FTC’s new Office of Technology will help clean up technology ‘seeping with snake oil’ businessupdates.org

by Ana Lopez

The FTC is embracing change with the establishment of a technical office (OT) that allows it to effectively regulate the rapidly changing world of tech. Citing “systemic concerns” regarding technology and the potential for fraud and abuse, the FTC’s new division will ensure the agency is not left in the dust by tech-savvy scammers.

Because the FTC is a broad agency, it is somewhat of a generalist, and when a case requires specialist knowledge, it can bring in outside experts. You certainly want some good finance people, but you need a full-timer, say for logging regulations? Probably not, but at some point an issue or industry may become prominent enough to warrant a serious and permanent commitment of resources.

Such is the case described today with issues occurring in the tech world, which FTC Chairman Lina Khan has, of course, personally opposed. Whether it’s antitrust or consumer protection, or telling influencers to certify that a post is sponsored, the tech world is a vast and diverse environment for bad conduct and regulation.

The announcement of the OT fell into the hands of the agency’s CTO, Stephanie Nguyen. She gives as historical context the response to scam ads that spread over the radio at an unprecedented rate when it was new, saying that while the challenges of technology are new, the “systemic concerns” they raise are well known:

The common thread is that some technologies can significantly disadvantage consumers, be misleading or negatively affect competitive conditions. From the rise of the surveillance economy to the widespread adoption of artificial intelligence by companies, to business models that use technology to disrupt markets, the shift in the pace and volume of technology change means that more FTC matters need team members with technical expertise.

The Office of Technology’s highest priority is to work with the agency’s staff and leadership to strengthen and support the agency in enforcement investigations and litigation. This could mean dissecting claims about an AI-powered product to assess whether the supply is oozing with snake oil, or that automated teacher evaluation decision systems negatively impact employment decisions and draw conclusions that affect pay and tenure. We will also monitor business model changes, such as shifts in digital advertising ecosystems, to help the FTC understand the implications for privacy, competition and consumer protection. We’re working with lawyers and data scientists to decipher the collection and sale of location data and how that data can harm consumers, and to understand the opaque algorithms that make decisions that impact millions of consumers.

By naming each of these potential offenders, those companies know to watch out. It may be fashionable to say your HR productivity tool is AI-powered, but if you can’t prove it’s safe and effective, the FTC may soon be knocking on your (virtual) door.

To be clear, it’s not like the FTC has just let technology run wild for the past decade. In fact, there are already several technology-focused departments, such as the Privacy and Identity Protection Department. But it must have been clear enough to FTC leaders that they needed a bigger, more centralized effort to stay on top of trends and be more proactive with guidelines and enforcement.

They’re hiring, so if you’re a tech guy thinking about getting out of the rat race and getting a relatively mellow (in some ways) federal job, take a look.

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