Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC urged to resist overregulation of “sharing economy”, (Aug 6, 2015)

By Lynn Stanton,TR Daily

A tech trade association and a Republican presidential candidate have urged the FTC to resist overregulation of the “sharing economy,” which includes peer-to-peer business platforms such as Uber for car services and Airbnb for lodging services, both in its own data privacy efforts and in its advocacy before state and local governments.

Parties were adding to the FTC’s record in the wake of a June workshop on the competition, consumer protection, and economic issues raised by the sharing economy, and the appropriate regulatory approach meeting goals such as protecting consumers without restraining competition or hindering innovation. August 4 was the deadline for filing post-workshop comments.

The Consumer Electronics Association (CEA) stated that the sharing economy presents consumers with “greater choice, flexibility, productivity, and lower prices,” but that “[t]hese benefits will be stifled if regulators favor incumbents with anticompetitive laws.” It urged the FTC to advocate against state and local “proposals that attempt to raise barriers to sharing economy companies, sometimes to the point that they would be excluded from a market entirely.”

CEA also spoke against new data privacy and security regulations aimed at sharing economy platforms, saying that the FTC should rely on its authority under section 5 of the FTC Act to “initiate case-by-case enforcement proceedings against companies that have committed unfair or deceptive acts or practices.”

“If new regulations become necessary, regulators should favor technology-neutral and use-based solutions that focus squarely on alleviating tangible, demonstrated consumer harms,” CEA added.

Sen. Ted Cruz (R., Texas) noted in his filing that in his pre-congressional life that included time as an FTC staffer, he led public workshops “exploring possible anticompetitive efforts to restrict competition on the Internet.” This summer’s workshop “highlighted that an old pattern may be repeating itself in a number of states and municipalities,” he said. “Over and over again, government is sought out as an ally of incumbent businesses to restrict competition from new entrants. In a number of instances, and in a number of states, pre-existing regulatory regimes have been extended to new entrants in ways that may ultimately deprive consumers of significant cost savings and convenience that would otherwise accompany an expanded sharing economy.”

Sen. Cruz compared early 20th century effort by horseshoe and hay trade associations to bar on-street parking by automobiles and more recent efforts by brick-and-mortar retailers to restrict online sales of wine and other products to current efforts to provide commercial registration of Uber and Lyft drivers. He urged the FTC to “reject requests from incumbent businesses or Members of Congress interested in applying additional requirements on the sharing economy” and to “continue to promote competition within the sharing economy …. by continuing to file competition advocacy comments on behalf of sharing economy businesses facing anticompetitive regulations and business practices that could impede commerce and impose unnecessary costs on consumers.”

News: Antitrust ConsumerProtection Privacy FederalTradeCommissionNews