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December 04, 2012

Senate Commerce Committee Hearing on Joshua Wright to be FTC Commissioner

Posted in: Uncategorized

Joshua Wright

FTC Commissioner Nominee Joshua Wright

The Senate Committee on Commerce, Science and Transportation will hold confirmation hearings today, including Joshua Wright to be a commissioner on the Federal Trade Commission.

The hearing begins at 2:30 and will also include nominees to the Departments of Commerce and Transportation, and the FCC.

Wright is a Republican who is set to replace J. Thomas Rosch as FTC Commissioner, whose term expired in September of this year (though it is customary for Commissioners to remain on the board until a replacement has been confirmed).  Wright was officially recommended for the position by Mitch McConnell, but he’s considered to be the protege of former FTC Commissioner Timothy Muris, who like Wright is also a professor at George Mason University.

Unlike Muris, however, Wright is considered a bit of a lightweight who was nominated due to his opposition to any investigation into Google antitrust activities.

From Politico Pro (paywall):

“I think Wright is a real priority for Republicans because he will just be a huge boon to conservative, libertarian free market, laissez faire ideas on the FTC,” said one Senate GOP aide.

Earlier this week Wright weirdly took the position that he will exempt himself from all Google decisions for the next two year.  Given that investigating Google for privacy and antitrust breeches has been an all-consuming task for the FTC of late, one wonders what he plans to do to amuse himself during that time.  Without his vote, a 4 member commission could also gridlock 2-2 over issues relating to Google

I certainly hope someone asks him about the recent decision that allowed Google to retain the personal data it stole from up to 190 million users in the Safari hack, (which Rosch said was never the intention of the commissioners).  Rosch has been the sole voice of dissent when the FTC allowed both Facebook and Google to deny liability in their recent settlements over egregious privacy violation.

If Wright is confirmed (which seems likely, given his support from both President Obama and GOP leadership) the FTC will become significantly less privacy-oriented and even more toadyish to the corporate tech monoliths.

Liveblog (all times PM ET):

2:40:  Kay Bailey Hutchison says they will be considering Wright’s nomination today, says he is an economist and if confirmed he would be the only one on the Commission. (Committee members all give tributes to Hutchison, who is leaving the Senate.)

2:48:  John Kerry says that Rockefeller will be marking up nominees next week, so if the members have any questions, they should submit them in the next 24 hours.

2:51:  Polly Ellen Trottenberg gives her statement as nominee for Under Secretary of Transportation for Policy in the Department of Transportation.

2:55: Dr. Mark Doms gives his statement as nominee for Under Secretary of Commerce for Economic Affairs in the Department of Commerce

2:58:  Mignon Clyburn gives her statement as nominee to be a Commissioner of the Federal Communications Commission (reappointment)

3:05: Dr. Joshua D. Wright gives his statement as nominee to be a Commissioner of the Federal Trade Commission.

Profoundly respect the Federal Trade Commission.  His experience began as a 20 year old intern at the FTC in the bureau of economics.   Was a technology scholar in residence there in 2007.
He takes seriously the Commission’s role to protect consumers from unfair acts and practices

Commission faces many challenges:

  1. Continuing its vigilant enforcement of consumer protection laws, such as those against deceptive mortgage practices
  2. Implementing consumer protection and competition laws in high tech environments
  3. Analyzing mergers to protect consumers and competition
  4. Playing a leading role in the world consumer protection community

3:12: Boxer has a beef with Wright:  You wrote the CPFB’s agenda is “aggressive and dangerous, and its existence likely to do more harm than good to consumers.”  You want to explain why you think it’s dangerous and aggressive?

3:13:  Wright:  That was an early version.  Those comments were not about existing agencies.

3:14:  Boxer:  You also wrote comments which seem to indicate you doubt the FTC’s mission.  Why would you want to be a commissioner?

3:15: Wright:  first, I believe fundamentally in the FTC’s mission to protect consumers.  That particular article was about a highly contentious use of Section 5 in antitrust cases.  That paper was an attempt to inject one empirical view — about how the unfair use of methods of competition authority was used in specific court cases.

3:17 :  Boxer – you didn’t answer my question.  But I also understand that you’re recusing yourself from decisions relating to certain corporations who have funded your work.

3:18:  Wright:  Corporate funding of my consulting or research grants has been disclosed to the committee.  I have recused myself from law enforcement matters pertaining to Google, and also I will consult with the legal ethics officials and recuse myself when necessary in the future.

3:19:  Boxer: I’d like for you to do it now, not then.  Can you sit with them now and discuss your corporate conflicts of interest?  And BTW, Chuck Schumer is here.

3:20 Schumer:  I wanted to tell one brief story (that’ll be a first — jh).  Schumer tells a story regarding Trottenberg.

3:25:  Hutchison asks Clyburn about the “overreach” of net neutrality.

3:26:  Clyburn:  We’ll follow the law to the letter and welcome any guidance from the committee.  Will not say whether she would reclassify it as title II if court strikes down Open Internet order (Eggerton).

(John Eggerton also following the hearing on Twitter)

3:39:  Lautenberg: You’re concerned about “excessive regulation.”  How do you protect the consumer without rules?  Please clear the air for me.

3:40:  Wright:  I do believe in rules and regulations.  I also believe that markets are powerful tools that operate for consumers.  In my academic writing I have taken positions in the competition space for greater regulation in cases involving price fixes.  My concern is not about overregulation, but about consumer welfare, and how regulation serves their interests.

He is not coming off as a particularly sharp or astute thinker.

3:42: Cantwell:  re, your recusal comments:  the FTC can move at a glacial pace.  While you say you would recuse yourself for 2 years, in 2 years there are still things that could be before the FTC.  Could you clarify

3:43:  Wright:  The two year recusal comes from the President’s ethics pledge.  If it happens beyond that period, I’d go to the ethics expert board and I would recuse myself.  [He does not answer her question in any way.]

3:44:  Cantwell: I’m not going to leave it up to trusting you with the FTC, so I’d like a written answer to that question.  So if someone has paid you financially for work you have done, will you recuse yourself?

3:45:  Wright: I will recuse myself, as in the case of Google for 2 years.

3:45:  Cantwell:  We’ve given the FTC the ability to regulate oil market manipulation.  Are you solidly behind the use of that statute?

3:46:  Wright: This is outside my area of expertise.  I believe that protecting consumers in oil and gas markets is very important.  I can commit to you that where there are violations of the rule I will enforce the law.  I do not know and am not privy to the investigation that is underway, or why there is disparity in the activity level.  I commit to you that if I was confirmed I’d talk to the staff to determine why there is a disparity. (Another muddled non-answer.)

3:48:  Cantwell:  My time is up, but I won’t support the nomination of anyone who will not support the implementation of the new rule.

3:54:  Boxer:  Back to Dr. Wright.  This is an easier one for you.  This past October, California retail gas prices spiked to $4.67 per gallon and the refineries had an easy explanation: we’ve had fires, disruption, etc.  Everyone believed it til a private firm studied it and said there was no disruption in production.  So I called upon the FTC to investigate the spike.  We rely on the FTC to look into these things, because California has really been socked by these spikes.  So what should the FTC do if the shortage was never really there, but rather was manipulated?

3:56:  I’m from California and I care a lot about consumers.  (Really?)  The FTC has a lot of tools under its authority.

3:56:  Boxer presses him: “would you look at distortion?” after he attempts to dodge it.  Interrupts him and asks again when he says he’s “talk to the staff.”  “Would you investigate it?”

She moves on to another Rockefeller questions:  how do you feel about Do Not Track? Should consumers have the right to request companies not track them?

3:58:  Wright: Yes.

3:58:  Boxer — what do you think about the FTC’s do not track recommendations?  Finally asks him for a written response.

3:59:  Boxer on behalf of Rockefeller:  Since the financial collapse, numerous agencies have brought cases against mortgage industry for deceptive practices.  In your writings, you take the position that “foreclosures did not present a consumer protection issue.” You say that while there was undoubtedly fraud by both consumers and lenders, most of the problem was with ‘systematic irrationality.’  Given your views, how can we trust you to be a commissioner that guards the interests of consumers if you think it’s their fault?

4:00:  Wright:  I also said in that article I think it was a problem of not enforcing regulations.  I also support laws that protect consumers and assure you that if I’m confirmed I will continue to support their enforcement.

4:05:  Hutchison: I sure hope that if there was a hearing on Keystone XL pipeline it would be approved.  We’ve got to have more oil.  (Not sure what this has to do with the FTC).  Also wants to know about the census — do you believe the method used in 2010 was valid?

4:06:  Wright: Research shows the 2010 census was the most accurate ever done.  But for 2020, we realize the cost has to be tempered.

4:09:  Ayotte:  If there are undefined powers under Section 5, how should the FTC approach the scope of it so as to provide market confidence?

4:09:  Wright:  I share your concern.  I am afraid my answer won’t provide anything definitive.  One area it would apply to, is in the use of invitations to collude.  It would be good to have a policy statement to provide clarity.  If confirmed I’d have to learn more about the agency’s role in such processes.

4:14:  Boxer: Not sure what Hutchison was talking about –  she wants more drilling for oil, we don’t necessarily disagree.  The issue for the FTC is the potential collusion to say there was a shortage of product when there wasn’t, to drive up prices.

Thanks everyone.   “We stand adjourned.”

All in all, Wright’s answers were pretty evasive, which is certainly nothing new for a nominee playing “split the baby” during confirmation hearings.  Most telling, however, was his non-answer to Maria Cantwell over whether he’d still be reusing himself from Google matters in 2 years that are being investigated now, given the glacial pace of the commission. It served no purpose to be evasive if he didn’t plan on voting on those matters two years hence.


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