Antitrust Law Daily Wrap Up, PRIVACY NEWS: Center for Digital Democracy urges FTC to investigate Safe Harbor violations, (Aug 15, 2014)

By Greg Hammond, J.D.

The Center for Digital Democracy (CDD), a U.S. consumer protection and privacy organization, has filed a complaint and request for investigation with the FTC, urging that the agency review 30 companies’ alleged violations of the U.S.-EU Safe Harbor framework. The Safe Harbor, which was developed by the U.S. Department of Commerce and accepted by the European Commission, was designed to protect EU citizens’ privacy when their data is collected by U.S. companies.

The CDD’s draft complaint named 30 companies, including data broker companies, suspected of violating their Safe Harbor commitments: Acxiom, Adara Media, Adobe, Adometry, Alterian, AOL, AppNexus, Bizo, BlueKai, Criteo, Datalogix, DataXu, EveryScreen Media, ExactTarget, Gigya, HasOffers, Jumptap, Lithium, Lotame, Marketo, MediaMath, Merkle, Neustar, PubMatic, Salesforce.com, SDL, SpredFast, Sprinklr, Turn, and Xaxis. According to the privacy organization, these companies are allegedly collecting, using, and sharing EU consumers’ personal information—without their awareness or meaningful consent—to establish digital profiles about those consumers, to analyze their behavior, and to use such data to make targeting and similar decisions regarding each individual.

“The U.S. is failing to keep its privacy promise to Europe,” stated CDD executive direct Jeff Chester. “Instead of ensuring that the U.S. lives up to its commitment to protect EU consumers, our investigation found that there is little oversight and enforcement by the FTC. The Big Data-driven companies in our complaint use Safe Harbor as a shield to further their information-gathering practices, even though Safe Harbor requires meaningful transparency and candor. Our investigation found that many of the companies are involved with a web of powerful multiple data broker partners who, unknown to the EU public, pool their data on individuals so they can be profiled and targeted online.”

Along with its complaint, the CDD filed a request for investigation with the Commission, outlining three related patterns of deception the group of companies are accused of engaging in: (1) misstating their actual purposes and practices of data collection and use; (2) misrepresenting legal facts of importance to EU consumers; and (3) merging and acquiring other companies, expanding data collection and profiling abilities, and changing entire corporate structure and business plans without updating Safe harbor disclosures, or otherwise making clear their ongoing duties to protect personal information.

“CDD’s complaint describes the systemic failure of the Safe Harbor to function as it was intended,” stated CDD Legal Director Hudson Kingston. “Companies are flouting standards that the Department of Commerce agreed to and the Federal Trade Commission pledged to enforce. Safe Harbor has to be overhauled to make sure it actually works; until that time, it should be suspended. We call on the FTC to investigate and sanction the companies named in our complaint. The fundamental privacy right of 500 million Europeans has been ignored and must be acknowledged and protected going forward.”

News: ConsumerProtection Privacy