Antitrust Law Daily Wrap Up, CONSUMER PROTECTION: Rich discusses FTC’s consumer protection efforts in advertising and privacy areas, (Jun 15, 2015)

By Michael Menzhuber, J.D., LL.M.

In a speech, entitled “Consumer Protection 2015: Back to Basics for the New Media,” Jessica Rich, Director of the FTC Bureau of Consumer Protection, discussed the Commission’s latest consumer protection work in advertising and privacy. The address was delivered at the Kelley Drye & Warren LLP—Advertising and Privacy Law Summit on June 11 in Washington, D.C.

After briefly discussing the collection of data and prevalence of advertising, she noted that a goal of the FTC is to “make clear that the fundamental principles of consumer protection still apply in today’s and tomorrow’s marketplace.” Rich noted that the basic rules still apply: (1) tell the truth; (2) disclose facts necessary to prevent a claim from being misleading; (3) weigh any harms that might be imposed on a consumer carefully when making a business decision; and (4) do not help others deceive or harm consumers.

Advertising. In discussing the FTC’s recent activities with respect to advertising, Rich began by addressing deceptive health claims. Noting that such claims are a top priority for the agency, she discussed specific types of these claims. These included false and unsubstantiated weight loss claims and health claims targeted at particular age groups, especially older adults and children;

Rich next addressed deceptive endorsements by offering basic rules for avoiding deception: (1) endorsements must be truthful and not misleading and (2) any connection between an endorser and the market of a product, that would affect how people would evaluate the endorsement, must be disclosed. After briefly discussing FTC actions in this area, she noted that the FAQs in The FTC’s Endorsement Guide: What People are Asking has been updated.

The official went on to discuss disclosures and the basic rule that they must be “clear and conspicuous.” She noted that the FTC publication, Dot Com Disclosures, is source of guidance for disclosures online and on mobile. She further noted that, in response to many cases involving problems with omitted or buried disclosures, the FTC launched a project entitled, Operation Full Disclosure, to remind companies of the importance of clear and conspicuous disclosures.

Rich concluded her discussion of advertising by noting: (1) the FTC’s continued focus in the area of health claims; (2) an upcoming FTC workshop on the marketing and advertising of over-the-counter homeopathic products; and (3) the issuance of guidance on Native Advertising by the end of the year.

Privacy. The FTC privacy program, according to Rich, focuses on three related areas designed to protect consumers: Big Data; Sensitive Data; and New Technologies. She began by explaining what “Big Data” is and noting the privacy concerns that it raises for consumers. She also stated the need for companies to follow basic privacy principles: (1) do not collect or retain more data than is reasonably needed; (2) consider de-identifying data collected to minimize harm if it falls into the wrong hands; (3) tell consumers how their data will be used and shared; (4) give consumers meaningful choices about their privacy; and (5) protect consumer data from unauthorized access.

Rich explained that the FTC has emphasized these principles through policy initiatives and enforcement, further noting FTC reports and a FTC workshop entitled, Big Data: A Tool for Inclusion or Exclusion. She went on to discuss the FTC’s attention on the privacy challenges presented by the data broker industry and provided examples of actions taken by the FTC against data brokers.

Safeguarding sensitive information is another area of focus for the FTC. She noted that sensitive information can include kids’ health, financial, and precise geolocation data. After further noting actions taken by the FTC in this area, she went on to explain that data security is also a huge part of the FTC’s work to protect sensitive information. She concluded her discussion on privacy by noting the FTC’s special interest in protecting the privacy of kids and, in furtherance of this special interest, specific actions taken by the FTC.

Mobile and tech. Mobile technologies, and tech more broadly, is another area of focus for the FTC’s privacy program. After noting specific actions taking by the FTC in this area, Rich explained how the agency is focusing on tech internally and, in specific, the creation and operation of the Mobile Technology Unit.

Horizon. Rich noted that health privacy will continue to be focus for the FTC. She further noted that there will be more cases related to the Internet of Things, as well as the sale of sensitive data to scammers. The FTC, according to Rich, will also be hosting an upcoming workshop on cross-device tracking and Big Data, Sensitive Data and Mobile and Tech will be continue to be areas of focus.

News: Advertising ConsumerProtection Privacy FederalTradeCommissionNews