Report Finds America Rejects Targeting Setting-Up Policy Debate

Posted on October 1, 2009 by Hunton & Williams LLP

In its announcement that it would convene a series of public roundtables to address developing privacy issues, the Federal Trade Commission requested empirical data on consumer privacy expectations. In response to that request, researchers at the University of California at Berkeley and the University of Pennsylvania have released a study entitled "Americans Reject Tailored Advertising." Survey data reported in the study found that 66% of Americans reject targeted advertising online; 86% reject such ads when told they are made possible through online data collection. The study also makes the case that Americans would like much stricter laws governing the data collected online and higher penalties for failures to comply.

The study did not explore consumers' perceptions of the role played by targeted advertising in providing free content to users or their willingness to pay for content in the absence of that advertising support. The House Energy and Commerce Committee has announced its intent to address these issues in the current session of Congress. In the absence of alternative empirical data, this study will feature prominently in the policy debate about regulating behavioral targeting in the U.S. and Europe.

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FTC Voices Strong Support for Federal Data Security Legislation

Posted on May 7, 2009 by Hunton & Williams LLP

On May 5, 2009, the Federal Trade Commission’s ("FTC's") Acting Director of the Bureau of Consumer Protection, Eileen Harrington, testified before the House Energy and Commerce Committee Subcommittee on Commerce, Trade and Consumer Protection in support of the proposed federal Data Accountability and Trust Act (H.R. 2221).  The Act would require companies to implement reasonable data security policies and procedures to protect personal information.  It would also mandate security breach notifications for consumers affected by data security breaches.

Ms. Harrington stated that the FTC views lax data security as a threat to the marketplace and, therefore, strongly supports the proposed legislation.  The legislation is limited in scope to address only electronic data, but the FTC advocated expanding that scope to include hard copy data.  The FTC also supported provisions in the proposed statute that give consumers rights to access and dispute the accuracy of information held by data brokers, but sought assurances that such rights would be compatible with and not displace the existing protections afforded to consumers under the Fair Credit Reporting Act.

In the FTC’s opinion, a key provision of the legislation grants the Commission authority to impose civil penalties for violations.  Ms. Harrington contrasted this proposed authority with the FTC's current data security enforcement mechanism that is generally limited to injunctive relief the agency seeks when alleging that information security practices are unfair or deceptive under Section 5 of the FTC Act.  The proposed legislation, on the other hand, would allow the FTC to undertake enforcement actions against practices it deems harmful to consumers, irrespective of whether such practices could be construed as unfair or deceptive.  In addition, the rulemaking authority the legislation provides would enable the FTC to promulgate enforceable regulations establishing standards for data security.  

Statements and testimony of Ms. Harrington and other witnesses are available here.
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