Obama to Nominate Leibowitz to Head FTC

As anticipated, the Obama administration announced Friday Federal Trade Commissioner Jon Leibowitz will be nominated as chairman of the agency. The move could signal a shift at the FTC toward focusing more on online advertising and privacy, both subjects of interest to Leibowitz.

Leibowitz, a Democrat, fixed a critical eye on the digital ad industry as an FTC commissioner. Most recently, he warned “A day of reckoning may be fast approaching” for the online advertising industry. In a statement presented earlier this month along with the commission’s revised behavioral advertising principles, he wrote, “The jury is still out about whether [self-regulation] alone will effectively balance companies’ marketing and data collection practices with consumers’ privacy interests.”

One critic of the FTC’s current approach to Web privacy and the online advertising industry, Center for Digital Democracy executive director Jeff Chester, expects Leibowitz to bring change to the commission. “We expect significant FTC action on financial and health-related consumer issues, including privacy. There will also be a more critical eye cast with mergers,” he told ClickZ News recently.

Leibowitz will replace William Kovacic, who became chairman in March 2008 when former chairman Deborah Platt Majoras left to join the private sector as VP and general counsel of Procter & Gamble. The FTC had no comment regarding Leibowitz’s nomination.

A commissioner since 2004, Leibowitz has not ruled out FTC regulation of things like behavioral targeting. During a two-day FTC forum held in Washington, D.C. in 2007, he said, “The marketplace alone may not be able to solve all problems inherent in behavioral marketing.” Revealing his sense of humor, he added, “If we see problems…the commission won’t hesitate to bring cases, or even break thumbs.”

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, a critic of online advertising’s impact on data privacy, 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.

Democratic majorities in the House and Senate, now expanded since the 2008 elections, could result in legislation affecting the online ad industry. “The likelihood of something moving and passing is greater,” Mike Zaneis, VP of public policy at the Internet Advertising Bureau, told ClickZ recently.