FTC to Industry: Adopt Consumer Privacy Best Practices Now

March 28, 2012 – Industry members needing another reason to join the fray of companies participating in the Digital Advertising Alliance’s (DAA’s) voluntary consumer privacy protection program got a big one this week: The Federal Trade Commission’s (FTC’s) final report on protecting consumer privacy. In the report, the FTC recommends that companies begin adopting its best practices to protect consumers online; the Commission also asks Congress to consider enacting legislation covering general privacy, data security and breach notification, and data brokers.

“If companies adopt our final recommendations for best practices – and many of them already have – they will be able to innovate and deliver creative new services that consumers can enjoy without sacrificing their privacy,” said FTC Chairman Jon Leibowitz. Indeed, the FTC, the U.S. Department of Commerce and the White House praised the DAA and its members Feb. 23 for their efforts – including DAA’s Self-regulatory Program for Online Behavioral Advertising and its “Your Ad Choices” public education advertising campaign – to protect consumers’ privacy online.

The final FTC privacy report, issued March 26, expands on a report issued by the agency in December 2010 by asking companies handling consumer data to implement specific recommendations for protecting privacy, as follows:

  • Privacy by Design – Companies should build in consumers” privacy protections at every stage in developing their products. These include reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy.
  • Simplified Choice for Businesses and Consumers – Companies should give consumers the option to decide what information is shared about them, and with whom. This should include a Do-Not-Track mechanism that would provide a simple, easy way for consumers to control the tracking of their online activities.
  • Greater Transparency – Companies should disclose details about their collection and use of consumers” information, and provide consumers access to the data collected about them.

Leibowitz indicated that although many companies are on board with these recommendations, it may be necessary for Congress to step in. “We are confident that consumers will have an easy to use and effective Do Not Track option by the end of the year because companies are moving forward expeditiously to make it happen and because lawmakers will want to enact legislation if they don’t,” Leibowitz said.

To that end, the FTC “urges individual companies and self-regulatory bodies to accelerate the adoption of the principles contained in the privacy framework, to the extent that they have not already

done so,” according to an FTC press release.

The FTC will be active in five key areas over the next year, the report states: (1) Do Not Track; (2) mobile services; (3) data brokers; (4) large platform providers; and (5) enforceable self-regulatory codes.

“To the extent that strong privacy codes are developed, the Commission will view adherence to such codes favorably in connection with its law enforcement work,” the report states. However, the FTC states that it “will also continue to enforce the FTC Act to take action against companies that engage in unfair or deceptive practices, including the failure to abide by self-regulatory programs they join.”