FTC Issues Best Practices Guide to Protecting Consumer Privacy

by Hinshaw & Culbertson LLP
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The Federal Trade Commission (FTC) recently issued a report, “Protecting Consumer Privacy in an Era of Rapid Change.”

Two years in the making, the report outlines a “best practices” framework for the Internet industry concerning how companies should address consumer privacy. 

The FTC pledged that consumers will have an industry-created “easy to use and effective” “Do Not Track” option by the end of the year, or it will almost certainly face “Do Not Track” legislation from Congress next year. "Do Not Track" is the proposed ability by consumers to opt out of tracking procedures.

The Report calls on companies to act now to implement “best practices” to protect consumers’ private information. The “best practices” are based on the following key principles:

  1. Privacy by Design (building privacy at every stage of product development);
  2. Simplified Choice for Business and Consumers (give consumers the ability to make decisions about their information at the relevant time and context, including Do Not Track mechanism); and,
  3. Greater Transparency (make information collection and use practices transparent).

The Report indicates that, over the course of the next year, FTC staff will work to encourage consumer privacy protections by focusing on the following five main action items:

Do Not Track - The FTC will work with interested groups to complete implementation of an easy-to-use, persistent, and effective Do Not Track system.

Mobile Services - The FTC will be urgings companies offering mobile services to work toward improved privacy protections, including disclosures.  To this end, the FTC is trying to do what the California Attorney General did in February to improve and define consumer privacy on mobile apps. See our post dated February 24, 2012. 

Data Brokers - The FTC will be calling on data brokers to make their operations more transparent by creating a centralized website to identify themselves, and to disclose how they collect and use consumer data.

Large Platform Providers - The FTC cited heightened privacy concerns about the extent to which large platform platforms, such as Internet Service Providers, operating systems, browsers and social media companies, seek to comprehensively track consumers’ online activities.

Promoting Enforceable Self-Regulatory Codes - The FTC will be working with the Department of Commerce and stakeholders to develop industry-specific codes of conduct.

The FTC Report appears to be a broad warning to the Internet industry that it must adhere to what it considers reasonable behavior and has laid out a road map of its expectations in connection therewith.

For more information or any questions, please contact Tim Moroney at 415-743-3713 or tmoroney@bargerwolen.com.

 

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Hinshaw & Culbertson LLP
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