LIVE: Reuters NEXT Newsmaker featuring FTC Chairman Andrew Ferguson

Well, thanks for having me. I think what I would say is whether we need new laws is not a question we should ask until we know that the current laws are insufficient. And I think that over the last couple weeks, we've heard a lot of people and seen a lot of people racing to Washington and saying we need a brand new suite of laws. We need some antitrust exemptions and we need a giant new wall of regulations. And my response to that has been, you know, whenever in America we enact new laws, it's because we've reached the conclusion, or at least it's supposed to be, that the present laws are insufficient to accomplish whatever the purpose of those laws were. And I think jumping ahead to like Euro-style AI regulation instead of, you know, examining what can, like product liability, what will product liability laws do for this technology that is arriving right now. What do consumer protection laws do for that? Only once we have concluded that those are insufficient, I think, do we launch in. Now it's entirely possible that at some point, even in the near future, we conclude that we need additional guardrails. But I think the main point I've been trying to make is, you know, drawing on the classics, you know, I don't trust the Greeks even when they're bearing gifts. If two big companies are arriving in Washington that are at the forefront of this technological frontier and form at least what I think people, lay people, not necessarily antitrust world, but lay people would say is a duopoly. Duopolists asking for an antitrust exemption and then a brand new suite of regulations should fill all of us with really deep suspicion because there's no easier way for incumbents to insulate themselves from competition than to enlist Washington to come alongside them and build a wall and a moat around their existing technologies. I mean, when I worked on the hill, you know, I heard some people say, 'This is unprecedented. We've never seen CEOs of companies coming in and asking for reg.' Yeah. Yes, we do all the time every day in Washington. Half of the business regulations that Congress would be considering were proposed by the businesses themselves. They obviously also are sometimes deregulatory, but just as often are asking for regulations because big businesses have an easier time complying with new laws than smaller ones, of course. And so that is my concern is, you know, if the big players are coming in and saying build the wall, my response is, well, I'm suspicious of that. And also, we have tools that can protect consumers, protect Americans, protect American interests. But that does not mean that we're not going to conclude at some point we need additional guardrails. But I think that those decisions need to be made. Surely, we need to hear out the existing players, but should not be made at the behest of the existing players.

So I think my first response to that is I'm going to continue as long as I'm chairman to resist this anthropomorphizing of these tools. The idea that they are agents, that they break loose, that they have wills and desires of their own. And I know that at least in a lot of these circumstances the companies have announced that they broke loose from our control and they did these things and then subsequent examination of the audit trails reveals, well, no, they were instructed to go do things and they did. I mean, I saw there's this, you know, funny meme running around Twitter of a guy staring at a computer and saying like, 'Go hack that website.' The computer responds, 'I hacked that website.' And the guy goes, 'Oh my god.' And that seems to kind of play itself out over and over. So, my view is when we talk about agentic AI, that can be a useful way to describe a new tool that's available for human beings. But I don't, I'm gonna resist the idea that, you know, if someone tells a tool to do something and the tool does it, I don't think we would say, 'Oh, like what do we do about the tool?' Like, if someone walks into a, I mean, you know, just drawing on a case I had as solicitor general, if someone walks into a store and clubs someone else with a hammer, we're not going to go, 'What ought we to do about the hammer?' We're going to say, 'No, the man who wielded the hammer ought to suffer the consequences of his conduct.' And at least to date, I don't think that that principle should not apply to AI. Now, obviously, there will be, you know, new questions that arise when someone uses the tool and it acts in an unexpected, unpredictable way. You know, liability to lie with the person who innocently used the tool and achieved an unexpected result. Audit to lie with the toolmaker. But American law, especially like the general product liability and consumer protection laws, have been confronting new questions generated by new technology and adapting to it since the 18th century. That's sort of like one of the beauties of our legal system is that we adapt the new laws as we go which fosters innovation without making the government the decider of who wins and who loses. Now again, sometimes markets evolve in ways that require us to go outside of the traditional sort of Anglo-American legal toolbox and apply new laws. That's okay. We can do that. But I don't think the fact that this technology is exciting, interesting, and is acting in ways that sometimes or often surprise its creators that we ought to be rushing out of the present toolbox. That these tools have always played the principal guardrail role in our economic and legal system and I think we still should be using those until we know these are insufficient. It's time for new positive law.

Yes, with a but. Are you quoting me?

Yeah. Okay. I was worried you were quoting me and I was going to have to trip over myself.

Yeah. I mean, so yes. So, yes with a but. There are markets that from their creation we have personalized the price to the purchaser. Credit is the classic example of this. You and I will pay different prices for, well maybe we will pay the same but only because we will have relevant personal characteristics that the credit offerers care about and we'll get at the same price. The same is true of insurance. So there are markets that have always had their goods or services offered to people that would appear similarly situated at first glance but in fact aren't relevantly similarly situated for purposes of the product or service. I think the thing that, I mean we've seen polling on this that a lot of Americans in fact now most are concerned about is that when they are participating in markets where that has never been the case where the good or service was offered to everyone in the same place at the same time at the same price that that might no longer be true and that because you and I when we live in the world today generate an intense amount of personal data those data are collected bound together sold and used for various purposes that businesses will be able to tailor prices so that they are offering goods and services to you and I at our respective reserve prices which will be different. And I think that the main sort of like general principle that is implemented by the consumer protection laws that the FTC enforces is that reasonable expectations of consumers and economic transactions ought to be relied upon and the FTC ought to enforce. And so where consumers are entering into a transaction and reasonably believe that they don't need to shop around to find someone who's not offering a personalized price or they don't need to shop around to figure out who best predicted their personalized price. That if that is happening, if there is substantial personal data being used to offer a product or service where that has not been the tradition, that they ought to be told that that is happening. And so we have a draft policy statement. And for people who aren't familiar with how the FTC works, a policy statement is how we alert the markets that we're about to start bringing enforcement actions on the basis of what we understand the law to be, particularly when there's a new product, service, or technology that requires a new explanation of how our generally applicable laws will work for that new technology. We put it out for comment. We're digesting the comments. The previous administration did a market study on personalized pricing. I voted for the thing because it was the only thing happening in the previous administration on personalized pricing, but it was pretty poorly done. They had to actually redo it about halfway through. We have been reviewing the input. We learned basically nothing about personalized pricing. They didn't send the subpoenas to any merchants. They sent...

So we are in the process of preparing to issue a new study on this front that will be targeted at specific markets where we have evidence that this is a problem. Number one. Number two, we have this policy statement. And number three, we have launched law enforcement investigations in areas where we have concerns or we have reason to believe that this sort of thing has been happening behind consumers.

So on the grocery front, two things. One, we have an outstanding rulemaking that would require grocery apps, grocery delivery services, and food services to start telling consumers at the beginning of a transaction what the all-in price will actually be. Most people probably been in this position at some point, but I mean I certainly have where, you know, for ride share services, for grocery services, I believe that I, you know, I see a price, I go through the process and at the very end the price is like pretty...

Yeah. Junk fees rule, by the way, was one that was passed under the previous administration, barring extraneous fees at the end of a hotel transaction or a live event, live events, which we have been enforcing, including against one of the major ticketing companies. We got a $10 million civil penalty against them near the beginning of this administration. So we're sensitive to the price transparency concerns. But look, groceries is one of the examples that we used in the policy statement, which is if for example, a company had data suggesting that a person were homebound and was unable to get physically to the grocery store or like a nursing mother was unable to get to the grocery store and needed to obtain formula that using those data to charge that person a higher price than someone like maybe you and me, for example, that aren't in those situations would violate the FTC Act. And so that's what we have been alerting businesses to. Now we've already launched law enforcement actions on the basis of this policy statement. And we are in the process of trying to get a market study that will actually get to the heart of the question which are particular merchants in particular markets that have access to tremendous amounts of data using those data to charge differentiated prices to different people.

So I'm going to speak only for myself as a consumer, but delivery ride share services for sure. I mean, I have been in the situation that I think probably all of us or our friends have been in where like we're at an airport, we're going to basically the same part of the city or suburb and we pull out our phones and on our same app, or even on the same app and we're each getting different prices. There could be innocent reasons for that, but it at least gives me reason to believe that there might be something going on. So, ride share, grocery, airlines. I mean, look, like we all saw the tweet from, I don't remember which airline it was where someone was explaining like I originally thought the ticket was going to be this one thing and then I log back in and the ticket is like 22% higher and...

That's right. And someone from this airline responded on Twitter, 'Clear your cache, try again, you'll probably get a better price.' Again, there could be innocent explanations to this, but I think a lot of Americans are concerned about this. The Senate has held hearings addressing this problem. I don't have law enforcement jurisdiction over the airlines specifically. The Airline Deregulation Act of 1979 excluded the FTC from express law enforcement jurisdiction, but our market study authority is broader than our law enforcement authority. And so, these are just some of the markets where I personally am concerned.