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FTC wants beefed-up powers against Net scammers

Government officials say existing law hinders international crackdowns and the ability to slap fines on wrongdoers.

WASHINGTON--Past and present Federal Trade Commission officials on Monday renewed their call for Congress to expand the agency's international Internet policing powers and its ability to slap fines on wrongdoers.

The suggestions came at a conference here organized by the Center for American Progress, which bills itself as a nonpartisan research institute that "challenges conservative thinking." The organization set up the event to outline issues expected to emerge at a four-day, FTC-sponsored series of hearings about the Internet and consumer protection this fall.

Those mostly public hearings, planned for Nov. 6 to 9, have been described as the first major endeavor of the sort by the FTC since 1996. However, the agency has held about 40 workshops and conferences on consumer protection issues since that date.

Much of the focus of the hearings will be on devising ways to combat a host of unanticipated menaces--most notably, spam, spyware and phishing schemes--that have emerged in the last decade, said Eileen Harrington, deputy director of the FTC's Bureau of Consumer Protection. Part of that work must occur on Capitol Hill, where politicians must adopt new legislation "to give us much-needed tools to do our jobs," particularly when investigating alleged violations that cross American borders, she said.

The federal regulators' push for authority on the international front is nothing new. In 2003, the FTC lobbied Congress for powers that would, among other things, allow them to serve secret requests for subscriber information on Internet service providers, peruse FBI criminal databases, and swap sensitive information with foreign law enforcement agencies.

"We have got to be able to work with our sister agencies in other countries...but an anomaly in the law prevents us from sharing confidential information with them," FTC Commissioner Jon Leibowitz said during an afternoon panel discussion. He pointed to unattributed statistics stating that 40 percent of spyware and 70 percent of spam originate outside the United States.

The U.S. Senate in March unanimously approved a bill called the Undertaking Spam, Spyware and Fraud Enforcement Beyond Borders Act of 2005, nicknamed the U.S. Safe Web Act. Leibowitz urged the House of Representatives, which has not yet weighed in, to adopt the legislation as well.

The approved Senate bill would allow the FTC and parallel foreign law enforcement agencies to share information while investigating allegations of "unfair and deceptive practices" that involve foreign commerce but could cause harm to people on U.S. soil. It was endorsed at Monday's event by the National Consumers League, the Center for Democracy and Technology, and a Microsoft representative. But the bill has drawn criticism from some privacy advocates because the FTC would not be required to make public any of the information it obtained through foreign sources.

The agency also needs broader enforcement powers on the domestic front, such as the ability to levy monetary penalties on those found to commit unfair and deceptive practices. Right now, the FTC's ability to fine wrongdoers is too limited, the commissioners in attendance said.

"Today, we see kids in their parents' basements who are being hired as affiliates for folks who want to engage in these practices (such as spyware, phishing and spamming)," said FTC Commissioner J. Thomas Rosch, who led the agency's consumer protection bureau during the 1970s. "A commission action against them without civil penalties is a little like telling those folks to go to their room and take a time-out."