FTC and FCC Outline Memorandum of Understanding to Coordinate Online Consumer Protection Following Adoption of the FCC’s Restoring Internet Freedom Order

Yesterday, the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) announced their intent to coordinate which of the two agencies would coordinate online consumer protection efforts following the adoption of the Restore Internet Freedom Order, and published a draft Memorandum of Understanding (MOU) that outlines those efforts.

The draft MOU outlines a number of ways in which the FCC and FTC will coordinate and collaborate, including:

• The FCC will review informal complaints concerning the compliance of Internet service providers (ISPs) with the disclosure obligations set forth in the new transparency rule. Those obligations include publicly providing information concerning an ISP’s practices with respect to blocking, throttling, paid prioritization, and congestion management. Should an ISP fail to make the required disclosures—either in whole or in part—the FCC will take enforcement action.
• The FTC will investigate and take enforcement action as appropriate against ISPs concerning the accuracy of those disclosures, as well as other deceptive or unfair acts or practices involving their broadband services.
• The FCC and the FTC will broadly share legal and technical expertise, including the secure sharing of informal complaints regarding the subject matter of the Restoring Internet Freedom Order. The two agencies also will collaborate on consumer and industry outreach and education.

The FCC is expected to vote on the order at its December 14 meeting. This order would reverse the 2015 “net neutrality” order reclassifying broadband Internet access service as a Title II common carrier service.  According to the FTC’s press release, one of the impacts of this reclassification was to “strip the FTC of its authority to protect consumers and promote competition with respect to Internet service providers because the FTC does not have jurisdiction over common carrier activities.”  By reversing the order, the FCC would return jurisdiction to the FTC to policy the conduct of ISPs with respect to their disclosures and privacy practices.  Once adopted, the order would require broadband Internet access service providers to disclose their network management practices, performance, and commercial terms of services.  The FTC could then police their implementation of those practices under the “unfair and deceptive practices” requirement under Section 5 of the FTC Act.

In response to the MOU, FCC Chairman Ajit Pai stated that the MOU “will be a critical benefit for online consumers because it outlines the robust process by which the FCC and FTC will safeguard the public interest. …  This approach protected a free and open Internet for many years prior to the FCC’s 2015 Title II Order and it will once again following the adoption of the Restoring Internet Freedom Order.”  Acting FTC Chairman, Maureen K. Ohlhausen, stated that “[t]he FTC is committed to ensuring that Internet service providers live up to the promises they make to consumers .. [and that] [t]he MOU we are developing with the FCC, in addition to the decades of FTC law enforcement experience in this area, will help us carry out this important work.”

FCC Commissioner Mignon Clyburn, who opposes the proposed order, released the following statement:  “The agreement announced today between the FCC and FTC is a confusing, lackluster,  reactionary afterthought: an attempt to paper over weaknesses in the Chairman’s draft proposal repealing the FCC’s 2015 net neutrality rules.  Two years ago, the FCC signed a much broader pro-consumer agreement with the FTC that already covers this issue. There is no reason to do this again other than as a smoke and mirrors PR stunt, distracting from the FCC’s planned destruction of net neutrality protections later this week.”

To view the MOU, click here.