Rules Needed to Define Unfair Practices
Google, Facebook and Twitter have much in common. All three web-based service firms have pioneered or reinvented their primary area of expertise. All three companies are American businesses that have changed how the world uses the internet. All three companies act as platforms bringing together different sets of users. Of particular note, all three companies provide their primary services to consumers for free.
Also of note, all three firms are reported to be either under FTC investigation (Google and Twitter) or the subject of a petition to the FTC to be investigated (Facebook).
The Center for Regulatory Effectiveness (CRE), a regulatory watchdog, has petitioned the Federal Trade Commission to initiate a public process establishing a “trade regulation” for web-based services. Through the rulemaking, the FTC would clearly define acts or practices which they consider unacceptable.
Any regulation would need to comply with the statutory limitation on the Commission’s authority. By law, the FTC has authority to ban only acts or practices that cause or are likely to cause “substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.”
In the absence of a rule for web-based services, the agency would lack a sound intellectual and legal framework for its work, creating the perception that the agency was interpreting ambiguous rules to obtain a preconceived solution.
A copy of the CRE petition is available at http://thecre.com/pdf/CRE-FTC%20Petition.pdf
About CRE http://www.thecre.com/about.html
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