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Center for Regulatory Effectiveness Petitions FTC to Regulate Social Networking Sites

The Center for Regulatory Effectiveness has petitioned the Federal Trade Commission to initiate a public process establishing a “trade regulation” for web-based services to regulate Google, Facebook and Twitter. The FTC would clearly define acts or practices which they consider unacceptable under the proposed regulation.

Currently, the FTC has legal authority to ban only acts or practices that cause or are likely to cause “substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.” Any regulation would need to comply with the statutory limitation on the Commission’s authority.

In the absence of a rule for web-based services, the agency would lack a sound intellectual and legal framework for its work, creating the perception that the agency was interpreting ambiguous rules to obtain a preconceived solution.

A copy of the CRE petition is available at http://thecre.com/pdf/CRE-FTC%20Petition.pdf.

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