Privacy: The FTC Takes Action And Warns Private Industry

by Michael Volkov

consumer3If you had asked me ten years ago whether privacy would become the focus of government enforcement actions, I would have brushed aside the issue with a cavalier – “No Way!!”  In the aftermath of 9/11, there was always a focus on privacy concerns when it comes to government surveillance and collection.  In the last five years, we have seen a dramatic increase in privacy surveillance and collection by the private sector.

In the past, the government’s focus on protecting privacy grew out of personal health information and the importance of protecting a patient’s privacy.  With the advent of technology, smartphones and our digital society, consumer privacy is becoming an issue for compliance officers and information technology specialists.

The FTC is now leading the charge on this issue – and they are gearing up for major enforcement actions.  Companies would be wise to add this to the list of risks for evaluation and ranking.

In a recent speech, FTC Chairwoman Edith Ramirez warned companies which collect and store consumer data that the FTC is going to monitor industry efforts to protect the privacy of consumer information.  In particular, she cited “big data” companies which collect, store and manage such information, especially when it comes to information about consumers’ health, Internet activity and purchasing practices.consumer

The FTC wants Congress to enact new privacy legislation which would address today’s technologies.  Right now, the FTC is stuck with applying the broad “unfair or deceptive” practices standard to protect consumer privacy interests.  It is not as clear cut a standard when it comes to privacy concerns since it hinges on whether companies adhere to privacy promises they make to consumers.  In more specific cases involving credit reports and credit reporting, the FTC can rely on the Fair Credit Reporting Act and the Children’s Online Privacy Protection Act.

Chairwoman Ramirez warned companies to avoid wholesale collection of consumer data without regard to specific reasons for collecting categories of information; to restrict use of consumer data to authorized purposes;  to implement reasonable security measures; and lack of transparency on use of information and disclosures to consumers how such information will be used.

The FTC has taken significant steps to back up its warnings – it recently subpoenaed nine data brokers to produce voluminous information about their collection and disclosure practices and policies.

In a recent administrative action, in response to two separate data breaches affecting  a toal of approximately 10,000 consumers, the FTC filed a complaint against LabMD, Inc., a medical testing laboratory for failing to reasonably protect personal and medical information.   The first breach involved the theft of information of 500 individuals by identity thieves, and the second breach involved around 9,500 consumers’ billing information (e.g. SSNs, dobs, medical treatment codes, financial information).

consumer4In its complaint the FTC cited LabMD for failing to (1) implement a “comprehensive data security program;” (2) identify security risks and vulnerabilities relating to storage of this information; (3) use appropriate measures to prevent employees from accessing personal information; (4) training employees on security policies and practices.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.