types of interactions with the FTC and other experienced agencies had helped the Zambian agency mature and become the first African president of the International Consumer Protection and Enforcement Network (ICPEN). 76 More and more, the conduct we investigate is not constrained by borders, and when change happens, the question is not how do we feel about it; the question is how will we respond to it. Will we rise to the challenge? Will we seize the opportunities that come with it? These are questions that governments around the world are facing, and how we answer these questions will define our success going forward. 77 –Matthew Boswell, Competition Bureau Canada Panelists also addressed the role of informal networks like ICN and ICPEN. Sampa stated that the ICN’s Framework for Merger Review Cooperation enabled his agency to share nonP a g e 16 The FTC’s Role in a Changing World: Staff Recommendations and Report confidential information with other competition agencies investigating the same merger transaction. 78 Commissioner Boswell spoke about the U.S.-Canada cross-border regional partnerships that collaborate cross-border on mass-marketing fraud investigations. 79 Sampa also noted the importance of regional enforcement networks such as the African trading blocs’ regional competition and consumer protection authorities. 80 The panelists discussed formal arrangements such as Memorandum of Understanding (MOUs) and international agreements. They concurred that Mutual Legal Assistance Treaties (MLATs) used in criminal matters could be cumbersome and slow, and viewed other agreements as more efficient. Commissioner Boswell pointed to the 1995 international agreement on competition and deceptive marketing practices between the United States and Canada as a successful “high level framework for our positive cooperative relationship.” 81 Jean-François Fortin, Executive Director of Quebec’s securities authority and chair of the International Organization of Securities Commissions (IOSCO) Enforcement and Information Exchange Committee, spoke about the IOSCO Multilateral Memorandum of Understanding (MMOU), which provides the basis for enforcement cooperation among securities regulators; the MMOU has 121 of 149 possible signatories. 82 To join the MMOU, securities authorities must have the legal capacity to share confidential information with foreign counterparts as well as the power to compel the production of information (such as bank and beneficial ownership records) and obtain testimony for foreign regulators. 83 In 2017, there were 4,803 requests for assistance under the MMOU. 84 Fortin said that the MMOU made cooperation “really efficient,” stating, “[o]bviously if you have to go and compel information and testimony and documents [it] can take some time, but if you have the information, literally, requests for information can be answered within weeks, if not days, and in urgent matters, it happens in a few hours.” 85 Focusing on legal authority, Commissioner Boswell stressed the importance of having laws that allow agencies to work together. 86 He described the FTC’s U.S. SAFE WEB Act investigative assistance authority as an “incredibly valuable tool” that helped the Competition Bureau obtain information for multiple consumer protection matters, including for its litigation involving wireless carriers’ deceptive practices in premium text messaging services. 87 He highlighted two Canadian laws: (i) the Canada Anti-Spam Law, modeled on the U.S. SAFE WEB Act, which allows the Bureau to use its investigative powers to assist foreign partners in certain deceptive marketing cases without requiring that it have an investigation into the same matter; and (ii) Article 29 of the Competition Act, which authorizes the Bureau to share confidential information for the administration or enforcement of the Act, even without party waivers. 88 Sampa agreed that agencies need strong domestic authority, explaining that 20 African agencies had adopted a set of principles to facilitate cross-border cooperation – the Livingstone Principles (also based on the U.S. SAFE WEB Act) – that recognize agencies’ need for effective enforcement powers. 89 The panelists addressed the effect of data protection and privacy laws on information sharing. 90 Both Commissioner Boswell and Sampa described situations when their agencies wanted to P a g e 17 The FTC’s Role in a Changing World: Staff Recommendations and Report either share or obtain information for enforcement purposes but were unable to do so. 91 Sampa noted that, in certain cases, counterpart agencies had cited privacy laws as a basis not to share even non-personal, non-confidential information. 92 Fortin explained that IOSCO members faced similar challenges in connection with the European Union’s General Data Protection Regulation (GDPR). 93 In response, IOSCO and the European Securities Market Authority entered into an “administrative arrangement” that allows EU authorities to use the GDPR’s “public interest” exception to share personal data in securities investigations with non-EU authorities that commit to data safeguards. 94 Sampa noted that his agency had entered into an MOU with South African agencies to enable them to share personal and confidential information. 95 Finally, looking to the future, some panelists advocated for better implementation of existing tools that facilitate cooperation, including identifying ways to improve their efficiency and timeliness. 96 Others raised the possibility of the ICN and ICPEN developing new multilateral arrangements along the IOSCO MMOU model, or considering pursuing multi-agency joint investigations. 97 All panelists concurred on the importance of having agencies work together to encourage and strengthen cooperation around the world. 98 P a g e 18 The FTC’s Role in a Changing World: Staff Recommendations and Report SUMMARY OF PANEL 2: Consumer Protection and Privacy Enforcement Cooperation The main theme emerging from this wide-ranging panel was the importance of robust enforcement cooperation in tackling technology-enabled consumer frauds, misleading commercial practices, and data privacy challenges. The panelists discussed bilateral, multilateral, and regional (i.e., European Union and the Asia Pacific Economic Cooperation (APEC)) mechanisms, as well as ways to strengthen cooperation. 99 James Dipple-Johnstone, Deputy Commissioner of the United Kingdom’s Information Commissioner’s Office (ICO), started with privacy enforcement cooperation. He reported that the ICO has worked with 50 international counterparts over the past year through information and intelligence sharing, staff exchanges, and joint investigations on a “complex and challenging caseload” including the Cambridge Analytica investigation. 100 Dipple-Johnstone highlighted the ICO’s cooperation with the FTC, noting that the agencies had used their respective information sharing powers – the FTC’s SAFE WEB Act and the ICO’s Data Protection Act of 2018 (DPA 2018) – in multiple matters. 101 Dipple-Johnstone described the FTC’s SAFE WEB investigative assistance provisions, which allow the agency to issue compulsory process on behalf of a foreign authority (e.g., robocalls, Ashley Madison) as a “huge positive” for the ICO. 102 The FTC’s assistance allowed the ICO to “fill in the missing pieces” and helped it “make better investigations.” 103 Dipple-Johnstone also mentioned the Global Privacy Enforcement Network (GPEN), the International Conference of Privacy and Data Commissioners (ICPDPC), and the Unsolicited Communications Enforcement Network, explaining that these networks provide participants with a shared understanding that “allows us to do our jobs more effectively.” 104 [T]he enforcement power and the international cooperation authority granted to the FTC under the SAFE WEB Act are both integral to the functioning of [data transfer] frameworks . . . Without them, they would lack legitimacy or credibility. 105 –James Sullivan, International Trade Administration James Sullivan, the Deputy Assistant Secretary for Services at the U.S. Department of Commerce’s International Trade Administration focused on enforcement cooperation within the context of the (recently invalidated) EU-U.S. Privacy Shield Frameworks and APEC’s Cross Border Privacy Rules system (APEC CBPR). 106 These frameworks, developed to bridge differences in countries’ privacy approaches, facilitate valuable international data flows by protecting personal data in accordance with internationally recognized privacy and data protection principles. 107 Sullivan explained the frameworks include compliance, dispute P a g e 19 The FTC’s Role in a Changing World: Staff Recommendations and Report resolution, and enforcement components; for example, APEC CBPR economies have to join a cross-border privacy enforcement arrangement to ensure cooperation and collaboration among their designated enforcement authorities. 108 Sullivan emphasized that though a company’s adherence to the frameworks is voluntary, the FTC may take (and has taken) enforcement action against false claims made in connection with either of these frameworks. 109 He stated that the FTC’s SAFE WEB authority is “integral” to the functioning of these international frameworks, noting that it would be difficult to ensure that companies comply with their commitments under the three data transfer frameworks without the FTC’s “powers to enforce and coordinate with other enforcement agencies cross-border.” 110 Sullivan added that business stakeholders, as well as foreign governments, want to see “strong frameworks that are actually enforceable, and they do want to see . . . greater collaboration because that’s going to lead to more consistent best practices or principles and approaches to a lot of these issues . . . .” 111 On consumer protection, Marie-Paule Benassi, the Acting Director for Consumer Affairs, DG Justice and Consumers, European Commission, discussed coordination among member states within the European Union. Although the substance of consumer laws in EU countries is mostly “harmonized,” the implementation and enforcement of those laws is not. 112 As a result, Benassi explained, the European Commission (EC) has traditionally played an important role in facilitating bilateral cooperation between member states. More recently, the European Union adopted a new Consumer Protection Cooperation Regulation, which gives the EC a stronger coordination role in addressing illegal practices by large companies that operate throughout the European Union. 113 It has also recently adopted new legislation to permit fines for these types of “EU-level infringements.” 114 Benassi used the EC’s recent “common position” against the five largest car rental companies in the European Union as an example. 115 There, the EC, working with the member states, analyzed the practices of top five car rental companies, wrote a common position asking the companies to change practices, and then obtained negotiated commitments from the companies. 116 [C]ross-border fraud continues to be a threat to the economic integrity of Canada and the U.S. [given how] voice-over-net protocols, social media, virtual currencies, money service businesses, and other key facilitators continue to provide criminals . . . opportunities to operate across multiple international jurisdictions.117 –Jeff Thomson, Canadian Anti-Fraud Centre Turning to North America, Jeff Thomson, Senior Intelligence Analyst at the Canadian AntiFraud Centre (CAFC) of the Royal Canadian Mounted Police (RCMP), highlighted the crossborder strategic partnerships on mass-marketing fraud. 118 The partnerships, which date back to 1997 when cross-border telemarketing fraud became a major concern for the United States and Canada, have representatives from civil, criminal, and regulatory agencies such as the FTC, the P a g e 20 The FTC’s Role in a Changing World: Staff Recommendations and Report U.S. Postal Inspection Service, the RCMP, and the Competition Bureau Canada (as well as local police and consumer agencies). 119 They share intelligence, often from their respective central databases (e.g., Consumer Sentinel and the CAFC), coordinate joint priority setting, appoint lead agencies for investigations, and identify investigative assistance needs and actions. 120 They help to establish “common trust and understanding amongst the partners to share information within the confines of law” and create “a platform to share and synthesize information from multiple perspectives.” 121 Thomson also highlighted the Memorandum of Understanding between the FTC and the RCMP and both agencies’ participation in the International Mass Marketing Fraud Working Group. 122 In particular, he emphasized the key role of FTC investigative assistance under the SAFE WEB Act for the strategic partnerships, stating, “This [A]ct alone has assisted [the] strategic partnerships in countless cases, at least 22 by my count since 2007 . . . .” 123 The cooperation in these cases helped lead to arrests, civil charges and forfeitures, and restitution and redress for consumers in both countries. 124 Next, noting that, “investor protection is essentially the same concept [as consumer protection],” Kurt Gresenz, the Senior Assistant Director at the U.S. Securities and Exchange Commission’s Office of International Affairs (SEC), provided the securities enforcement perspective. 125 He explained that the International Organization of Securities Commissions (IOSCO) requires securities regulators to have certain minimum powers including the ability to share information across borders for enforcement purposes through its Multilateral Memorandum of Understanding (MMOU). 126 Consistent with the MMOU, the SEC has long had the statutory authority to: (i) give access to confidential information to requestors, including foreign agencies, that can demonstrate need and the ability to maintain confidentiality; (ii) use the SEC’s compulsory process on behalf of a foreign authority (even for conduct that would not violate U.S. law); and (iii) provide protections from disclosure for information received from foreign securities authorities, including the ability to protect in litigation any material that would be privileged in the foreign jurisdiction. 127 Most national legislatures in IOSCO member countries have made similar amendments to their domestic law to enable them to meet the MMOU standards. 128 The SEC’s ability to use the MMOU to obtain information for its matters is critical because the SEC often investigates entities that are incorporated in two or three different jurisdictions, targeting victims in multiple countries (e.g., the United States, the United Kingdom, and Australia) and storing their documents in the cloud or yet other jurisdictions. 129 Indeed, Gresenz indicated that the SEC makes around 600-800 of the 5,000 requests processed under the MMOU each year. 130 The panelists also discussed challenges to enforcement cooperation, including whether privacy laws such as the European Union’s General Data Protection Regulation (GDPR) present barriers. Dipple-Johnstone observed that though privacy regulations can impose challenges, there are often ways to overcome them. 131 He advised agencies to think about “what information do you need, how is it going to be transmitted, how is it going to be secured, and what purpose is it P a g e 21 The FTC’s Role in a Changing World: Staff Recommendations and Report going to be used for.” 132 Benassi added that it is important to distinguish between privacy concerns and the need to maintain the confidentiality of investigative information. 133 She explained that the GDPR facilitates information exchange within the European Union, and opined that the GDPR could be an “enabler” for international cooperation because it clarifies what authorities can exchange information, even when that information contains personal data. 134 Gresenz highlighted the new “administrative arrangement” that IOSCO developed to enable the transfer of personal data, consistent with the GDPR, between EU securities authorities and other non-EU IOSCO members who join the arrangement. 135 Finally, panelists identified additional challenges and some potential solutions. Thomson noted that criminal law enforcement authorities often do not prioritize fraud and financial crime. 136 He suggested focusing on an “intelligence-led” approach to “start driving enforcement action in a more targeted and effective manner.” 137 He suggested strengthening “disruption” – cooperating with private sector partners to block and shut down subscription traps, continuity schemes, and counterfeit sales of goods online – internationally. 138 Gresenz noted challenges arising from jurisdictions that allow for more latitude regarding certain practices or have a more restrictive approach to information sharing. 139 These differences, which are often exploited by bad actors when they choose where to operate or keep their ill-gotten gains, result in investigations that may not only move at different paces but lack international cooperation. 140 Sullivan observed that because it was unlikely that countries would adopt a global standard for data privacy, countries could figure out how to make different regimes work together through “flexible” and “adapt[able]” approaches like APEC’s interoperability approach – and through interoperability between APEC and GDPR. 141 Benassi concurred, stating that it would also be difficult to have a single, harmonized approach for consumer protection, stating that the way forward could be through “practical enforcement tools” like the common action and through high-level principles. 142 She also noted that the “internationalization” of fraud on the Internet and large online platforms is “becoming a very big problem in terms of the harm caused to consumers” and suggested prioritizing. 143 Benassi also pointed to “new types of misleading practices” arising from “data economics,” and suggested building links between competition, data protection, and consumer protection to understand potential consumer harm. 144 Dipple-Johnstone ended the session, noting the need to “support innovation in a practical sense” by keeping updated on the “vast changes” in the technology landscape to avoid becoming the “ministries of no.” 145 He also stressed maintaining the right links internationally and coordinating with domestic authorities “so that the offer we can make internationally is the right one.” 146 P a g e 22 The FTC’s Role in a Changing World: Staff Recommendations and Report SUMMARY OF PANEL 3: Competition Enforcement Cooperation Panelists from foreign competition agencies and the private bar offered perspectives on enforcement cooperation among competition agencies. Panelists were unanimous in emphasizing that competition agencies must prioritize international case cooperation, especially given today’s global economy. 147 Panelists agreed that both competition agencies and businesses benefit from case cooperation among competition agencies. 148 From the agency perspective, case cooperation can encourage sharing ideas and approaches, which can lead to a greater understanding of the salient issues, less duplication, and greater efficiency. 149 Panelists credited case discussions among cooperating agencies for streamlining existing investigations and preventing fruitless ones. 150 Case cooperation can also increase the overall effectiveness of enforcement while decreasing the likelihood of conflicting outcomes. 151 As Nicholas Banasevic, Head of Unit responsible for antitrust in the field of IT, the internet, and consumer electronics at the European Commission’s Directorate-General for Competition, observed, cooperation not only “bring[s] organic benefits to an . . . individual case,” but also helps generate a more broad-based understanding of policy and procedural similarities and differences. 152 Likewise, businesses benefit from case cooperation because it contributes to more focused, less burdensome investigations, and more predictable, consistent, and timely outcomes. 153 In her experience, Fiona Schaeffer, a partner at Millbank LLP, has found that case cooperation has “expedited, not prolonged, the [agencies’] review” and has not “started new lines of attack that didn’t exist before.” 154 Enforcers have to respond to the pace of change and globalization by working more closely together. . . . We need to do this for three reasons. Firstly, because . . . we will facilitate more efficient commerce. Secondly . . . we’ll be more effectively able to police compliance with laws in our jurisdiction. And, finally, because we’ve got scarce resources and working together is likely to prevent us from reworking issues, from seeking to reinvent the wheel or overlapping each other’s work. 155 –Marcus Bezzi, Australian Competition and Consumer Commission Panelists identified specific examples of close case cooperation among competition agencies yielding tangible benefits. 156 Jeanne Pratt, Senior Deputy Commissioner at the Canadian Competition Bureau (CCB), explained that her agency has participated in joint interviews and has coordinated with other agencies on remedies. 157 Remedy coordination has resulted in the CCB’s appointing common monitors with other agencies and even foregoing its own remedies P a g e 23 The FTC’s Role in a Changing World: Staff Recommendations and Report when another agency’s remedies addressed the CCB’s concerns. 158 With regard to forbearance, Marcus Bezzi, Executive Director at the Australian Competition and Consumer Commission (ACCC), said that his agency also has relied on a foreign agency’s remedy by accepting an “enforceable undertaking,” whereby a party commits to the ACCC that it will abide by the foreign agency’s remedy. 159 Banasevic credited discussions with the U.S. Department of Justice during its Microsoft investigation for leading to more complementary remedies, and discussions with the FTC relating to standard essential patents contributing to more consistent approaches to cases and related policies. 160 Panelists agreed that informal exchanges between agency staff are the most common and useful case cooperation tool. 161 Those discussions can usually include agency non-public information (information that that agencies are not statutorily prohibited from disclosing but normally treat as non-public) covering topics like investigative approaches, theories of harm, market definition, and a high-level discussion of remedies. 162 In many instances, that level of information exchange is sufficient. 163 However, in some cases agencies may seek waivers of confidentiality from the parties to allow more in-depth cooperation, including detailed remedies discussions, in order to facilitate a more effective and efficient investigation. 164 In addition to informal case cooperation, panelists addressed the role of formal investigative case cooperation agreements. 165 Several panelists indicated that while formal agreements, such as Mutual Legal Assistance Treaties (MLATs), can be theoretically useful, especially when materials are only available in another jurisdiction, using some of the existing arrangements can be slow and cumbersome. 166 Bezzi acknowledged that the U.S.-Australia Mutual Antitrust Enforcement Assistance Agreement, which allows the exchange of confidential information and the provision of investigative assistance, has rarely been invoked formally. 167 Banasevic noted a comparable experience with the similar “second-generation” cooperation agreement between the European Union and Switzerland. 168 But both panelists noted that those agreements had nonetheless enabled greater case cooperation, including by encouraging the production of documents and/or the provision of waivers. 169 As Bezzi explained, the “formal arrangements really do enhance the informal.” 170 For second-generation cooperation agreements to be more effective, panelists believed that the agreements would need to streamline the process for obtaining information and investigative assistance from a counterpart agency, including shorter timeframes. 171 Bezzi cited the International Organization of Securities Commissions’ Multilateral Memorandum of Understanding (MMOU) as providing a model for engagement “in days or weeks rather than months or years.” 172 He highlighted the value of the U.S.-Australia agreement’s provisions on investigative assistance, but agreed that such assistance is more common in consumer protection matters, through the U.S. SAFE WEB Act and related statutes. 173 Panelists highlighted that regardless of the means, case cooperation relies on establishing trusting P a g e 24 The FTC’s Role in a Changing World: Staff Recommendations and Report relationships between the staffs and senior management at the two cooperating agencies. 174 For cooperation to be valuable, agencies must be comfortable that their counterparts are honest in their communications and will protect the confidentiality of the information they share. 175 Additionally, in cases involving remedy cooperation and comity, agencies must believe that their counterparts will enforce their remedies. 176 Pratt suggested, however, that case cooperation alone may not be enough to build those connections as well as a broader understanding of each agency’s framework and approach. 177 To accomplish those important goals, she encouraged developing deeper interagency ties through staff interactions and joint initiatives outside of the context of specific cases, including through joint workshops and staff exchanges. 178 Informal cooperation tools . . . only work if you’ve got trust in the legitimacy, the competence, the candor and, frankly, the ethics of your counterparts in the other agency. 179 –Jeanne Pratt, Competition Bureau Canada While there was a general appreciation that cooperation benefits both agencies and parties, panelists identified several additional areas for improvement. One challenge to further case cooperation is the variations in agency processes and timetables that can render coordination, especially on remedies, difficult. 180 While parties can try to coordinate merger filings to avoid this outcome, they may not always succeed. 181 Some practitioners also expressed concern that case cooperation may result in a longer review if agencies accommodate the schedule of the slowest reviewing agency. 182 Agencies understand that these issues deserve further attention. Another possible hurdle is that while parties commonly grant waivers in merger investigations, they are often reluctant to do so in conduct cases. 183 Schaeffer explained that parties are concerned about providing waivers in conduct cases because of the potential for disclosure and greater risk that documents may become available in private litigation through discovery. 184 Yet some jurisdictions, including the United States, have laws that provide a higher level of protection for materials received from other agencies than from parties, which can help alleviate this concern. 185 Finally, panelists identified duplicative investigations and remedies as potentially straining both agency and company resources. 186 Agency panelists stressed that given limited resources, they are trying their best to avoid unnecessary overlap, including by deferring when another agency’s remedy addresses a shared concern, and focusing on issues of greatest relevance in their jurisdiction. 187 Agencies and parties appear committed to working together to develop new case cooperation tools and approaches to ensure effective and efficient investigations, including, for example, exploring the possibility of more party discussions involving multiple agencies simultaneously rather than the traditional approach where parties speak to each agency separately. 188 P a g e 25 The FTC’s Role in a Changing World: Staff Recommendations and Report SUMMARY OF PANEL 4: International Engagement and Emerging Technologies: Artificial Intelligence Case Study Recognizing that emerging technologies such as artificial intelligence (AI) are among the most important global developments of our time, a diverse group of experts discussed competition, consumer protection, and privacy challenges they can raise. The session used a “case study” approach to artificial intelligence to tackle two questions about how the FTC should deal with emerging technologies in an international context: • How can the FTC best work with foreign agencies to develop effective policies on competition, consumer protection, and privacy concerning emerging technologies, such as AI? What are the challenges? • From a practical perspective, what are the consequences of having differing approaches internationally to competition, consumer protection, and privacy enforcement regarding AI and other emerging technologies? Former FTC Commissioner Julie Brill, now Corporate Vice President and Deputy General Counsel for Global Privacy and Regulatory Affairs at Microsoft, introduced the topic by emphasizing the importance of building consumer trust in new technologies. She outlined six ethical AI principles Microsoft adopted to foster trust: transparency, accountability, fairness, reliability and safety, privacy and security, and inclusiveness. 189 Brill explained, however, that “the issues at stake are simply too large and too important to be left solely to the private sector,” and require a new foundation of laws, particularly privacy laws. 190 Rapid progress in the field of artificial intelligence has delivered us to the threshold of a new era of computing that will transform every field of human endeavor . . . . Yet, history teaches us that change of this magnitude has always come with deep doubts and uncertainty. 191 –Julie Brill, Microsoft Corporation Brill suggested that modern privacy laws must adjust to meet consumers’ needs, embracing the reality that “people expect to use digital tools and technologies to engage freely and safely with each other . . .” and that they expect “to be empowered to control how their personal information is used.” 192 Brill explained that achieving a framework of well-designed laws will require the FTC and other U.S. government agencies to engage in ongoing discussions and consultations, including gatherings such as these hearings, across governments and across sectors. 193 She said P a g e 26 The FTC’s Role in a Changing World: Staff Recommendations and Report the new framework should be “embedded at the U.S. Federal Trade Commission,” and address AI specifically, for example, by regulations on facial recognition technology. 194 Following Brill’s remarks, panelists provided international perspectives on consumer trust, agency expertise, regulation, and international cooperation. Deputy Commissioner of the UK Information Commissioner’s Office (ICO), James Dipple-Johnstone stated that regulators “must think about accountability, fairness, and transparency . . . to make sure that our citizens can have confidence in the rollout of AI, because if there isn’t confidence, I think that’s where we’re going to have challenges.” 195 Chinmayi Arun, Fellow at the Harvard Berkman Klein Center for Internet & Society and Assistant Professor of Law at the National Law University in Delhi, agreed that consumer trust is an important issue. She described the policy debates in India, which serves as a hub for numerous global technology companies and produces valuable commercial and state-generated data sets. Arun said that there are proposals for a new Indian privacy law containing data localization provisions, an amendment to the Information Technology Act, and debates about the right to privacy in the context of state surveillance and state protection of the public. 196 “[T]he big tension really is that, on one hand, the policymakers want to leverage this [AI] and have this data and . . . learn from it and, on the other . . . the question of the privacy rights of Indian citizens and especially of marginalized citizens, people who are not able to assert their [consumer] rights . . . .” 197 Other panelists raised similar concerns. Francis Kariuki, Director General of the Competition Authority of Kenya and Chairman of the African Competition Forum discussed AI’s potential positive and negative effects on competition and consumer protection in Africa. For example, he explained that AI is leading to more efficiency and greater transparency of pricing compared to traditional retail sales channels, which could improve consumer choice. 198 In Kenya, AI enabled the recent expansion of financial services and insurance to people who previously did not have access. 199 However, there are also potential risks emanating from AI platform design, including favoring certain market participants over others. 200 The panelists stressed the need for interdisciplinary collaboration among domestic and international agencies on research and policy development. Dipple-Johnstone emphasized that it is crucial that regulators keep up to date and work with others, within their own countries and internationally, as they face common issues. 201 Marcela Mattiuzzo, a partner at VMCA Advogados in Brazil, reported that Brazil’s CADE, together with agencies from other BRICS countries, is engaged in a broad study of the digital economy. 202 P a g e 27 The FTC’s Role in a Changing World: Staff Recommendations and Report [T]his was really a strong message for the government that was negotiating . . . on privacy that maybe there was a competitive issue, maybe privacy is good and [to] be protected, but beware of the way you do it. 203 –Isabelle de Silva, Autorité de la concurrence Isabelle de Silva, President and Member of the Board of the French competition agency, Autorité de la concurrence, reinforced the need for agencies to invest in understanding how data, artificial intelligence, and algorithms affect the competitive process. She described her agency’s use of sectoral inquiries, hearings and conferences, and joint studies with other agencies – including one on closed ecosystems with the UK Competition and Markets Authority and another on big data with Germany’s Bundeskartellamt – to enhance the Autorité’s understanding. 204 Echoing Mattiuzzo’s identification of the cross-cutting impact of AI, de Silva described a program developed in France that connects her agency with privacy, telecommunications, and media regulators to exchange knowledge and ideas about AI. 205 She pointed also to work in the OECD and ICN on digital issues. 206 In a separate joint research project with the German competition agency, the Autorité is researching whether algorithms could have an anticompetitive impact; the project examines questions of detection, enforcement, and the feasibility of an effects-based analysis. 207 Omer Tene, Vice President and Chief Knowledge Officer of the International Association of Privacy Professionals, Affiliate Scholar at Stanford University, and Senior Fellow at the Future of Privacy Forum, added an industry perspective to the discussion. He highlighted the challenges of regulating complex technology that even some AI creators cannot explain fully, calling this the “black box issue, the explainability, transparency problem.” 208 Tene also suggested that regulators need to start thinking about group privacy and not necessarily individual privacy – i.e., where groups are affected by certain health-related, financial, and other AI models or systems. 209 Panelists discussed areas of research that could aid in the understanding of the challenges and the opportunities presented by these new and emerging technologies. 210 Panelists turned to a discussion of the GDPR, with Dipple-Johnstone noting that while it helps move the law in the right direction, there are differences in interpretation among EU member states. 211 He called for “innovation with privacy, not innovation versus privacy,” and opined that “companies will want to develop these systems as will governments to help them make efficient use of their data sets and their technologies. But it’s how that’s done responsibly with accountability and transparency.” 212 The panel concluded with a discussion of cooperation and convergence in addressing AI. Dipple-Johnstone pointed to the work of the ICDPPC and their Declaration on Ethics and Data P a g e 28 The FTC’s Role in a Changing World: Staff Recommendations and Report Protection in AI as a move towards convergence. 213 He cautioned that cooperation, despite abundant goodwill, is a challenge and stressed the importance of cross-sector cooperation both within each country and internationally. 214 Kariuki noted a “convergence in the problems which are facing us,” namely discrimination, access to markets, information asymmetry for both consumers and competing firms, data privacy, and data portability. 215 Mattiuzzo outlined potential difficulties in attaining international convergence, or a policy that unites the many fields of law that are connected to AI, including antitrust, consumer protection, and privacy. She noted that Brazil adopted new data protection legislation in August 2018 that touches upon many AI issues. 216 She also noted that because much of the technology in question is used globally, laws addressing issues in one jurisdiction could affect market practices elsewhere, potentially contributing to greater convergence, and offered the example of convergence on procedural issues in the antitrust world as a possible starting point for AI. 217 De Silva praised FTC-EC cooperation on cases and proposed more coordination and sharing related to sectoral inquiries. She highlighted the participation of the business community and companies that adopted the GDPR. 218 Tene noted that companies seek uniform standards that can be adopted globally because multiple and potentially conflicting regulations across jurisdictions may require businesses to design multiple systems, frameworks, and products and “break the internet into a splinternet.” 219 He called for a joint effort to implement policy choices through “mapping data flows and doing risk assessments and imposing accountability requirements and data governance, so that new technologies are used not only to infringe on but also to protect privacy.” 220 P a g e 29 The FTC’s Role in a Changing World: Staff Recommendations and Report REMARKS BY COMMISSIONER NOAH PHILLIPS FTC Commissioner Noah Phillips opened day two of hearings on the FTC’s role in a changing world. He began by noting that the FTC’s international efforts – both antitrust and consumer protection – are critical not only to the agency’s success, but are “important to the United States and to the well-being of consumers around the globe.” 221 Commissioner Phillips explained that the FTC’s mission as a consumer protection, privacy, and antitrust agency has international ramifications. He cited the need to work with international partners to bring enforcement actions that end cross border scams, frauds, and other activities that harm consumers. 222 He expressed a desire to see the FTC continue to work towards the interoperability of data privacy regimes that support privacy and the benefits that consumers derive from international data flows. 223 On competition enforcement, he explained the need for close enforcement cooperation with foreign counterparts to share information and avoid impairing each other’s ability to vindicate domestic antitrust laws. 224 Given these ramifications, Commissioner Phillips emphasized the need to have strong tools that enable cooperation and coordination. Most notably, he stressed the importance of renewing and making permanent the U.S. SAFE WEB Act, a critical tool that the FTC uses to work with its international partners. 225 He noted the importance of active FTC participation in organizations like the OECD and the International Competition Network to engage in substantive discussions, share our experiences, and shape the development of international best practices. 226 Close enforcement cooperation and strong international relationships are integral to the FTC’s mission in a global economy. Commissioner Phillips explained that unwarranted inconsistencies in parallel enforcement actions could raise serious concerns and undermine shared global efforts to protect competition and consumers. 227 He cited procedural differences that can lead to due process concerns and divergent policies abroad that dilute promoting competition for other values like supporting national champions as potential impediments to sound enforcement, robust international commerce, and ultimately economic growth. 228 Contemplating the FTC’s dedication to and leadership in international consumer protection, privacy, and competition initiatives, Commissioner Phillips concluded, “[o]ur reputation as thoughtful, rigorous enforcers depends on our continued commitment to bring solid cases, following due process, and advocating domestically and globally.” 229 P a g e 30 The FTC’s Role in a Changing World: Staff Recommendations and Report SUMMARY OF PANEL 5: Implications of Different Legal Traditions and Regimes for International Cooperation In today’s interconnected world, enforcement agencies in different countries with diverse institutional and legal systems often confront similar issues, for example, in reviewing a global merger, dealing with trans-national-border fraud, or privacy rights involving data transferred across borders. This panel examined differences in domestic legal traditions and institutional design affecting competition, consumer protection, and data protection agencies, the implications of those differences for cooperation, and whether and how those differences may be narrowing. Panelists also offered recommendations for how the FTC could address some of these differences. In his introductory remarks, Roger Alford, Deputy Assistant Attorney General in the U.S. Department of Justice’s Antitrust Division, laid the foundation for the panel discussion by recognizing that it is important for effective international cooperation that agencies better understand the legal context in which their counterpart agencies operate. 230 He explained that differences in laws and procedures “can be noteworthy, and these differences also can have a real impact on decision-making by agencies in their respective systems.” 231 For example, Alford noted that agencies in administrative systems based on civil law often have greater discretion over the types of evidence considered. 232 He observed that while enforcement decisions in both systems are typically subject to court review, differences in agency burdens of proof and standards of review can lead to different dynamics in enforcement decisions. 233 In particular, he highlighted that civil law courts tended to be more deferential to administrative agencies, which “on the margins . . . tends to create a lower threshold for bringing enforcement actions.” 234 Despite these differences as well as others, Alford found that agencies regularly reach common ground on fundamental issues of antitrust enforcement. He closed with an example of successful international cooperation across different systems, identifying recent multilateral work on due process in competition law investigations as reflecting the growing consensus among competition agencies regarding the importance of due process protections and sound procedures. 235 There is nothing inherently wrong [with different legal systems and approaches], but recognizing these differences will help agencies in different systems better understand each other. Indeed, having different systems in place, which may at times reach different results, creates incentives for agencies to critically assess their own work. 236 –Roger Alford, U.S. Department of Justice P a g e 31 The FTC’s Role in a Changing World: Staff Recommendations and Report Panelists agreed that although agencies often pursue the same overarching goals, differences in legal regimes and structure can affect case and policy outcomes. 237 They recognized that understanding these differences and the impact they may have on process and outcomes can play an important role in facilitating interagency cooperation. 238 Panelists identified a range of sources for these differences. Some involve broad, fundamental differences in legal systems, such as whether a country has adopted a common or civil law system. 239 Constitutional provisions can also come into play. For example, Christopher Yoo, Professor at the University of Pennsylvania Law School, noted that constitutional variance may have contributed to differences in privacy protections in the United States and the European Union, as the latter’s right to be forgotten rules may not be consistent with the First Amendment to the U.S. Constitution. 240 Differences can also arise at a more granular level, such as whether agencies operate under a prosecutorial, inquisitorial, or administrative model. 241 Several speakers focused on how variations in evidentiary and procedural differences, often attributable to agency institutional design and rules, may affect case outcomes. Yoo contended that certain legal systems, including many administrative or inquisitorial systems, limit or preclude cross examination, the direct questioning of witnesses, and the submission of counter evidence, potentially hampering the target’s ability to present a full defense. 242 The fundamental differences that affect enforcement agencies are the institutional constraints in which they operate. 243 –Angela Zhang, University of Hong Kong and King’s College London Another source of difference may be rules governing the agencies themselves. For example, Angela Zhang, Associate Professor of Law at the University of Hong Kong and Senior Lecturer at King’s College London, described how the absence of procedural rules governing disclosures at a former Chinese competition agency resulted in few legal challenges to the agency’s enforcement. 244 The agency would engage in a strategic public-shaming campaign against target companies to pressure them to cooperate and quickly settle matters. 245 By contrast, in Europe, recent changes to agency procedural rules have increased opportunities for legal challenges to agency decisions. 246 Those modifications include greater defense rights as well as providing private parties with the ability to obtain judicial review of an EC decision to close a case. 247 As Yoo noted, though, the latter may have unintended consequences in terms of the sufficiency of proof in borderline cases. 248 Speakers agreed that the role of the courts and the standard of legal review affect agency outcomes and decision-making. 249 Several speakers posited that courts may be more deferential when reviewing decisions by administrative agencies – with the burden on the target to show that P a g e 32 The FTC’s Role in a Changing World: Staff Recommendations and Report the agency made an error of law or fact – than when adjudicating cases where the agency is the plaintiff and must directly prove its case in the first instance. 250 Differences in judicial tradition, including historical regard for state actors, may also contribute to the level of deference accorded to an agency’s actions. 251 Zhang cited research showing that judges from countries with an administrative law system influenced by the French model are more likely to decide competition cases in line with the EC than are judges from other countries. 252 Consistent with Zhang’s observation, Yoo described how variations in legal education may affect how lawyers and courts engage with different types of evidence, including economics. 253 In the United States, lawyers first pursue an undergraduate degree in any available subject before attending law school, but in most of the world, legal education is an undergraduate course of study. 254 As a result, Yoo believed that lawyers outside the United States may have less exposure to subjects other than law, potentially rendering them less comfortable with interdisciplinary thinking and more skeptical of non-legal concepts. 255 This may be exacerbated because in many countries lawyers become judges shortly after qualifying as a lawyer. 256 He attributed these differences to the reluctance of courts in some countries to grapple with economic concepts that have become central to modern competition analysis. 257 Participants also recognized that regulatory style and culture, which are often a product of the broader legal setting, can influence agency behavior and outcomes. For example, Francesca Bignami, Professor of Law at the George Washington Law School, explained that consumer protection policy in the United States has typically been made by enforcement-minded agencies or even through decisions in private legal disputes. 258 By contrast, consumer protection policy in many other economically advanced countries has historically resulted from a system that favored agreement between the parties, with agencies operating more like an ombudsman. 259 Rather than bring enforcement actions, those agencies focused on “compliance-oriented mediation” and resolving complaints. 260 These different approaches sometimes yielded disparate outcomes and may have hampered cooperation efforts. 261 Zhang noted that in China there is a culture favoring consensus within the government to ensure sign-off at the top. 262 She indicated that this culture often requires Chinese competition enforcers to consult with multiple agencies and stakeholders, which can allow non-competition factors to enter into the competition analysis. 263 Despite these many sources of potential divergence, participants generally agreed that differences have narrowed in recent years. One source of convergence has been the adoption by various competition and consumer protection agencies of a more enforcement-oriented approach. For example, Bignami observed that the trend toward agencies adopting similar strategic deterrence-oriented approaches along with greater reliance on independent enforcement agencies could facilitate greater cooperation and convergence. 264 She sees this trend developing in the area of data protection, in particular, as data protection agencies adopt more enforcement-minded approaches. 265 Philip Marsden, Professor of Law and Economics at the College of Europe, cautioned, however, that disparate enforcement approaches, especially regarding new P a g e 33 The FTC’s Role in a Changing World: Staff Recommendations and Report technologies, can be as relevant as differences in laws, and may lead to divergence. 266 Panelists also identified greater respect for due process and transparency as areas of increasing convergence. 267 Bignami provided an example of the French data protection authority, the CNIL, enhancing due process protections and opportunities for defendants so that it could effectively exercise new enforcement powers. 268 Courts, including in Europe, are also playing a significant role by adopting these reforms. 269 Despite recent improvement, Yoo emphasized the need to continue to encourage agencies to enhance their procedural due process rules. 270 Panelists placed a premium on agency transparency. Transparency not only leads to greater convergence but can also contribute to what Marsden described as “informed divergence” where the reasons for disparate outcomes, including whether those differences were the product of different legal systems and rules, would be understood. 271 Greater transparency would allow other agencies to study and emulate more successful models. 272 As Bignami commented, “one very productive way to engage with our foreign partners is to experiment . . . with different methods and different policy aims and different ways of accomplishing the very same goals.” 273 Panelists also offered several suggestions for the FTC. Zhang encouraged the FTC, when engaging with foreign agencies, to take more of a “bottom-up approach” in order to “really understand the institutional actors and their incentives” outside of its counterpart agencies (e.g., the courts). 274 Yoo urged the FTC to continue its important work both bilaterally and multilaterally to help agencies develop their technical capabilities and procedural practices through guidance and best practices. Regarding procedural protections, he recommended that the FTC target situations when a country is reforming its agency structure or evaluating its procedures, and suggested framing procedural reforms as broader issues of sound administrative law and good government rather than strictly competition and/or consumer protection concerns. 275 Marsden opined that the FTC could play a significant role in addressing substantive divergence. 276 To promote greater understanding and convergence, he urged the FTC to be bolder, to be even more transparent, and to use its range of tools, from market studies to enforcement, to help other agencies make educated decisions about how best to tackle policy and enforcement challenges in a fundamentally sound way. 277 P a g e 34 The FTC’s Role in a Changing World: Staff Recommendations and Report REMARKS BY COMMISSIONER CHRISTINE WILSON FTC Commissioner Christine Wilson provided a perspective on the evolution of international organizations and the benefits of international engagement. She noted that multilateral competition organizations play an important role in promoting sound policy approaches, and are important fora for the FTC to engage with counterpart agencies to discuss important issues. Commissioner Wilson identified several jurisdictions that are considering “whether and how to revise the antitrust laws, particularly as they apply to the digital economy.” 278 She pointed to calls for “big changes from wide-ranging structural and behavioral remedies to changes in the underlying goals of antitrust law.” 279 Referring to questions regarding whether to abandon the focus on consumer welfare in favor of considering additional policies, abandoning reliance on economic principles, and returning to mechanical rules to judge the legality of mergers, Commissioner Wilson rejected each of these proposals. 280 Commissioner Wilson emphasized that it is important to discuss these issues with international partners, and found that interactions with sister agencies, bilaterally and in multilateral organizations, have the benefit of focusing each agency’s analysis and “identify[ing] areas for collaboration, and, if appropriate, convergence.” 281 She noted the success of the International Competition Network and her confidence in the “ability of the international antitrust community, including the many bilateral relationships and multilateral institutions, to examine these important questions in a constructive way.” 282 Commissioner Wilson concluded by praising the FTC’s International Affairs Office’s international work on competition, consumer protection, and data privacy issues, including through its bilateral relations, its work in multilateral organizations, and its Technical Assistance and International Fellows programs. 283 P a g e 35 The FTC’s Role in a Changing World: Staff Recommendations and Report SUMMARY OF PANEL 6: Promoting Sound Policies for the Next Decade This panel focused on ways to develop coherent policies that protect consumers and promote competition while preserving the benefits of global commerce. Following introductory remarks by Commissioner Christine Wilson, panelists debated the advantages and disadvantages of soft law (e.g., best practices, guiding principles) versus hard law (e.g., laws and treaties) approaches, compared multinational and bilateral approaches, and discussed the role of technical assistance in policy development. Teresa Moreira, Head of the Competition and Consumer Policies Branch of the United Nations Conference on Trade and Development (UNCTAD), provided an international organization perspective on policy development. 284 She highlighted two UN documents, the United Nations Set of Competition Principles and Rules on Competition and the United Nations Guidelines for Consumer Protection. 285 Both instruments provide consensual, non-binding policy frameworks for developing economies and economies in transition and “underline the importance of cooperation, obviously at the international level but also at regional and bilateral level, and not only in the framework of formal international or regional organizations but also through informal networks across the world.” 286 Moreira emphasized that sound policies should “identify best practices and promote and lead to the exchange of information and experiences, fostering mutual learning . . . and promoting . . . convergence or organization.” 287 At its best, we believe soft law combines the expertise of stakeholders from around the world to define agreed principles and best practices . . . . [I]n today’s world where markets are increasing[ly] connected across borders and many countries face the same challenges, this is particularly important. 288 –Justin Macmullan, Consumers International The discussion then focused on the merits of soft versus hard law approaches to policy harmonization. Justin Macmullan, the Acting Co-Director General of Consumers International, highlighted the importance of soft law both for influencing global ideas and for providing a framework for national legislation and regulation. 289 Though some may fear soft law as leading to the “lowest common denominator,” Macmullan maintained that it retains its flexibility to “aim high” precisely because it’s not binding. 290 Moreira agreed that soft law can be “ambitious,” noting that soft law tends to highlight the most advanced jurisdictions’ “success stories.” 291 She said that guidelines at the UN and the Organization for Economic Cooperation and Development (OECD), and discussions at the World Trade Organization, contributed to the increase in competition laws from a dozen jurisdictions to over 130, including in developing countries. 292 P a g e 36 The FTC’s Role in a Changing World: Staff Recommendations and Report Macmullan said that for fast-changing issues emerging in the digital economy, soft law developed by international organizations can be an interim way to provide guidance while countries are developing more formal regulation. 293 Moreira added that soft law could also combine with hard law initiatives through bilateral and regional partnerships. 294 Macmullan noted, however, that it can be difficult to monitor and measure the impact of soft law. He also said that the “development of international soft law needs to stay ahead of the curve . . . to remain relevant, helping authorities and other actors to tackle new and emerging issues so that consumers do not have to deal with the risks themselves.” 295 Macmullan also identified challenges in the “ability to translate high-level international principles for national systems and real-world markets . . . particularly where resources are limited and frameworks and institutions are either new or haven’t been established.” 296 Still, he said that, in the consumer protection area, if “we were talking about hard law, then what we would achieve would be far less than the . . . high standards that we were aiming for.” 297 Professor Daniel J. Solove from George Washington University Law School echoed these themes in the context of privacy and data security policy. He noted the key role of the FTC, which turned what was “a rather toothless self-regulatory” soft law approach based on companies’ privacy promises into something that started to have “teeth” by challenging companies that broke their promises to protect the public’s personal information. 298 Solove observed that this was a hybrid approach in that companies still had leeway in deciding what they promised but that the FTC hardened this approach by enforcing privacy promises. 299 Solove nonetheless cautioned that soft law approaches had their limits. Contrasting the global leadership of the United States on privacy laws during the 1970’s and beyond with Congress’s “largely quiet” stance today, Solove observed that the rest of the world has “taken charge of privacy.” 300 He singled out the European Union’s General Data Protection Regulation (GDPR), a comprehensive privacy law with significant extraterritorial reach and severe penalties, as the “global standard” that is serving as a “model” for the rest of the world. 301 Solove observed that global companies now look to the European Union as their regulator and build their privacy programs to comply with the GDPR. 302 He pointed, nonetheless, to the FTC’s development of a “considerable body of jurisprudence” on privacy issues and data security through consent decrees and enforcement actions under Section 5 of the FTC Act, “which has the broadest jurisdiction of any type of law that we have to regulate privacy and security.” 303 Solove stated that “if the U.S. wants to take a leadership role . . . the FTC has to step up and has to play that role.” 304 John Pecman, former Commissioner of the Canadian Competition Bureau and now Senior Business Advisor at Fasken, highlighted the Bureau’s work with bilateral and multilateral soft law approaches to further international convergence. He cited bilateral approaches including the Bureau’s alignment of its merger review processes with those of the United States and the development of voluntary best practices with bilateral partners. He then addressed the Bureau’s P a g e 37 The FTC’s Role in a Changing World: Staff Recommendations and Report engagement in multilateral fora, such as International Consumer Protection and Enforcement Network (ICPEN), International Competition Network (ICN), and OECD, noting the Bureau’s ICN leadership to “promote a normative approach to economic analysis for determining anticompetitive harm.” 305 Pecman said that agencies had made “significant progress . . . through soft convergence” and raised some ideas for further improvements, such as creating a permanent ICN secretariat to aid compliance with international best practice standards. 306 He added, however, that “the dual drivers of globalization and the new digital economy in conjunction with populism have increased tensions . . . among competition agenc[ies] and the risk of divergent approaches to competition law.” 307 Asserting that “the time . . . is ripe for considering new approaches,” 308 Pecman identified a range of options and advocated for a Mutual Assistance Agreement that would permit the Canadian and U.S. antitrust agencies to share confidential information in non-criminal matters. 309 He cited tools such as the multilateral cooperation instruments used by International Organization of Securities Commissions (IOSCO) and the possibility of joint investigative teams. 310 He also noted more aggressive approaches such as the extraterritorial application of competition laws and use of international trade agreements. 311 Abbott “Tad” Lipsky, Adjunct Professor of Law at George Mason University’s Antonin Scalia Law School, stated that a broad variety of approaches would be needed to achieve the best economic outcomes for consumers globally. He noted that multilateral organizations like the OECD and the ICN are very helpful when the government or competition agencies have common interests, for example, in establishing professional connections, reducing the potential for conflict in decisions in cases, and supporting new competition agencies in adopting and enforcing effective competition law regimes. 312 In contrast, he asserted that multilateral organizations and binding multilateral agreements were not well suited to reducing the complexities of antitrust compliance for business, expunging protectionist laws, or assuring due process when the change needed for convergence to good practice is contrary to the interests of some governments and competition agencies. 313 Thus, he stated that “the world is not yet ready and possibly will never be ready for a binding global approach to competition law convergence.” 314 Instead, he advocated for developing solutions to some of the most complex questions of international antitrust policy by beginning with bilateral approaches, including through binding agreements. He suggested agreeing on “gold standard[s]” among like-minded agencies, and then “build[ing] out from there” as a way to encourage policy and process convergence. 315 With regard to the relative advantages of multilateral and bilateral approaches, Moreira noted the need for multinational frameworks to address global challenges but recognized that “like minded countries” can be more ambitious as they share similar standards and systems and have close trade and economic relationships. 316 Pablo Trevisán, a Commissioner of Argentina’s National Commission for the Defense of Competition, spoke to the advantages of both approaches. 317 He explained that Argentina “is rebuilding the [competition] house while living in it.” 318 He said that multilateral organizations like the OECD, ICN, and UNCTAD have helped his agency learn P a g e 38 The FTC’s Role in a Changing World: Staff Recommendations and Report and that bilateral cooperation has also been very important. 319 Trevisán identified a mix of components as necessary for effective competition law and policy – an independent authority, due process, and interaction between domestic competition, consumer protection, privacy, and sectoral authorities, as well as international authorities and multilateral organizations. 320 [Technical assistance] is extremely important because we, through these activities, are really able to promote sound policies . . . . [W]e advise on adopting and revising laws and on the strengthening of capacities and setting up of institutions to actually implement them . . . . The FTC has played a major role in both polic[y] fields in our technical assistance projects. 321 –Teresa Moreira, UNCTAD Finally, panelists turned to the benefits of technical assistance in developing and harmonizing policy approaches. Moreira noted that technical cooperation helps the United Nations promote sound policies and can promote convergence and build trust. 322 Trevisán noted that the U.S. agencies were the first to come to Argentina when it was rebuilding its competition agency, and had helped it shape its work, including through training and workshops. 323 Pecman observed that such programs require funding but that less formal arrangements through staff exchanges and visits can also deepen ties and help shape policy and procedures in the other jurisdiction. 324 He recommended more coordination to ensure that technical assistance providers avoid duplicating each other’s efforts. 325 Solove advocated for the United States to take more of a leading role in promoting its approaches to privacy, which in some instances are more workable than the GDPR. 326 He urged the United States “to plausibly step forward and present something on our behalf” about how the U.S. approach addresses many of the issues that are key to privacy and data security protection worldwide. 327 P a g e 39 The FTC’s Role in a Changing World: Staff Recommendations and Report SUMMARY OF PANEL 7: Effective International Engagement: Foreign Agency Perspectives This panel showcased the views of senior officials from foreign competition, consumer protection, and data protection authorities on international engagement. Speakers shared their experience regarding what has proven successful and areas for improvement, focusing on the interrelated elements of cooperation on individual cases, broader engagement, and technical assistance and capacity-building efforts. 328 Panelists agreed that both bilateral relationships and multilateral interactions among authorities are important to effective international engagement and cooperation. 329 They indicated that bilateral relationships can be facilitated in different ways – for example, agreements and MOUs are helpful to fostering bilateral relations and case cooperation, while technical assistance is valuable for developing relations with less experienced agencies and promoting convergence toward sound practice and policy. 330 Paula Farani de Azevedo Silveira, a Commissioner of Brazil’s Administrative Council for Economic Defense (CADE), noted that CADE benefited from technical assistance from experienced agencies, which helped CADE mature to the point that it is now able to provide assistance to less experienced agencies. 331 Stephen Wong, Commissioner of the Hong Kong Office of the Privacy Commissioner for Personal Data, also stated that informal, ad hoc bilateral arrangements and approaches can be useful. 332 The panelists agreed on the importance of multilateral engagement to facilitating cooperation, citing organizations such as the Organization for Economic Cooperation and Development (OECD), International Competition Network (ICN), and Global Privacy Enforcement Network (GPEN), as well as regional cooperation bodies such as Association of Southeast Asian Nations (ASEAN), the European Union, and the African Dialogue. 333 Panelists focused on the role of regional relationships in facilitating ties among agencies, including building relations necessary for case cooperation, general experience-sharing, and capacity building. 334 Han Li Toh, CEO and Commissioner of the Competition and Consumer Commission of Singapore, said that assistance from the ASEAN regional free trade agreement’s Competition Law Implementation Program, which is supported by Australia and New Zealand, has been extremely useful to his agency. 335 Some panelists noted benefits from ties between agencies in countries at a similar level of economic development. 336 For example, Azevedo cited the extensive interaction that has developed among competition enforcers in the BRICS countries in recent years. 337 Turning to how to effectuate successful international engagement, panelists praised the value of interagency staff contact in the context of both specific case cooperation and general experience sharing. 338 Regarding case cooperation, Rainer Wessely, of the Delegation of the European Union to the United States, noted that an agency’s staff must be able to identify cases with P a g e 40 The FTC’s Role in a Changing World: Staff Recommendations and Report international ramifications and then understand the cooperation process well enough to ensure that it is successfully carried out. 339 This requires adequate awareness, training, and support within an agency. 340 Panelists stressed the value of interactions among staff that are addressing similar industries or types of cases to discuss their experience. Examples of such engagement within the European Competition Network and the BRICS association were identified as fostering dialogue within these groups, which fed into broader multilateral engagement. 341 Panelists also highlighted how direct staff exchanges and placements can promote such interaction, enhance cooperation and convergence, and build agency capacity. 342 [W]hat really brings more knowledge to CADE is having the people that are working on the cases meet with the people that are working on cases in other jurisdictions. 343 –Paula Farani de Azevedo Silveira, CADE Panelists also consistently noted that their agency’s international engagement directly benefits domestic consumers and domestic priorities. 344 Chris Warner, Legal Director for the UK Competition and Markets Authority (CMA), explained that competition and consumer protection agencies “wouldn’t be doing [their] job properly . . . if we’re not thinking about international dimensions.” 345 Additionally, he noted that an agency’s domestic priorities often drive its international engagement because the areas of greatest domestic focus and experience are the very issues where agencies have the most to share with their sister agencies. 346 Panelists recognized that case cooperation is enhanced by greater interactions with sister agencies, including discussing common issues, sharing best practices, and learning from others’ experiences and thinking. This contributes to increased detection and enforcement – especially important in today’s highly integrated world and helps in other ways. For example, Azevedo explained that interaction with foreign counterparts had helped her agency make sound enforcement decisions that “minimize[d] . . . growing pains” that could have proven “very costly to the [Brazilian] economy.” 347 Both Toh and Tunde Irukera, Director General of Nigeria’s new Federal Competition and Consumer Protection Commission, stressed that the experience of foreign agencies with dual competition and consumer protection authority has been crucial to their agencies’ successful integration of additional legal and subject-matter authority. 348 Azevedo also provided a helpful example of using OECD peer review and international benchmarking to support domestic legislative changes. 349 While identifying the many benefits of international cooperation, panelists noted several challenges. These included obstacles to information sharing among agencies, often because of confidentiality, data protection, or data localization rules, as a challenge or impediment to effective enforcement cooperation. 350 They identified the potential for “second-generation” cooperation agreements to help overcome these issues and strengthen cooperation by allowing more detailed information and evidence sharing. 351 Wessely indicated that the European Union P a g e 41 The FTC’s Role in a Changing World: Staff Recommendations and Report was building on the success of its second-generation agreement with Switzerland by negotiating similar agreements with Japan and Canada. 352 Some agencies, including Hong Kong’s data protection agency, sometimes rely on ad hoc arrangements on specific cases to permit greater cooperation with counterpart agencies. 353 Panelists also observed that divergence in domestic laws, analytical approaches, and legal systems, as well as priorities, can make cooperation more difficult. 354 While there may be few short-term fixes for these issues, several panelists believed that differences could be minimized by focusing on the common harm resulting from the problematic behavior rather than, for example, differences in the definition of legal infringements. 355 Similarly, Warner noted that differences can sometimes be more readily overcome when addressed directly in the context of case cooperation rather than in the abstract. 356 Specifically, he cited European and international consumer protection agencies “sweeps,” where agencies work through the stages of a complicated case together, identifying common ground, potential differences, and solutions, as “fertile ground for working together and sharing knowledge and developing . . . new practices.” 357 [F]or the CMA, being a joint competition and consumer protection authority . . . when presented with a new difficult issue we naturally think about it from both sides of the coin. And I think it’s important that we try to replicate that on . . . [an] international dimension. 358 –Chris Warner, UK CMA Looking to the future, some panelists believed that more emphasis should be placed on examining issues from both the consumer protection and competition perspectives. They noted that this was especially relevant for digital economy issues, which often implicate both areas. 359 For example, Warner identified how the CMA recently presented a policy paper on personalized pricing to both the OECD’s consumer protection and competition committees and encouraged them to discuss it together. 360 When asked if there are improvements that the FTC might make to its international tools and program, the panelists commended the FTC for its leadership in international organizations and its engagement and cooperation with other agencies. 361 As Wessely noted, the FTC is seen as “the role model for international cooperation.” 362 In particular, panelists cited the FTC’s engagement and leadership in the ICN as well as the breadth of its technical assistance and capacity building programs. 363 Panelists offered several suggestions for future steps. Azevedo noted that Brazil had entered into a Mutual Legal Assistance Treaty (MLAT) with the United States covering detailed information sharing in criminal matters, but would benefit from a similar arrangement in the civil context. 364 Toh appreciated the FTC’s increased engagement in the ASEAN region, and looked forward to additional regional opportunities for partnership. 365 Irukera cautioned that agencies such as the P a g e 42 The FTC’s Role in a Changing World: Staff Recommendations and Report FTC should be careful not to substitute regional for bilateral engagement, stressing that both are important. 366 Warner suggested that agencies use their tools such as the CMA’s and FTC’s market studies powers, which can promote a broad understanding of markets and provide valuable insights that can contribute to the international discussion. 367 Finally, all panelists identified the importance of continued international engagement. P a g e 43 The FTC’s Role in a Changing World: Staff Recommendations and Report REMARKS BY JAMES RILL “We don’t know where we can go unless we know where we’ve been.” 368 James Rill, Senior Counsel at Baker Botts LLP and former Assistant Attorney General in charge of the U.S. Department of Justice Antitrust Division, set the stage for a lively panel discussion on the FTC’s role in a changing world by describing the many policy and substantive contributions of the FTC to the field of competition and consumer protection. He then identified challenges ahead of the FTC and other federal agencies in cooperation and enforcement, offering suggestions for both international and domestic cooperation. Rill lauded the work of the Commission in the International Competition Network (ICN) and the Organization for Economic Cooperation and Development (OECD) in developing a set of antitrust enforcement guidelines on policy, procedure, transparency, and engagement that “is a real contribution to international cooperation.” 369 He noted that the FTC and the DOJ played an active role negotiating competition chapters in proposed U.S. trade agreements such as the U.S.Mexico-Canada Agreement and the Korea-U.S. Free Trade Agreement. 370 Addressing the FTC’s Technical Assistance Program, Rill recalled its origins in the 1990s when the FTC and the DOJ conducted joint missions in newly emerging market systems in Central and Eastern Europe. 371 Rill strongly recommended the continuation of technical assistance programs and urged the FTC to consider more joint work with the DOJ that draws on the skills and expertise of both agencies. 372 Looking to the future, Rill called on the antitrust agencies to shift some of the current focus on procedure and “evangelize on substance.” 373 He urged the FTC to continue to promote sound consumer welfare-based antitrust principles through international organizations like the ICN and the OECD, its technical assistance program, and cooperative work with the DOJ and other U.S. government agencies. 374 [E]qually important [as international cooperation] in the international field is the issue of cooperation across the panoply of . . . Federal Government [agencies] that have a particular expertise and have much to offer in those areas that can affect and influence and promote sound antitrust enforcement. 375 –James Rill, Baker Botts LLP In the ICN and the OECD, Rill urged the FTC to put more “gravitas” behind guidance documents by converting them into best practice documents. 376 He suggested that the antitrust community seriously consider measuring whether agencies are following existing guidance and (future) best practices. 377 Rill envisages a role for the FTC in working with other agencies to P a g e 44 The FTC’s Role in a Changing World: Staff Recommendations and Report develop a system for measuring accountability and adherence to guidance and best practices documents, such as the ICN’s due process recommendations, through a system that relies on the power of reputational effect rather than on sanctions. 378 Rill suggested that another way to promote the consumer welfare model and address anticompetitive practices by state-owned enterprises (SOEs) and resurgent support for national champions would be for the FTC and the DOJ to work to form an ICN working group that focuses on SOEs and state-supported enterprises. 379 Turning to international cooperation issues, Rill identified the 2017 FTC-DOJ Antitrust Guidelines for International Enforcement and Cooperation as providing a basis for the agencies to engage in general discussions of a matter with a foreign authority that has an open investigation, even if the agencies do not. 380 Rill described domestic cooperation as “a challenge and something that’s vitally needed in the 21st Century,” for example where the FTC and the DOJ work with non-antitrust agencies of the U.S. government. 381 Acknowledging the possible reservations based on his experience working with the Office of the U.S. Trade Representative, he suggested that the U.S. antitrust agencies can learn from other U.S. agencies’ industry expertise and insight into matters of, for example, national security. 382 While Rill did not support creating a cabinet-level committee for antitrust policy proposed in a Chamber of Commerce report, he stated that, “[w]hatever decisions are being made on antitrust, [the agencies] should have a seat at the table to explore . . . the antitrust implications of industry decisions being made at another level,” citing the expertise that the Commission brings to these discussions. 383 P a g e 45 The FTC’s Role in a Changing World: Staff Recommendations and Report SUMMARY OF PANEL 8: The FTC’s Role in a Changing World The discussions held during this concluding panel centered on core aspects of the FTC’s role in a changing world. Panelists focused in on four central questions: • What makes an effective competition, consumer protection, and/or data privacy agency? • How can the FTC be most effective in its bilateral relationships and cooperation? • What should be the FTC’s role in promoting sound policies and convergence? • What is the role of the FTC as a leader in thought and action? Panelists identified independence, transparency, and accountability as the key characteristics of effective agencies. They also stressed the importance of technical skills and efficient agency design. 384 [T]o be . . . effective, regulators need to step up and be strategic, prioritize their engagement, thought leadership, [and] actions versus potential enforcement, and be very transparent in how they conduct their regulatory policy. 385 –Bojana Bellamy, Centre for Information Policy Leadership Rod Sims, Chair of the Australian Competition and Consumer Commission (ACCC), characterized an effective agency as one that is both a strong enforcer and a strong advocate. He urged agencies to publicize their enforcement, market studies, and advocacy on behalf of consumers. 386 Bojana Bellamy, President of Hunton Andrews Kurth LLP’s Centre for Information Policy Leadership, suggested that in the “fourth Industrial Revolution,” effective privacy agencies must be “technically strong” and consider “innovative regulatory policy.” 387 She explained that because there “hasn’t been anyone else who has ever regulated data . . . ,” agencies may need to “reinvent” themselves. 388 She opined that regulators should favor “constructive engagement over enforcement,” reserving enforcement actions for companies that “deliberately, repeatedly keep breaking the rules . . . .” 389 Bellamy also suggested exploring mechanisms like “regulatory sandbox[es],” which some foreign agencies, such as the UK Information Commissioner’s Office, are using to design products and services that comply with regulation while keeping up with the fast pace of innovation. 390 Eduardo Pérez Motta, Senior Partner of SAI Law and Economics, former President of the Mexican Federal Competition Commission, and former Chair of the International Competition P a g e 46 The FTC’s Role in a Changing World: Staff Recommendations and Report Network, echoed Bellamy’s call for efficiency and transparency. He outlined five elements of an effective, well-designed competition agency starting with the need for independence from interference from other government actors. Pérez Motta also pointed to neutrality – i.e., the perception that the agency is unbiased, technical strength, including conformance with international best practices, efficiency, and transparency. 391 Panelists also stressed that effective agencies would increasingly need to leverage synergies in the digital economy. Because “data now cuts through almost every area,” panelists stressed that competition and consumer protection authorities should reach out not only to each other, but also to departments and agencies within their own governments, in order to learn from one another. 392 Andrew Wyckoff, Director of the Organization for Economic Cooperation and Development (OECD) Directorate for Science, Technology, and Innovation, referenced the OECD’s work on the “digital transformation” of the economy and recommended that competition and consumer protection authorities begin working with other government departments that “have a lot of data and don’t necessarily understand . . . the marketplace as an FTC would.” 393 The discussion turned to ideas for enhanced cooperation. These included multilateral enforcement arrangements like the IOSCO MMOU in the securities area and bilateral arrangements like the U.S.-Australia mutual assistance agreement, which provides for confidential information sharing and investigative assistance using domestic tools. 394 Another idea offered by Wyckoff was better implementation of existing principles, as recommended by the OECD’s recent review of the 2003 Council Recommendation on cross-border cooperat [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3Aa56a276e32e18f32. Public record. Not legal advice.