This is a time of extraordinary change: technology is transforming interpersonal and business communication, including marketing and advertising to consumers. Products are evolving as a result of innovation. Even the way consumers are paying for goods and services is being revolutionized, as electronic payment systems serve up new and inventive ways to exchange money. Indeed, some things that we have begun to take for granted existed, not very long ago, only in the realm of science fiction.

To learn more about the many technological developments that are changing the marketplace – and to assess their effect on consumers and, in turn, the consumer protection agenda – Chairman Deborah Platt Majoras directed the staff of the Federal Trade Commission (“FTC”) to hold hearings on “Protecting Consumers in the Next Tech-ade” in November 2006.

The Tech-ade hearings were structured to bring together a provocative mix of experts – speakers, discussants, and exhibitors – to explore the future of commerce as it relates to consumer protection. During the three public days of the event, more than 100 eminent scholars, marketers, technologists, entrepreneurs, and lawyers discussed technological developments that will shape the future, and the challenges they see for consumers, businesses, and those in the broader consumer protection community, including law enforcers, consumer educators, advocates, and researchers. A fourth day, open only to government representatives, featured discussion of the trends and challenges highlighted during the public hearings, and underscored the need for interagency cooperation at all levels to successfully meet the challenges of the coming decade. An archived webcast of the Tech-ade hearings, panelist presentations, transcripts, and blog entries are available at http://www.ftc.gov/techade

In the time that has passed since the Tech-ade hearings, it has become clear that many of the predictions made by panelists were spot on: consumers’ roles are changing in this new marketplace, as are the products they buy, how those products are marketed and advertised, and how they are paid for. It also is clear that with changes taking place at a dizzying pace, effective consumer protection is more important – and more relevant – than ever.

The Tech-ade hearings brought together innovators and industry representatives, and engaged advocates and academics – the “landscapers” who offered both an on-the-ground look at the present and a bird’s eye view of the future within the context of consumer protection. This report summarizes the major trends identified at the hearings and thus addresses areas that are likely to influence the FTC’s consumer protection agenda in the near term. As we look to the future, our primary objectives involve:

• Adapting consumer protection strategies to ensure that all consumers, including the vulnerable, are equally well served.
• Applying existing policies and creating new ones, as necessary, to address emerging challenges regarding new technologies and products that may be unfamiliar to consumers.
• Ensuring that consumers’ private information, which will increasingly be collected, stored, and used in both marketing and payment, is maintained securely.
• Monitoring the ever-expanding number of marketing channels in the worldwide marketplace for instances of deception or unfairness.
• Collaborating with law enforcers from around the world to protect consumers in the global marketplace.
• Encouraging self-regulatory initiatives to benefit consumers.

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Protecting Consumers in the Next Tech-ade: A Report By the Staff of the Federal Trade Commission
March 2008

Conclusions:

The Tech-ade hearings represent the latest chapter in the FTC’s effort to develop consumer protection policies and practices that address the effects of changes in technology in the marketplace. Based on the Commission’s experience and the information provided at the Tech-ade hearings, the FTC offers the following conclusions regarding how to prepare to meet the consumer protection challenges on the horizon:

• The Internet is continuing to expand and mature both as a marketplace for goods and services and as a marketplace of ideas, but on-line fraud, especially crossborder fraud, is a threat to its optimal development. The FTC will work to prevent Internet fraud by:

• Using its new powers under the U.S. SAFE WEB Act to coordinate and cooperate more closely with foreign consumer protection officials.
• Ensuring that consumer-producers who engage in activities to market and advertise products for consideration do so within the confines of laws prohibiting unfair or deceptive acts or practices in trade.
• Developing new strategies and harnessing the power of technology to deliver timely and effective consumer education messages.

• Consumers increasingly want to access content, including commercial messages; create and share content and information about themselves; and pay for goods and services how, when, and where they want. The FTC will work to prevent unfair or deceptive acts and practices that adversely affect the ability of consumers to make these types of choices.

• Products in the marketplace are changing constantly and rapidly as a result of obsolescence, convergence, interoperability, digital rights management and a host of other considerations. The FTC will work to prevent consumer harm arising from these changes by:

• Monitoring and prosecuting those who engage in unfairness or deception to exploit consumers’ lack of familiarity with new products, and using consumer education programs to edify consumers.

Technological advances are making it technically and economically feasible to collect, use, and store massive amounts of information – including sensitive information – about consumers. The FTC will work to protect the privacy and security of consumer information in this new information environment by:

• Aggressively enforcing its special statutes related to privacy as well as Section 5 of the FTC Act.
• Encouraging the development and implementation of self-regulatory standards related to new technologies that raise privacy and security concerns.
• Engaging in substantial business education efforts to encourage the adoption of reasonable security procedures to decrease the risk of data breaches.

• Technology and business practices will continue to evolve rapidly, creating the potential for benefits and harms to consumers. The FTC will seek to prevent injury to consumers in this dynamic marketplace by continuing to engage in substantial consumer education efforts and by serving as a "convener," regularly bringing together interested parties to discuss new technologies and their consumer protection implications.

The Tech-ade hearings made clear that technological developments will re-shape the marketplace over the coming ten years, changing consumers' everyday experiences in significant ways. While the anticipated pace of change and scope of developments undoubtedly are impressive, technological change is not a new phenomenon.

Over the past decades, our society has realized great benefits from technology: the introduction of timesaving devices, expedited methods of transacting business, and increased access to information and entertainment among them. In some cases, these new technologies --or business practices enabled by them --have harmed consumers. When that has happened, the FTC and its law enforcement partners have intervened, either applying existing laws to reach the illegal conduct or crafting and applying new legal remedies with specific effect on the new practices. That hurdles lie ahead in the coming decade is certain. Businesses, consumers, and law enforcers alike will have to be ready to meet these challenges, and work collaboratively to ensure that the benefits of technology are not overshadowed.

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