Federal Trade Commission Releases Final Report on Online Consumer Privacy; Calls on Congress to Act


In a final report released earlier today, the Federal Trade Commission (“FTC”) called upon businesses to step up their efforts to protect consumer privacy; yet the FTC is not holding its breath hoping private enterprises will heed its requests without Congressional action.  Which is why the FTC is also asking Congress to pass legislation to better protect consumers’ digital data from being misused or shared without their knowledge.

To download the FTC’s full report, click here: https://online.wsj.com/public/resources/documents/PrivacyReport_FINAL.pdf

The FTC wants companies to make privacy the ‘default setting’ for commercial data privacy practices and give consumers more control over the collection and use of their personal data through simplified choices and increased transparency.  In its report, entitled, “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers,” the FTC implores Congress to consider general privacy legislation, data security and breach notification legislation, and data broker legislation.

Among the FTC’s specific recommendations:

  • Privacy by design: Companies should build in consumers’ privacy protections at every stage in developing their products. These include reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy.
  • Simplified choice for businesses and consumers: Companies should give consumers the option to decide what information is shared about them, and with whom. This should include a Do-Not-Track mechanism that would provide a simple, easy way for consumers to control the tracking of their online activities.
  • Greater Transparency: Companies should disclose details about their collection and use of consumers’ information, and provide consumers access to the data collected about them.

The FTC said it will focus on these five areas during the year ahead:

  • Do-not-track policies: The FTC “commends the progress made in this area: browser vendors have developed tools to allow consumers to limit data collection about them, the Digital Advertising Alliance has developed its own icon-based system and also committed to honor the browser tools, and the World Wide Web Consortium standards-setting body is developing standards.” The FTC says it will “work with these groups to complete implementation of an easy-to-use, persistent, and effective Do Not Track system.”
  • Mobile privacy: The FTC urges companies offering mobile services to work toward improved privacy protections, including disclosures.” The agency plans a May 30 workshop “to address how mobile privacy disclosures can be short, effective, and accessible to consumers on small screens.”
  • Data brokers:  Data brokers should “make their operations more transparent by creating a centralized website to identify themselves, and to disclose how they collect and use consumer data. In addition, the website should detail the choices that data brokers provide consumers about their own information.”
  • “Large platform providers”: The FTC cites privacy concerns about the “extent to which platforms, such as Internet Service Providers, operating systems, browsers and social media companies, seek to comprehensively track consumers’ online activities. The FTC will host a public workshop in the second half of 2012 to explore issues related to comprehensive tracking.”
  • Code of conduct: The agency says it will work with the Department of Commerce and “industry stakeholders to develop industry-specific codes of conduct. To the extent that strong privacy codes are developed, when companies adhere to these codes, the FTC will take that into account in its law enforcement efforts. If companies do not honor the codes they sign up for, they could be subject to FTC enforcement actions.”

If you have questions about the information in this advisory, please contact the attorney assigned to your account.

For more information about our firm’s consumer protection and data privacy practice and to learn how our firm can help your company stay a step ahead of the regulators in this rapidly developing area of the law, visit the firm’s practice area page: Privacy and Consumer Protection Practice Area.

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