FTC Chairman Considers Do Not Track Registry

Posted on July 28, 2010 by Hunton & Williams LLP

In the latest chapter of the Federal Trade Commission’s ongoing efforts to promote consumer privacy with respect to online behavioral advertising, FTC Chairman Jon Leibowitz has reportedly suggested that the FTC may propose a Do Not Track Registry.  The registry would be similar to the FTC’s popular Do Not Call Registry, which allows consumers to opt-out of many types of telemarketing calls, but registration on the Do Not Track Registry would not stop online advertisements.  Instead, it would prevent those advertisements from being targeted to users based on their prior online activity.  Mr. Leibowitz’s remarks came during a hearing on Consumer Online Privacy held yesterday by the U.S. Senate Committee on Commerce, Science, and Transportation.  Current industry self-regulatory initiatives for providing consumers with choice regarding behavioral advertising include the Network Advertising Initiative’s Opt-Out Tool, which has been criticized for relying on opt-out cookies that consumers may accidentally delete, and a related beta Firefox browser extension designed to remember consumers’ opt-out preferences even after cookies are deleted.

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Kerry Signals Senate Support for Online Privacy Legislation

Posted on July 28, 2010 by Hunton & Williams LLP

On July 27, 2010, Senator John Kerry (D-Mass.) announced his intention to introduce an online privacy bill to regulate the collection and use of consumer data.  “Our counterparts in the House have introduced legislation and I intend to work with Senator Pryor and others to do the same on this side with the goal of passing legislation early in the next Congress,” Kerry said in a prepared statement.  Senator Kerry is the Chairman of the Commerce Subcommittee on Communications, Technology, and the Internet.  He indicated that his bill would go beyond the regulation of targeted advertising.  “Protecting the privacy of consumers online involves much more than the targeted advertising to which they are subjected,” Senator Kerry said. “Such advertising is just one result of the information that is routinely collected about us online.”

As we reported last week, Representative Bobby Rush (D-Ill.) introduced a bill regarding online data collection practices, which itself followed a similar bill proposed in May by Congressmen Boucher (D-VA) and Stearns (R-FL).  Also on Tuesday, FTC Chairman Jon Leibowitz testified before the U.S. Senate about FTC efforts to protect consumer privacy.

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FTC Investigating Privacy Risks to Data Stored on Digital Copiers

Posted on May 26, 2010 by Hunton & Williams LLP

Federal Trade Commission Chairman Jon Leibowitz recently sent a letter to Congressman Edward Markey, Co-Chairman of the bipartisan Congressional Privacy Caucus, announcing that the FTC will address the privacy risks associated with the use of digital copiers.  Congressman Markey had urged the FTC to investigate this issue after a CBS News exposé showed that almost every digital copier produced since 2002 stores on its hard drive images of documents that are “scanned, copied or emailed by the machine” – including documents with sensitive personal information.

In the letter to Congressman Markey, Mr. Leibowitz promised the FTC would collaborate with “copier manufacturers, resellers, and retail copy and office supply stores to ensure that they are aware of the privacy risk associated with digital copiers and to determine whether they are warning their customers about these risks, whether they are providing education and guidance on this subject, and whether manufacturers and resellers are providing options for secure copying.”  He also stated that the FTC would “provide additional guidance to both consumers and businesses specifically addressing how to protect personal information that may be stored on hard drives of digital copiers and other devices.”

By not erasing personal information stored on the hard drives of digital copiers, businesses may be violating numerous state records disposal laws that require businesses to take reasonable steps to ensure that records containing personal information be destroyed such that the information is unreadable or undecipherable through any means.  Personal information stored on digital copiers also may trigger federal and state breach notification laws if that information is not erased.  In April 2010, Affinity Health Plan notified over 400,000 current and former customers that their personal information had been stored on the hard drives of a leased office copier that Affinity later returned to the leasing company.  The copier containing the Affinity customers’ information was featured in the CBS News exposé when reporters found information from “drug prescriptions, to blood test results, to a cancer diagnosis.”

To help ensure compliance with applicable privacy and information security laws, businesses should destroy or erase any hard drives in digital copiers before selling or discarding those machines, and should contractually require that the hard drives of leased digital copiers be erased at the termination of the lease.
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FTC's New Commissioners Create a Democratic Majority

Posted on April 6, 2010 by Hunton & Williams LLP

Julie Brill and Edith Ramirez took their oaths of office on April 5 and 6, 2010, completing the Federal Trade Commission’s roster of five commissioners and facilitating the Commission’s new tougher stance on privacy.  As we previously reported, Ms. Brill and Ms. Ramirez were confirmed by the U.S. Senate on March 3, 2010.  There are now three Democrats and two Republicans on the Commission.

Last year, when the Commission was comprised of one Democrat, two Republicans, an independent and a vacant seat, FTC Chairman Jon Leibowitz announced an aggressive agenda for the Commission, including a “privacy re-think.”  The new Democratic majority will make it easier to advance that agenda through recommendations to Congress, responses to market requests for greater self regulation and the approach taken with respect to enforcement cases.

Julie Brill brings twenty years of privacy enforcement experience as Assistant Attorney General for Consumer Protection and Antitrust for the State of Vermont and Deputy Attorney General for Consumer Protection and Antitrust for the State of North Carolina.  Edith Ramirez was a litigation partner at Quinn Emanuel Urquhart & Sullivan in Los Angeles.

Additional information is available on the Commissioners' page of the Federal Trade Commission’s website.
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Federal Trade Commission: Is Privacy Moving to a Post-Disclosure Era?

Posted on January 12, 2010 by Hunton & Williams LLP

In a discussion with The New York Times, Federal Trade Commission (“FTC”) Chairman Jon Leibowitz, and chief of the FTC’s Bureau of Consumer Protection, David Vladeck, indicated that Internet publishers and advertisers can expect the FTC to play a more active role in safeguarding consumer privacy.  Chairman Leibowitz highlighted that, in the past, the FTC’s approach to privacy has focused on consumer notice and consent, and whether consumers were harmed.  From the FTC’s perspective, however, the present model is problematic because companies have failed to provide consumers with meaningful notice that would allow them to make effective choices regarding their privacy.  This “advise-and-consent” model is broken, as it “depended on the fiction that people were meaningfully giving consent.”  In reality, few consumers take the time to inform themselves about the notices and choices outlined in privacy policies.

The lack of meaningful consent has raised the possibility that privacy is moving beyond the advise-and-consent model toward a post-disclosure era.  It remains to be seen how the post-disclosure era will evolve and how the new paradigm will replace consumer notice and choice.  The FTC is examining the issue, and aims to publish a report by July 2010.  Although the final content of the report is yet to be determined, Chairman Leibowitz stated, “I have a sense, and it’s still amorphous, that we might head toward opt-in.”

For further information, view The New York Times blog post.
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Senior Staff Changes at FTC Bureau of Consumer Protection Increase Privacy Profile

Posted on December 3, 2009 by Hunton & Williams LLP

Senior staff changes at the Federal Trade Commission have enhanced privacy’s profile within the agency.  Jessica Rich is the new Deputy Director of Consumer Protection.  Ms. Rich has been the Acting Associate Director responsible for the Division of Privacy and Identity Protection following nearly a decade as Assistant Director for the Division.  Rich has long been seen as the FTC’s staff’s privacy thought leader.  The new Privacy Division Associate Director is Maneesha Mithal.  Ms. Mithal brings a strong international background to the position.  The new Assistant Director is Mark Eichorn, a long time attorney advisor to the Chairman Jon Leibowitz.  The Associate Director in charge of the Division of Financial Practices, Joel Winston, had led the Division of Privacy and Identity Protection, and brings a great deal of privacy experience to the financial practices position. 

The FTC begins a major privacy initiative on Monday, December 7, when it will hold the first of three roundtables exploring future directions for privacy oversight.  The second roundtable will be in Berkeley on January 28, 2010 with the third in Washington the second half of March.

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Federal Trade Commission Issues Behavioral Advertising Report

Posted on February 12, 2009 by Hunton & Williams LLP

As part of its ongoing efforts to examine evolving internet marketing practices, earlier today the Federal Trade Commission released a report on self-regulation of online behavioral advertising.  This report analyzes the comments received from interested parties in response to proposed self-regulatory principles issued by the Commission in December 2007.  It covers a wide range of issues including the increasingly blurred line between personally identifiable information and non-personally identifiable information and the applicability of regulations to "first party" versus contextual advertising.
 
Links to the report and the concurring statements of Commissioners Harbour and Leibowitz, as well as FTC Congressional testimony on behavioral advertising, can be found here. 

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