Antitrust Law Daily Wrap Up, PRIVACY NEWS: Brill Urges Shared Focus on Privacy Protection in Speech Before Direct Marketing Association, (Mar 14, 2013)

By Tobias J. Gillett, J.D., LLM.

FTC Commissioner Julie Brill delivered a speech on March 12 before the Direct Marketing Association describing FTC efforts to safeguard consumers’ privacy online and in the mobile environment, and calling for a shared focus on providing privacy protection to consumers.

Brill began her speech by setting forth a “common goal” that the conference participants should share: “a vibrant and innovative online and mobile marketplace fueled by the responsible use of consumer data.” She observed that consumers have become increasingly knowledgeable about the privacy implications of the use of their data, and have started selecting apps based on their use of that data. She contended that the FTC’s efforts to protect consumer privacy were thus assisting business by ensuring consumers do not abandon the mobile marketplace, and continue to use apps that collect data the direct marketing industry needs “to enhance the consumer’s experience.”

She proceeded to discuss recent FTC enforcement efforts involving mobile privacy. These included the FTC’s settlement with HTC America regarding its alleged failure to adequately secure software in its smartphones and tablet computers, the FTC’s settlement with the developer of the Patch social networking app for allegedly accessing users’ address books without their permission and for violating the Children’s Online Privacy Protection Act (COPPA) by collecting children’s information without their parents’ consent, and its enforcement action against background screening company Filiquarian for allegedly functioning as a credit reporting agency but failing to comply with the Fair Credit Reporting Act.

She also addressed recent policy initiatives the FTC has taken to protect consumers’ online and mobile privacy. She noted the FTC’s revisions to its COPPA Rule to close “a loophole that allowed plug-ins and other third parties to collect personal information about children” without obtaining parental consent, to require third parties to comply with COPPA under some circumstances, and to expand the definition of “personal information.” She also highlighted the FTC’s mobile privacy disclosures reportreleased in February that outlined best practices to be followed by various players in the mobile marketplace.

She placed particular emphasis on the FTC’s updates to its “Dot Com Disclosures” released yesterday, a document intended to provide guidance for online advertisers seeking to comply with FTC rules. She noted that the same consumer protection laws that apply to advertising in traditional media also apply to online advertising. She suggested that advertisers should incorporate qualifications into their claims, rather than providing a separate disclosure. She stressed that where a disclosure is required it should be “clear and conspicuous,” and that advertisers should not use a platform if a “clear and conspicuous” disclosure cannot be made on it.

Other principles from the guidance highlighted by Brill included placing disclosures as close as possible to the “triggering claim,” designing advertisements so consumers must see the disclosures, and circumstances under which hyperlinks to disclosures may be acceptable. She emphasized that the “key” for the FTC is the “net impression” of an advertisement, and that an advertisement will still be considered misleading if a disclosure is ineffective.

Brill then proceeded to discuss two additional initiatives regarding consumer privacy, Do Not Track and increased transparency for data brokers. She indicated her support for a browser-enabled Do Not Track standard “to provide consumers with granular choices that will be honored across platforms.” She urged stakeholders to continue their efforts to arrive at a robust Do Not Track standard.

She noted the FTC’s current examination of the practices of data brokers, and the FTC’s intent to issue a report on them later in 2013. She highlighted concerns with the use of data to make discriminatory marketing offers without giving consumers the ability to ensure the accuracy of the data. She suggested the possibility of a web portal to provide information to consumers about the practices of data brokers and to permit them to opt-out from having their data used for marketing purposes.

Brill concluded her speech by asserting that the biggest threat to the online economy was consumers becoming “increasingly skittish” as they learn about how their “personal information is collected, used, bought, and sold.” She contended that the FTC and marketers shared the common goal of “making the online and mobile marketplace a safe place for consumers and their families to shop, share, view, and communicate.”

News: Privacy ConsumerProtection FederalTradeCommissionNews