The Man With a Plan

FTC chairman develops privacy agenda

Its probably a good thing that the political leadership changes every so often in Washington, D.C.

The treadmill stops. Hordes of bedraggled people step off and stand blinking at the sunlight. A new batch of eager policy wonks climbs on board.

The treadmill veterans often remain in Washington, nursing themselves back to vigor at law firms, universities and think tanks. Theyll get a stab at it again when the leadership shifts.

Timothy Muris knows the treadmill. He toiled for both the Ford and Reagan administrations, then took a breather for roughly 13 years during the terms of George H.W. Bush and Bill Clinton while he worked as a law professor at George Mason University in Virginia.

But hes back, as chairman of the Federal Trade Commission, ensconced in his grand, fourth-floor office in the FTCs headquarters between the White House and Capitol Hill and a quick walk from the National Gallery of Art.

Muris is a tall, stick-thin, shaggy-haired conservative intellectual with a laid-back demeanor bespeaking his Southern California upbringing. During a recent interview before a long, dark wooden table in his office, he wore casual olive cotton slacks and scuffed black wingtips.

He inherits an independent federal agency that cut an increasingly higher profile on Internet issues during theroughly six-year tenure of former Chairman Robert Pitofsky.

One of the hottest issues was Internet privacy. Pitofsky led annual surveys regarding the state of online privacy, held numerous workshops delving into privacy policy issues, and eventually urged Congress to adopt legislation that would set online privacy rules.

The decision angered conservatives and invoked an almost volcanic response from FTC Commissioner Orson Swindle, a close ally and strong backer of Muris in his bid for the chairmanship.

Although Muris may have more experience with the FTC than any previous chairman — he has served as director of both the FTCs Bureau of Competition and Bureau of Consumer Protection — privacy is a relatively new issue.

"Ive tried to look at the issue of privacy as a whole, to try to put some context around the legislation question," Muris says. "Its clear to me that the FTC has a very important role, and privacy is a very important issue and there are serious privacy problems. We . . . are in the process of developing an agenda about what the FTC can do. Ive spent a lot of time with the staff. Ive spent more time on privacy than any other issue — a lot more time."

While he has not announced his position on legislation yet — that wont happen until after Labor Day, he says — Muris has concluded that he will devote even more resources to the enforcement of existing laws than Pitofsky did. Currently, the FTC prosecutes companies that post privacy policies and then unilaterally revoke them. The agency sued, for example, after the company announced it would sell its customer database after it went bankrupt. The sale, the FTC said, violated the companys privacy policy.

"Well certainly have more investigations than there were when I got here, on the privacy issue," Muris says. "Im not saying the FTC wasnt active, Im just saying well be more active."

He also says that he doesnt regard online privacy as "the center of the privacy universe," which could mean that he will be less likely to endorse Internet-specific legislation in the mold of what Pitofsky championed last year.

As the issue continues to roil on Capitol Hill, the various partisans mired in the debate are eager for Muris pending declaration.

"We have reached a point, partly because of the work of the FTC to date, that if you are the chairman of the FTC and you dont support privacy legislation to protect consumers, then you will lose credibility," says Evan Hendricks, editor and publisher of Privacy Times and a privacy consultant. "Thats why Muris is in an interesting situation. He comes from a background of laissez-faire, but the guy knows how to read and he knows politics and clearly there is surging consumer demand for privacy protection."

Hendricks celebrates Pitofskys tenure, saying he moved at the right pace and in the right direction on the privacy issue.

But the director of a conservative think tank — with which Muris was affiliated until his confirmation — argues that, in terms of privacy, Pitofsky was a disaster.

"Where we are headed with priv- acy is there is a need for specific rifle-shot intervention in the form of active policing, much more consumer education, and, conceivably, in the form of some additional regulation or standard-setting beyond that," says Jeffrey Eisenach, director of the Progress and Freedom Foundation. "And that may turn out to be Tims contribution, to define a constructive and market-oriented approach to privacy, which is an area where I think the Pitofsky commission failed."

Another important high-tech area for Muris will be antitrust, a field of law and public policy that he has spent much of his career examining and writing about.

"Antitrust," he says, "is a way of organizing the economy. Its a substitute for other, more invasive forms of regulation. And I think that means we need strong antitrust enforcement."

Not Playing Fair

Muris has sharply criticized some recent FTC antitrust cases, those brought against Intel in 1998 and Toys "R" Us in 2000. The agency had charged that Intel was a monopoly that illegally refused to deal with several computer manufacturers to strong-arm them into handing over certain intellectual property rights. The case was settled in March 1999. Muris wrote that the governments position was wrong because it failed to prove harm to consumers.

In the Toys "R" Us case, the FTC charged that the company organized a boycott of competing toy retailers by major toy manufacturers. In expert testimony, Muris defended the companys actions by arguing they created efficiencies that in the end benefited consumers by keeping more toys on the shelves.

His philosophy on antitrust, he says, boils down to the idea that "antitrust is about protecting consumers and not about protecting competitors."

There is no doubt that Muris leans heavily toward market-based solutions to problems rather than government regulation.

"We both tend to be reluctant government intruders," says the FTCs Swindle. "We want to see the private sector solve the problems. Both of us recognize that that is the only recourse and the best recourse."

When asked to sum up Muris in a single word, Eisenach answered, "unflappable."

Eisenach first worked with Muris on the 1980 Reagan-Bush transition team. In 1986, when the two worked in the Office of Management and Budget under Reagan, the federal budget was "in absolute crisis — politically, fiscally and in every way. Every day was a crisis."

"Throughout that entire time I never once saw Tim lose his cool or be anything other than centered and focused on solving the problems," Eisenach says.

Keeping his cool will come in handy on the gridlocked Washington roadways. Muris lives in Virginia and has a long commute to the office, rising at 5 a.m. most days to do some work before steeling himself for the traffic. But thats OK. For 18 years, Muris has listened to books on tape, "when Im exercising, when Im walking around the house, when Im showering, when Im out walking the dog." And certainly when hes driving.

A recent tape? A series of lectures on Beethovens Ninth Symphony.

At the time of the interview, he was in the midst of a new lecture on quantum mechanics, which is the study of matter and energy at the atomic and subatomic level. Its tremendously complex. Which might come in handy as Muris tries to navigate the FTC through the political swamps, storms, reefs and heaving seas of presidential politics, partisan warfare and Capitol Hill.