On Wednesday, December 1, 2010, the Federal Trade Commission (“FTC”) released its long-awaited preliminary report on the protection of consumer privacy, Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers (the “Report”). Although the Report does not have the force of law, it is the latest FTC pronouncement indicating that consumer privacy continues to be a growing enforcement priority for the agency. The FTC also intends for the Report to guide organizations’ information privacy practices and to inform Congress and other policymakers as they develop new privacy laws and regulations. The FTC is seeking guidance on this preliminary Report, and intends to issue a final report sometime in 2011.
In the Report, the FTC cites new and growing threats to consumer privacy driven by innovations that rely on consumer data, such as cloud computing, social media, behavioral advertising, and mobile and location-enabled devices. In response to these threats, the Report proposes a framework with three core components for entities to protect consumer privacy:
• “Privacy by Design” – integrating privacy more fully into products, services, and organizational practices at the earliest stages;
• Choice – providing consumers with mechanisms to choose how the organization uses and shares data, including a controversial “Do Not Track” proposal; and
• Transparency – increasing transparency of data practices.
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