FTC chief warns against 'unnecessary' Net rules

Deborah Platt Majoras says consumer voices, market forces, existing laws are often good enough to remedy problems.

WASHINGTON--The head of the Federal Trade Commission on Monday voiced reluctance toward adopting consumer protection laws that target technological concerns du jour, saying the "collective voice" of consumers often prompts change.

Deborah Platt Majoras, the agency's Republican chairman, said she prefers relying on a combination of existing laws, vigorous competition and user pressure to address complaints about new products or potentially worrisome uses of technology.

Deborah Majoras Deborah Platt Majoras

For proof, look no further than a situation in September in which hundreds of thousands of people who use the popular social-networking site Facebook rebelled against a that some charged was Big Brother-esque, Majoras said. Within days, the site's by giving people the option of turning off the "minifeed," which shows people whenever someone in their network makes a change to their relationship status, favorite music or other profile information.

"On the Internet, consumers appear to reign supreme, and they can be very powerful and tough customers," Majoras told an audience of about 300 people in a morning speech here that kicked off a series of public hearings hosted by the FTC.

Dubbed "Protecting Consumers in the Next Tech-ade," the three-day event is billed by the agency as a counterpart to global consumer-protection hearings held in 1995. This week's lineup is scheduled to include panelists predicting how topics like communication, social networking, advertising, computing power and security will change over the next 10 years.

Despite the vast differences in technology use between 1995 and today, existing laws that cover "unfair and deceptive practices" have proven elastic enough in many cases for Internet Age adaptations, Majoras said in her opening remarks.

Ten years ago, "we weren't even talking about spyware as a potential problem. But when it emerged, we determined we needed no new law or regulation to begin combating the scourge," she said.

Majoras said the FTC would nonetheless "continue to vigorously enforce all the laws at our disposal," such as the Can-Spam Act of 2003, which critics charge has done little to curb the rise of unsolicited e-mail.

The FTC chief on Monday stayed away from an issue that advocates have flagged as a major consumer protection issue this year: Net neutrality, the idea that network operators such as Verizon Communications and AT&T must be prohibited from charging Internet content providers premium prices for speedier delivery.

Whether new regulations are necessary to prevent what Net neutrality proponents refer to as an Internet "fast lane" has generated a significant split. Network operators and hardware manufacturers generally reject the need for new laws, while Internet companies such as Google and Yahoo, as well as consumer groups, have been lobbying for their passage.

But Majoras said during an August speech that she didn't see the need for new regulations because there has been no demonstrated harm to consumers, that normal market forces will likely prevent any problems, and that new laws will cause more problems than they solve.

The FTC is currently undertaking a study on Net neutrality and plans to issue policy recommendations. That step was lauded by FTC Commissioner Jon Leibowitz, a Democrat, when he took the stage later Monday morning.

"Will carriers block, slow or interfere with applications?" Leibowitz asked. "If so, will consumers be told about this before they sign up? In my mind, failure to disclose these procedures would be...unfair and deceptive."

Unlike Majoras, Leibowitz said there's still room for Congress to act in at least one realm--specifically, to devise a "consensus antispyware law."

Right now, federal regulators may only require spyware purveyors found to violate consumer protection laws to hand over ill-gotten profits--as they did in a settlement announced Friday with adware manufacturer Zango. Congress needs to grant the FTC the power to levy fines on top of that, creating an added deterrent, Leibowitz said.

The "Tech-ade" hearings continue through Wednesday in George Washington University's Lisner Auditorium and via Webcast. A private session for law enforcement and government officials is slated for Thursday.

CNET News.com's Declan McCullagh contributed to this report.

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