A Leibowitz-Led FTC May Strengthen Spotlight on Digital Ads

The Federal Trade Commission may strengthen its focus on online advertising and privacy if, as is expected, current FTC Commissioner Jon Leibowitz is named chairman of the agency.

“He would certainly keep privacy and online advertising as a focus of the FTC, so I think [his potential appointment] does matter,” said Mike Zaneis, VP of public policy at the Internet Advertising Bureau.

Reports indicate Leibowitz will be named as head of the commission, replacing William Kovacic. Kovacic replaced former Chairman Deborah Platt Majoras in March 2008, when she left to join the private sector as VP and general counsel of Procter & Gamble.

“A kind of privacy switch is going to go on at the FTC [once the new chairman is named] and they’re going to engage in this issue in a much more serious way,” said Center for Digital Democracy Executive Director Jeff Chester. “Under a Leibowitz regime we would get the kind of serious industry analysis that so far has been lacking from the Bush era approach.”

“Leibowitz has been a leader on privacy issues,” said Zaneis, who expects a Leibowitz-run FTC to continue along the agency’s current path of pushing for industry self-regulation, rather than creating new regulations for online advertisers.

As a commissioner, Leibowitz, a Democrat, has not ruled out FTC regulation of things like behavioral targeting. During a two-day FTC forum held in Washington, D.C. in 2007, Leibowitz noted, “The marketplace alone may not be able to solve all problems inherent in behavioral marketing.” He revealed his sense of humor, adding, “If we see problems…the commission won’t hesitate to bring cases, or even break thumbs.”

Leibowitz became a Commissioner in 2004, following a stint as VP of congressional affairs for the Motion Picture Association of America. “He’s worked on the hill, so he understands the importance of FTC messaging to Capitol Hill,” said Zaneis. “That’s important because they’ve been strong self regulatory supporters at the Commission. He understands what they say in this area holds a lot of sway on the hill.”

Although online privacy has been a pet issue for Leibowitz, Zaneis suggested he will be required to broaden the scope of subjects he deals with if named chairman. “I think people change when they become chairman, necessarily, because they have to be consensus builders… They have to be leaders on all issues.” As a commissioner, on the other hand, “You can be activist…you can pick your issues.”

The FTC is led by five commissioners nominated by the President, one of whom serves as chairman. Each serve staggered seven-year terms. A maximum of three commissioners can be members of the same political party. Kovacic and Commissioner J. Thomas Rosch are Republicans, and Commissioner Pamela Jones Harbour is an Independent. Her term is due to expire in September of this year. Majoras’s slot also has yet to be filled. Under the new Democratic administration, those two slots will most likely be filled by Democrats or Independents.

The more solid Democratic majorities in the House and Senate could spell legislation affecting the online ad industry. “I think eventually once they’ve worked through the big issues…they will turn to some of these issues, and that will be driven less by the administration and more by the usual suspects on Capitol Hill,” said Zaneis. Rep. Edward Markey (D) of Massachusetts and Rep. Joe Barton of Texas (R) have shown special interest in online advertising related topics.

Now that the Democratic majorities in Congress have been expanded, added Zaneis, “The likelihood of something moving and passing is greater.”