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FTC’s Do Not Track Part One: The Overview

Next week, I will be at SMX West in San Jose as part of a panel entitled “Do Not Track & Search Marketing.”  In coordination with that presentation, I will be summarizing FTC’s “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Business and Policymakers” and the more recent statutory proposals.  Today, we cover the Executive Summary which is a broad overview of the 80+ page FTC tome.

Although clearly an attack on current targeted behavioral advertising practices, there is at least an acknowledgment of the positive side of the innovations that allow for analytical tracking: ”Companies are using this information in innovative ways to provide consumers with new and better products and services.”  Then, the FTC immediately follows the notation to the industry’s attempts to self regulate with a judgment that it is not enough. The Executive Summary specifically states “industry efforts to address privacy through self-regulation have been too slow, and up to now have failed to provide adequate and meaningful protection.”

The executive summary goes through a historical discussion of the FTC’s stake in consumer privacy starting with the Fair Credit Reporting Act.  The FTC used enforcement, policy making and education to promote privacy before settling on a “notice and choice” provision which led to the creation of privacy policies meant to give consumers a choice.  The FTC also focused on a “harm based” model focusing on specific harms to consumers such as physical, economic injuries and unwanted injuries. 

Now, the FTC is considering a new framework focusing on three main components: privacy by design; clear and meaningful choice; and transparency.  Over the next few days, we will focus on the framework proposed by the FTC taking each component.  Then, we will look at the statutory proposals that have come as a result of the FTC’s guidelines.

The FTC admits its December 2010 publication is not law and that full implementation will likely require additional authority from Congress.  At the same time, the FTC seems to warn that it will and can force the issues through its enforcement capabilities under Section 5 of the Federal Trade Commission Act which prohibits “unfair or deceptive” acts or practices and other consumer privacy laws.   

 Up Next, the Scope of the Framework and privacy by design.