FTC Issues New Report on Consumer Privacy
On December 1, 2010, the FTC issued its long-awaited report, titled “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers” (the “Report”). The Report was developed after a series of roundtable discussions among stakeholders designed to explore privacy issues in the 21st century. Those discussions focused on the challenges associated with advancing technology and business practices that allow for the collection and sharing of consumer data that often go unstated as well as unnoticed by consumers, and the resulting threats perceived by some to consumer privacy.
The Report is meant to build upon the notice-and-choice and harm-based models, the limitations of which have been recognized by the FTC. The Report provides a framework, applicable to all “commercial entities that collect data that can be reasonably linked to a specific consumer, computer, or other device,” that attempts to balance the privacy interests of consumers against the interests of businesses to utilize consumer information to sell products and services. There are three main tenets of the framework:
- “Privacy By Design” - Companies should promote consumer privacy throughout their organizations and at every stage of the development of their products and services
- Consumer Choice - Companies should simplify consumer choice
- Transparency - Companies should increase the transparency of their data practices
