Exploring Privacy: What the FTC Wants You to Know When Building Your Social Platforms

Exploring Privacy: Recent Developments at the FTC December 15, 2010 To access the audio portion of this webinar, please visit the WOMMA download library at: http://WOMMA.org/downloads

Exploring Privacy: Recent Developments at the FTC The views expressed are those of the speaker and not necessarily those of the FTC or any other person. Moderator: Tony DiResta   Partner in Advertising Marketing & Media Manatt, Phelps & Phillips, LLP WOMMA General Counsel e. [email_address] Speaker: Manas Mohapatra   Division of Privacy and Identity Protection Federal Trade Commission e. [email_address]

Overview
Background
FTC Act prohibits unfair or deceptive acts.
Recent Privacy Roundtable Series
Examining approach to protecting consumer privacy.
Privacy Report
Protecting Consumer Privacy in an Era of Rapid Change

FTC Background
FTC is an independent law enforcement agency.
Five Commissioners appointed by President.
Consumer protection and competition mandate.
Section 5 of the FTC Act
Broad authority to prohibit unfair or deceptive acts or practices.
Commission brings law enforcement actions in federal or administrative court. Also policy work – public workshops, Congressional testimony, consumer education and guidance to business.
Privacy has been a key consumer protection priority.
No omnibus privacy law, sectoral approach.
In addition to Section 5, enforce several privacy laws.

Privacy-related Enforcement Actions
25+ Data Security Enforcement Actions since 2001
ChoicePoint (February 2006): Action against data broker that sold 160,000 consumer files to identity thieves posing as clients
LifeLock (March 2010): Commission challenged the company’s claims that it took stringent security measures to protect consumer data and that it encrypted such data
RiteAid (July 2010): Commission alleged company failed to implement reasonable and appropriate procedures for handling personal information about customers and job applicants, particularly with respect to its practices for disposing of such information

Sears (June 2009)
Sears invited certain consumers visiting its web sites to become members of the “My SHC Community.” Sears paid consumers $10 to participate. As part of this process, Sears asked consumers to download “research” software that it said would confidentially track their “online browsing.”
FTC alleged Sears failed to adequately disclose that the downloaded software collected consumers’ sensitive personal information

Twitter (June 2010)
Hackers gained unauthorized administrative control of Twitter, including access to users’ non-public tweets and the ability to send out phony tweets
FTC alleged Twitter failed to
Prevent unauthorized access to nonpublic information
Honor its users privacy choices

Privacy Roundtables
Looked at privacy protection in light of new technology and business models that collect and use consumer data.

Privacy Roundtables
Significant Public Participation
200 participants reflecting range of perspectives.
Transcripts and comments on FTC’s website.
Topics
Benefits and risks of data collection
Consumers’ expectations about data practices and privacy.
Adequacy of existing legislation and self-regulation.
Privacy-enhancing technologies.
Treatment of health and other sensitive data.

Themes
Increased collection and use of consumer data
Increased computing power and lower data storage costs allow business to collect, store, and use ever increasing amounts of data.
New business models the allow companies to monetize the data.
Lack of understanding and informed consent
Much of the data collection and use is behind the scenes and invisible to consumers -- OBA network advertisers and data brokers.
Privacy policies not effective.
Consumers are interested in privacy
Facebook example.
Benefits of data collection and use
Free information and content; personalization; new products and services.
Decreasing Relevance of PII/non-PII Distinction

Privacy Report
Protecting Consumer Privacy in an Era of Rapid Change
Preliminary report released December 1, 2010
FTC accepting public comments until January 31, 2011

“Do Not Track”
Stakeholders have called for a centralized choice mechanism for OBA similar to the FTC’s Do Not Call
Staff has recommended a “Do Not Track” mechanism

Report: Three Privacy Concepts
Companies Should “Bake in” Privacy
Employ reasonable safeguards to protect data.
Limit data collection and length of retention.
Procedures to promote data accuracy.
Implement internal privacy programs.
Simplify Privacy Choices
Carve out commonly accepted business practices – fraud prevention, first party sharing, fulfillment.
All other practices should have simple choice at relevant time and context.
Improve Transparency
Improving and standardizing privacy disclosures to compare across businesses.
Tiered access to consumer data that companies maintain.
Consumer Education.

Questions?
More information available at:
www.ftc.gov/privacy
www.ftc.gov/infosecurity
Manas Mohapatra
Federal Trade Commission
[email_address]

DiResta the Law Blog
Tony provides insight into the current regulatory and legal events and look beyond the hype into the practical applications of WOM.
Read here: http://WOMMA.org/Di Resta
WOMMA Ethics Resources
Living Ethics Blog
WOMMA’s annual Living Ethics Review now open for comments
Comment period closes January 4, 2011
Read and comment here: http://WOMMA.org/EthicsReview/
FTC and Ethics Updates
To help manage the flow of constantly updating information on ethics and the FTC, WOMMA has created a resource to keep you up to date and in the know.
Read here: http://WOMMA.org/FTC

Exploring Privacy: What the FTC Wants You to Know When Building Your Social Platforms

by Word of Mouth Marketing Association on Dec 15, 2010

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Exploring Privacy: What the FTC Wants You to Know When Building Your Social Platforms — Presentation Transcript