The Federal Trade Commission(FTC) is warning that a recent ruling by the Ninth Circuit Appeals Court may have removed the agency's ability to regulate companies like Google and Comcast. While the FTC has a mandate to protect consumers from unfair or deceptive business practices, the statute which created the agency prevents it from regulating common carriers. The FTC should not be confused with the Federal Communications Commission(FCC), which does have the authority to regulate common carriers.
In the past, if a company had multiple businesses, the FTC would still regulate common carriers in their non-common carrier businesses. However, a recent decision by the Ninth Circuit ruled that common carrier status gave AT&T a blanket exemption from enforcement by the FTC. This decision was handed down by a three-judge panel, however the FTC is seeking an en banc hearing in front of all 11 judges.
In its filing, the FTC states that many companies offer both common-carrier services and non-common-carrier services. One example is Google. In addition to numerous online services like its search engine and cloud storage, Google also has a fiber network which makes it a common carrier. Also mentioned in the filing is Comcast which, in addition to being a major cable television provider, also provides Internet and phone services which makes it a common carrier as well. Finally, the filing mentions ExxonMobil, which is a common carrier by virtue of its oil pipelines. It argues that the recent ruling throws doubt on the ability of the FTC to regulate any of those companies in their non-common-carrier businesses.
The filing also explains why it believes the FCC will not be able to deal with this issue. It states, "The Federal Communications Commission can address harms related directly to telephone or internet service, but it lacks authority over other products or services, such as email and e-commerce. Other agencies have similar jurisdictional limitations. No agency has the same broad enforcement power as the FTC." It goes on to say, "even where the FCC can act against unjust practices of common carriers, it lacks authority to redress consumer losses."
The filing argues that this ruling contradict previous rulings by the Ninth Circuit, as well as other circuits. Prior decisions state that designation as a common carrier is based on activity and that its possible for a company to be a common carrier "in some instances but not in others, depending on the nature of the activity which is subject to scrutiny." The filing also argues that when the legislation that created the FTC was passed in 1914, it was understood that common carrier designation was based on activity.
Should common carriers have a blanket exemption from FTC enforcement? Leave your comments below.