Waxman tells FTC: Dig into P2P dangers


WASHINGTON -- The chairman of a House investigations committee is pushing the Federal Trade Commission to expand its investigation into abuses by P2P companies, telling the agency it isn't doing enough.

Rep. Henry Waxman, D-Calif., chairman of the House Oversight Committee, contends that the FTC needs to delve more deeply into alleged abuses by the P2P networks (HR 7/25).

In a letter sent Wednesday to FTC chairman Deborah Platt Majoras, Waxman contends that the agency has underestimated the threat posed by such networks. In July, Waxman conducted a hearing into the networks, and he appears to be dissatisfied with the commission's response.

"The agency testified that the FTC views P2P file-sharing as on par with 'other Internet-related activities such as surfing Web sites, using search engines, downloading software and using e-mail or instant messaging," he wrote. "We question this assessment. We have not seen evidence that any of these other 'Internet-related activities' leads to the wholesale information disclosures described at the committee's hearing."

The agency did not return a call for comment.

Waxman lays out a series of recent disclosures that P2P networks facilitate identity theft and helped lead to the disclosure of more than 5,000 files of Social Security information and other personal details about customers of Citicorp's ABN Amro Mortgage Group.

The entertainment industry contends that people are driven to P2P sites for movies and music and end up opening up their computers to all manner of ills.

Known as one of Congress' most effective investigators, Waxman has taken an interest in the companies' operations. In July, he began investigating the operation of LimeWire and StreamCast. Waxman has grown concerned over government, personal and corporate data that has become available to hackers as consumers use the services to get such content as music and movies.

His letter to the FTC is an indication that he doesn't plan to let the investigation drop following a hearing before his committee July 24.

"In July, LimeWire got the wake-up call," one entertainment industry executive said. "This is the cold shower that comes afterwards."

Waxman's investigation comes two years after copyright holders won a victory when the U.S. Supreme Court found that the Grokster P2P service illegally induced people to violate copyright laws. While P2P services have faded from the news and congressional scrutiny, LimeWire and StreamCast are both being sued for copyright infringement by the record labels.