Leibowitz to be named FTC chairman: Move could bring increased scrutiny to mobile space

An administration official confirmed that President Obama will name Federal Trade Commission member Jon Leibowitz as chairman of the agency. The expected appointment comes amid increased government scrutiny over mobile marketing practices in a wireless industry with an evolving business model fueled by customized content delivery.
Leibowitz, appointed to the FTC in fall 2004 and former chief counsel for the Senate antitrust subcommittee on terrorism and technology in the mid-1990s, is well versed in emerging issues in the wireless and high-tech sectors.
In an FTC town hall meeting last May, Leibowitz observed that novel issues are surfacing in the mobile market – offering new opportunities and consumer protection challenges alike – regarding how consumers interact with businesses and how businesses reach out to consumers.
“In an era of broadband and information services, the FTC is watching closely,” Leibowitz said at the time. “We strongly believe in self-regulation, but we are also going to police the wireless space.”
More recently, when the FTC issued revised guidelines on steps broadband service providers should take protect consumers’ privacy in behavioral advertising, Leibowitz seemed to take a stronger line in suggesting that the days of industry self-regulation could be numbered if companies fail to do a better job managing the collection and use of consumer information.
“Industry needs to do a better job of meaningful, rigorous self-regulation or it will certainly invite legislation by Congress and a more regulatory approach by our commission,” said Leibowitz in a concurring statement. “Put simply, this could be the last clear chance to show that self-regulation can – and will – effectively protect consumers’ privacy in a dynamic online marketplace.”
Leibowitz said government regulators have to get a better grip on the practice of combining online and offline data to construct detailed consumer profiles and on the use of online tracking data for applications other than behavioral advertising. “Industry’s silence in response to FTC staff’s request for information about secondary uses of tracking data is deafening,” Leibowitz stated. “As a result, the commission may have to consider using its subpoena authority under Section 6(b) of the FTC Act to compel companies to produce it.”
Jeff Chester, head of the Center for Digital Democracy, saidthe FTC report – issued under Republican FTC Chairman William Kovacic – did not represent where the Obama administration could be headed on behavioral advertising and predicted Leibowitz will take an active approach to government oversight.
“Leibowitz will help transform what has been a largely anemic regulatory watchdog during the Bush years into an agency that sees its first priority as consumer protection,” Chester said. “We expect significant FTC action on financial and health-related consumer issues. There will also be a more critical eye cast with mergers. Public interest groups such as mine appreciate that Leibowitz has called for tougher online privacy safeguards, including for mobile marketing.”
The CDD and the U.S. Public Interest Research Group recently filed a complaint at the FTC calling for an inquiry and injunctive relief concerning unfair and deceptive mobile marketing practices.
The Mobile Marketing Association said its voluntary code of conduct is far more stringent than even the revised FTC principles governing online behavioral advertising.
While the FTC can intervene when consumer protection problems arise in wireless and other telecom sectors, the agency does not analyze mergers in those industries. That responsibility is shared by the Department of Justice and the Federal Communications Commission.