the ftc's primary law enforcement tool, the ftc act, prohibits unfair or deceptive practices. this law applies regardless of whether a company is marketing offline, through your desktop or telephone, or using a mobile device. we described four recent ftc cases brought under the ftc act that addressed practices in the mobile torino. two of these cases against two of the largest players in the mobile ecosystem, google and twitter, highlight the efforts to challenge deceptive claims that undermine consumer choices about how their information is shared. with google, the commission alleged the company deceived consumers by using information collected from g-mail users to populate a new social network agoogle buzz. the proposed settlement contained strong information including independent audits that protect the privacy of all google customers. in twitter, the commission charged serious lapses in the company's data security that allowed packers to a takeover twitter accounts and in excess to private tweets as well as their non-public poll numbers. the commission's order protecting d

david then it has to do with the ftc recently alleged that google violated the ftc act inappropriately by inappropriately collecting gmail user information to populate the social network. according to the ftc, google's action letter to receiving contact with individuals who may have serious concerns about. could you talk about how google has responded to the ftc on that matter? >> absolutely. as i said in my testimony, we hold ourselves to high standards on providing transparency and choice control to our users. and the situation you allude to with the launch of our first product can beat those standards. he was very confusing for our users. we think he fixed it relatively quickly. in a matter of days or change the product, but we have been in a longer conversation with the ftc about it afterwards and relatively recently ended into the senate to create. we've agreed for the next 20 years to put our money where our mouth is and we have signed up for two major things here. one is really instilling privacy by design, a process in our company for making sure we thinking about privacy from

the ftc brought important cases in this area, but the bar is still very low. the baseline rule for most data is that companies cannot affirmably lie about how they use your data. many company's response are not to make any recommendations at all. this is why policies are legalistic and vague. the easiest way to get in trouble is make a statement about what they are doing. the mobile space as was testified, many app makers don't make recommendations at all and they offer anything whatsoever. it's not possible in the modern environment for people to know how their data is stored and shared, so we've longed personal petitioned for a privacy law that requires companies to say what they do with data, give some choice around secondary transfers, secondary uses, and what they do with it when they are done. furmore, for sensitive information, religion or sexuality, health, financial, and most relevant to this hearing, location information, we believe that enhanced application of the unfair practice principles including affirmative consent should govern for this type o

the ftc fought cases in this area, but the bar is still very low. it's merely companies can want affirmatively lie how they treat your data. many company's response are not to make recommendations at all and why policies are legalistic and vague. how companies get in trouble is make a statement on what they are doing. the mobile space as emphasized, many app makers only a small percentage offer a few privacy statements at all. it's not possible to now how the data is stored an shared. we want a privacy law requires companies to say what they do with data, to give choice around secondary transfers and secondary uses and get rid of it when they are done. furthermore, for sensitive information with religion, sexual sexuality, and health. we believe an enhanced regulation of the principles include k opt-in consent should govern. thank you very much for allowing me to testify, and i look forward to your questions. >> thank you, mr. brookman, and by the way, for all of you your complete written testimonies will be made part of the record. mr. tribble? >>

the ftc is wrong, and i don't think anybody thinks the ftc is wrong. >> can you explain, why does the cfpb not have a commission to back why doesn't it have a commission to act as s in just the other commissions are not necessary? >> if this is right and all the other ones are wrong, and that just doesn't seem possible. this this is how we are supposed to set up a consumer protection and i guess you need to wipe out the ftc which has been here since 1914 and replace it with the director rather than a commission. it is not analogous. it is safety and soundness. accounting. it doesn't do a broad scale policy analysis for the sort of things we have here. let me give an example if i may. i agree totally with mr. cummings about his concerns with respect to access to credit. if you think of the combination of cfpb, the durbin amendment, the credit-card act, we are going to drive may be a million consumers out of the mainstream banking system. cfpb by increasing the regulatory burdens here is going to drive more consumers out of the mainstream banking system, put them exactly in the hands of

. >> i can't be judge and jury but all i can do is alert the ftc. >> reporter: that's what barbara boxer is doing following this hidden camera investigation into wal-mart's gift receipts. >> you should get exactly to the penny what you paid. >> reporter: that's not always what happens with a wal-mart gift vote. our sister stations went undercover at wal-mart in northern california and new jersey, buying items and then returning them with gift receipts after they went on sale. >> i thought it was more than that but that's not -- >> it probably was but when you don't have a receipt with the actual price, i have to give you whatever comes up. >> reporter: after spending more than $100, wal-mart gift receipts returned less than 63. the total loss, $44 .53. >> i think it's really reprehensible. >> reporter: sally greenburg is executive director of the national consumers league. >> consumers are cynical enough about company policy. this just adds to their sense of mistrust. >> reporter: wal-mart says their employees seen in the investigation weren't following company policy. a spokesman provid

when i think about this, in the ftc, no one ever said that the ftc is in confident because they have an agency -- i never saw horse trading with respect to these things. i saw it delivered a process that has internal checks and balances weighed all the considerations. i think that i was at the ftc, a lot of people that were there, and that if people had said that consumers would be better off if we took the consumer protection bureau of the ftc and spun it off and added to what everyone to come any regulations, without any consideration about other sort of thing, people would think that you have lost your mind. but that is the model, that is the model for the consumer financial protection bureau, that would be a disaster. that would be a disaster.

the ftc has basically set standards for with for some actions. another area of other important discussion is where enforcement position gets taken either through settlement or whatever becomes something that prevails on what is the check on that? legitimate businesses will say they need to start complying with this. >> that was one of my questions. this is about the relationship to the mortgage settlement. they're not intent on communicating very much of what they're doing. the agency is not up and running. that is a great concern. the balanced approach would have had a board oversee it. this was like the original proposal where there would be a -- internal debate and wrestling with rule-making rather than one director simply doing it. the cfpb will neither increase access to credit nor reduce the cost of credit. that is for certain. there's wide agreement on that. it is also clear that the current special assistant, the assistant to the president and assistant to the treasury secretary, ms. warren has been calling the shots organizing this burea

but all i can do is alert the ftc. >> reporter: and that's exactly what barbara boxer is doing today, following this hidden camera investigation into wal- mart's gift receipts. >> you should get exactly to the penny what they paid. that is their gift to you. >> reporter: but cbs found that's not always what happens. our sister station went undercover in wal-mart stores in northern california and new jersey buying items and returning them with gift receipts after they went on sale. >> i thought it was more than that. >> but don't have a receipt with the actual price. i have to give you whatever comes up. >> reporter: after spending more than $100, wal-mart gift receipts returned less than 63. the total loss, 44.53. >> i think it's really reprehensible. >> reporter: sally greenburg is executive director of the national consumers league. >> consumers are cynical enough about company policy. this just toody their sense of mistrust. >> reporter: wal-mart says their employees seen in the investigation weren't following company policy. a spokesman provided cbs news this video statement. >> l

in elaborating on the ftc thing is what we see in the ftc through the the level of five members process comes up with doing this. we also see the ftc that there is an internal check of competition, consumer choice on one side of the agency, consumer protection on the other side of the agency, and when i think about this the ftc nobody ever said that the ftc is incompetent because they've got an agency -- i never saw horse trading with respect to these things. what i saw was a deliberative process at the internal checks and balances that way all of the considerations here, and when i think about the cfpb, what i think is all i was at the ftc and i know a lot of people worked at the cfpb, and if people had said that consumers would be better off if we took the consumer protection bureau of the cfpb and spun it off and just let eight xu whoever it wanted to come to any regulations without any consideration about other sort of things people would think that you've lost your mind, yet that is the model, that is the model for the consumer financial protection bureau would be the cfpb consumer

lawsuits against intel and on your own web site, in fact, antitrust is always the issue including an ftc issue with intel and antitrust. new york has issued and europe has issues with antitrust. would you like to explain that? >> guest: fundamentally, big is not bad. we have been extremely successful. european companies, chinese companies, american companies, they love our microprocessors. and so we have a sizable market a share. we have worked with the ftc and with commercial litigants and continue to work with the european commission to resolve the differences. we don't engage in anticompetitive behavior. your business practices are sound, but we recognize that the public authorities have the right to raise these types of questions, and we are as responsive as we can be. at the end of the day, we produce a fantastic product. we're ahead of the competition in terms of the size of our microprocessors, in terms of the architecture. and that's why car companies or computer makers and many, many others buy intel chips. there's nothing we can do about it, but we will continue to work on a co

we have heard from the ftc -- we think the ftc has and should strongly enforce section five.in this case, i will not speak from the legal side of it, but we think it should conceptually include someone who commits uses your data and just does not have a privacy policy. -- who misuses your data and just does not have a privacy policy. i would say, we want to start with self-regulatory. we want to bolster the industry effort on that. and the stick side of that would be ftc coming after folks who do not have a privacy policy and misuse of data. >> and as far as the kids who might be claiming they are 13, for kids under 18, do you see a different way to reach out to them to talk about privacy policy? are you thinking about it way to make sure that they understand it and that you might use a different approach than an adult? >> fundamentally, i think most people in this room agree that people under the age of 18 should have a different experience on facebook because of the unique needs and privacy and security protections that a minor needs. that makes its way into all product, no

then the ftc would have to make sure that companies respect that choice. mr. chairman, i thank you. >> with the committee's permission, i would like to go ahead and go to the first panel. our first panelist is director of consumer protection bureau at ftc. we welcome you. your statement will be made part of the record. i would ask you to keep your opening remarks to five minutes a possible. >> chairman pryor, chairman rockefeller, members of the committee, i am the director of the federal trade commission's bureau of consumer protection. i appreciate dark tuesday to present the conditions testimony on consumer protection issues in the mobile market place. the views expressed in a written statement that we submitted represent the commission's views. today's hearing could not be more timely or more important. we are seen explosive growth in the mobile market place. device technology is constantly improving. robust wireless internet connections are nearly ubiquitous. businesses are innovating and consumers are purchasing and using smart phones at extraordinary ra

. >> i would defer to the ftc. >> our last weekend -- our last witness?larger staff. >> gentlemen, you have been most patient. >> i thank the gentleman. i am quite impressed for him to tackle those questions in five minutes. i am asked unanimous consent to put sony and epsilon's statements into the record. i want to sum up by saying that prior to 2005 we did not spend a lot of time talking about the dangers of date it preaches. things have gone -- we have gone from a stolen laptop to a sophisticated criminal cyber attacks on a worldwide network. this begs the question, if we do not do something soon, what is next and where does it end? i would like to remind members that they have 10 business days to submit questions for the record and as the witnesses to respond promptly to any questions they receive. this hearing is now adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> next, eight committee meeting on preparing for national -- natural disasters. live at 7:00 a.m., and your call

i think the ftc is getting there. think with enforcement, just merely because of limited resources is not entirely clear, i think, to the rest of the world. that is, in fact, the law. putting it into law would be an important thing. especially with the threat of civil penalties behind it. >> let me ask you this, how do we ensure that a company is holding on to personal data as long as necessary? each company has different needs. how do measure that? >> it's a very tricky issue. there is one the criticisms that came of the privacy buildup that came out last year. it described hard 180 day or 18-month cap on holding data. some companies are like that makes sense. behavioral advertising methods. data brokers, maybe not. they want to maintain the data longer. we have supported a state harvard model for legislation. companies that have similar interest can get together and propose for our industry. let's agree to hold on to the data, 180 days, 6 months, a couple of weeks. they don't feel the competitor's advantage to hold

>> i would refer to the ftc. >> last witness? >> larger staff, penalty authority, and fta rulemaking. >> gentleman, you've been patient. chairman, you've given me a minute 34 seconds more than i'm entitled to. >> thank you. i'm impressed with his ability to pack a wallet with so many yeses and nos. i ask to include the sony and epsilon correspondence in the hears. without objection, so ordered. i want to sum up by saying prior to 2005, we didn't spend a whole lot of time as a nation talking about the dangers of data breaches. things have sure changed in a hurry. we've gone to a stolen laptop containing 260,000 records to a cyberattack, containing 100 million customer records. this begs the important question if we don't do something soon, what's next and where does it end? i'd like to remind members they have ten business days to submit for the record, and please responsible properly to any questions they receive. i thank our witnesses for the help. our hearing is now adjourned. [inaudible conversations] [inaudible conversations]

. >> changing gears, i read i think it was last month "the wall street journal" reported doj and ftc resorted to coin flips, sometimes trades and bargains determining which agency would have jurisdiction, which would cost time and expenses. doj antitrust division and congress have conducted investigations into online search engines and online advertising markets. as this area of our economy continues to grow, how do you plan on dividing the work between the agencies while preserving institutional knowledge and consistency. >> a very good question, something we're trying to work our way through. the ftc and justice department have generally been in a good place dividing up responsibility for any trust enforcement. there have, however, been instances where we've not been on the same page. i think we need to get together to work together. that's what we're trying to do to figure out what the rules of the road will be so we don't end up with coin flips or other ways to decide these matters. >> they are working together to get guidance on who will oversee those matters? what roll do you t

we have worked with the ftc and with commercial litigants and continue to work with the commission to resolve the differences. we don't engage in anti-competitive behavior. our business practices are sound but we recognize that the public authorities have the right to raise these types of questions and we are as responsive as we can be. at the end of the day, we produce a fantastic products. we are at of the competition in terms of the size of our microprocessors come in, terms of the architecture and that is why car companies or computer makers and many many others by intel chips. there's nothing we can do about it but we will continue to work on on a corporate basis with authorities around the world on this issue. >> guest: what is it like to work with europe in their governing bodies? >> guest: we try to become a trusted adviser to the european commission on all sorts of issues, on environmental and energy issues, on privacy data security issues. we have worked very closely with them on antitrust questions. we have 85, 86,000 employees around the world who are trying to do the righ

>> guest: well, that question came up yesterday in the hearing, and the ftc contended that the cloud, you know, depending on where the server was located, didn't change things. but cloud computing is, it's, again, it's a great thing. it's a very useful tool, and we should kick around what it means to be based in the cloud. you know, t interesting now is how many of these services offer like a server with you can store all of your data, all of your files. there are even programs where you can have them keep ahold of all of your pass words in one convenient place expecting them to protect you and protect your data. and i think that's the question, again, consumers expect, you know, based on how much legal weight and authority is behind an agreement when you sign on with any of these guys. so i don't know if it's cloud-based or not. the questions, i think, are pretty much the same. >> host: what should companies do to make consumers whole when a data breach happens? should they be offering credit monitoring? help, you know, if there was an id theft as a result of their information being

why wouldn't the doj or the ftc review be sufficient? >> the communications act makes it clear that the fcc must approve transfers of communications has licensed and find that you're in the public interest in order to do so. communication is something of importance to every american it's 1/6 of our economy. it involves complex technical issues where an expert agency is important. other goals and values and the communications act and that has been the system for many years and it's important to make it work effectively. >> some have complained that reviewing some of the mergers the ftc has proposed that are not transaction specific for example during the review of the comcast nbc universal transaction the conditions involving broadband adoption and diversity were imposed. so do all of you believe those conditions are merger specific? chairman? >> yes and if i could add one word, the statute requires the fcc to make a determination that a transaction is in the public interest and so it's not surprising that companies as they come to the ft

. >> in august of 2010 after a joint working group ftc and senior attorneys and public workshops and comment opportunities that the department of justice made a substantial revision to its horizontal merger guidelines, let me ask you three questions and then i'll just give you the rest of the time to respond to the extent that you can. and if you don't have time, maybe you can provide written responses. first of all, could you briefly explain the impetus for the revisions and describe generally what the department hoped to achieve in making the changes? second, could you highlight some of the most significant changes made to the guidelines and briefly assess the impact these changes have had on recent merger reviews? and third, what role if any did the new guidelines have in the department's analysis and the -- of the merger between google and ita in particular, and if there are other mergers that these guelines were significant in i'd like to have your response probably in writing to the last question. but if you could respond briefly to the first two questions, that would be helpfu

this authority to supervise and examined them that the ftc has never had. there's an issue of disparity and credit scoring among people of color versus whites and we hope the new relationship, the new ability to look under the hood that credit bureaus will investigate these issues a little bit further. >> right here? other questions? hands? >> i am president of international investor. quick comment. it shakes our confidence little bit that the occ might be the model. >> structurally. that is it. >> it is also concerning to think the director him or herself would be so important making things public when they don't feel there's enough actually taken. looking decades in the future, seems that could be politicized. the heart of my question is our happened heard any discussion. we have a hard time understanding. if there's anything going forward that would curtail what was at the heart of this problem, that is the profit commission's structure here from the mortgage broker to the loan officer in the bank to the wall street derivativesmaker, all of them were pas

senator boxer says she expects an answer in a few days on whether the ftc will investigate. >>> it isheck of weather. >> thanks so much. that's your latest weather. now over to chris. >> marysol, thank you. tornadoes have killed more than 500 people so far this year and the season lasts at least another month. "early" show contributor tyler mcgill went to oklahoma city to follow one storm chaser and his crew featured in their own show on the discovery channel. >> when i see a tornado devastated joplin, missouri, last sunday, some 6 the most dramatic images were captured by storm chasers. people who make a living gathering information about these forces of nature. >> see! we've got to get east immediately. >> reporter: from april to june reed timmer and his team from tornadovideos.net monitor radar and crisscross the country chasing weather systems to gather data about the storms. >> i think you really have to be passionate and almost obsessed with tornadoes and meteorology to be a storm chaser and to do it for a living. >> reporter: most storm chasers film from afar. but reed and his

. >> changing gears, i read i think it was last month "the wall street journal" reported doj and ftc resorted to coin flips, sometimes trades and bargains determining which agency would have jurisdiction, which would cost time and expenses. doj antitrust division and congress have conducted investigations into online search engines and online advertising markets. as this area of our economy continues to grow, how do you plan on dividing the work between the agencies while preserving institutional knowledge and consistency. >> a very good question, something we're trying to work our way through. the ftc and justice department have generally been in a good place dividing up responsibility for any trust enforcement. there have, however, been instances where we've not been on the same page. i think we need to get together to work together. that's what we're trying to do to figure out what the rules of the road will be so we don't end up with coin flips or other ways to decide these matters. >> they are working together to get guidance on who will oversee those matters? what roll do you t

. >> in august of 2010 after a joint working group ftc and senior attorneys and public workshops and comment opportunities that the department of justice made a substantial revision to its horizontal merger guidelines, let me ask you three questions and then i'll just give you the rest of the time to respond to the extent that you can. and if you don't have time, maybe you can provide written responses. first of all, could you briefly explain the impetus for the revisions and describe generally what the department hoped to achieve in making the changes? second, could you highlight some of the most significant changes made to the guidelines and briefly assess the impact these changes have had on recent merger reviews? and third, what role if any did the new guidelines have in the department's analysis and the -- of the merger between google and ita in particular, and if there are other mergers that these guidelines were significant in i'd like to have your response probably in writing to the last question. but if you could respond briefly to the first two questions, that would be help

full authority to supervise and examine that the ftc has never had.here has always been an issue of disparity and credit scoring among people of color versus whites. we are hoping that the new relationship, the new ability to a book under the hood that the credit bureaus will help to investigate some of these issues a little bit further. >> right here. >> questions? >> president and international investor. first, quick what comment. it shakes our confidence to hear that the sec might be the model. >> structurally, that's it. in terms of independent. >> it is also a concern to think that the director, him or herself, would be so important in really making things public. we don't feel there is enough action being taken. looking decades into the future or however for you want to look, things can be politicized. but the heart of my question is simply this. i have not heard any discussion, and we have had a hard time understanding. if there is anything going forward that would curtail we think what is at the heart of this problem which is the profit commis

. >> finally again, secretary himelfarb six, sounds like the ftc and the cftc are working well together but at some point it is this members hope that so we wouldn't have this patchwork and pilot approach in duplicated sets of regulations, the fsoc was hopefully the place that would help resolve these issues and at some point there needs to be that umpire. i hope secretary geithner will realize not just in this particular case, but in a series of others. i think the indulgence of the chair. >> well, senator warner, as you heard from the chairman they are still early in the process and we will move forward. i think while respecting the independence of regulators commodities for the fsoc has a responsibility to look at things that has important implications and try to bring to bear consistency across the system where those issues are relevant. that is something we've been focused on. there's also from treasury's perspective and need to worry about international dimensions are not only to read consistency where we can with the united states but it can latch up to offer in the g20 and beyon

. >> finally again, secretary himelfarb six, sounds like the ftc and the cftc are working well together but at some point it is this members hope that so we wouldn't have this patchwork and pilot approach in duplicated sets of regulations, the fsoc was hopefully the place that would help resolve these issues and at some point there needs to be that umpire. i hope secretary geithner will realize not just in this particular case, but in a series of others. i think the indulgence of the chair. >> well, senator warner, as you heard from the chairman they are still early in the process and we will move forward. i think while respecting the independence of regulators commodities for the fsoc has a responsibility to look at things that has important implications and try to bring to bear consistency across the system where those issues are relevant. that is something we've been focused on. there's also from treasury's perspective and need to worry about international dimensions are not only to read consistency where we can with the united states but it can latch up to offer in the g20 and beyon

. >> finally again, secretary himelfarb six, sounds like the ftc and the cftc are working well together but at some point it is this members hope that so we wouldn't have this patchwork and pilot approach in duplicated sets of regulations, the fsoc was hopefully the place that would help resolve these issues and at some point there needs to be that umpire. i hope secretary geithner will realize not just in this particular case, but in a series of others. i think the indulgence of the chair. >> well, senator warner, as you heard from the chairman they are still early in the process and we will move forward. i think while respecting the independence of regulators commodities for the fsoc has a responsibility to look at things that has important implications and try to bring to bear consistency across the system where those issues are relevant. that is something we've been focused on. there's also from treasury's perspective and need to worry about international dimensions are not only to read consistency where we can with the united states but it can latch up to offer in the g20 and beyon

. >> in august of 2010 after a joint working group ftc and senior attorneys and public workshops and comment opportunities that the department of justice made a substantial revision to its horizontal merger guidelines, let me ask you three questions and then i'll just give you the rest of the time to respond to the extent that you can. and if you don't have time, maybe you can provide written responses. first of all, could you briefly explain the impetus for the revisions and describe generally what the department hoped to achieve in making the changes? second, could you highlight some of the most significant changes made to the guidelines and briefly assess the impact these changes have had on recent merger reviews? and third, what role if any did the new guidelines have in the department's analysis and the -- of the merger between google and ita in particular, and if there are other mergers that these guidelines were significant in i'd like to have your response probably in writing to the last question. but if you could respond briefly to the first two questions, that would be help

recently the ftc and cftc conducted a roundtable to discuss this very issue of implementation.i took away three very clear messages that the public was sending to the commission. first, they said give us an implementation schedule so we can make our investments to comply with the rules. second, there isn't anything that the market can not build, can not integrate or execute but the commission must provide clear rules and enough time to implement them. the panelists made it very clear they need months and not years to implements these rules. this makes it clear to me asking for a plan is not about a delay tactic it is about getting right. finally, phased implementation of the rules is essential to insure all pieces will be able to work together. the ball is in our court and the market has been frank about the challenges and has only asked for schedules, regulatory certainty and patience. understandably part of the challenge for the market is the speed which all the regulation haves come out. admittedly we're making a great deal of progress. in fact we're exceeding expectations.