FTC Chairman Jon Leibowitz spoke earlier this month at the National Cable & Telecommunications Association’s Cable Show 2010. He also recently testified before the U.S. Senate Subcommittee on Financial Services and General Government of the Committee on Appropriations concerning the FTC’s FY 2011 budget request. Both his remarks and testimony reflected the FTC’s commitment to protecting consumer privacy while promoting competition. At the Cable Show, Leibowitz discussed behavioral advertising as it intersects with “consumer choice” and “consumer control” -- the choice consumers have to allow advertisers to chart their personal information, and the control they have to say how or where it is stored. In the cyberspace context, Leibowitz commented, “ ‘notice and consent’ rarely reflect[] a consumers’ conscious informed choice.” So what is being done to address this situation?
First, as Leibowitz discussed, a coalition including the Direct Marketing Association, the Interactive Advertising Bureau, and the Better Business Bureau have proposed behavioral advertising guidelines, encouraging companies to explain their information collection practices for advertising outside their privacy policies.
Second, Congress may end up regulating online data collection, as is reflected by Representative Boucher’s draft legislation, released earlier this month. And, last year the FTC issued a revised set of behavioral advertising self-regulatory principles, including the following: (1) websites need to give consumers the choice as to whether they want their personal information gathered for behavioral advertising, and, as Leibowitz warned, the disclosure should not be a “3-point font, ten-page document written by corporate lawyers and buried deep within the site;” (2) consumer data should be stored securely and only as long as necessary to fulfill a business need; (3) where a company changes its privacy policy, consumers should be informed and allowed to choose whether to continue allowing their data to be collected under the new terms; and (4) companies that use sensitive data in advertising should collect it only after receiving express affirmative consent.
Leibowitz’ testimony before the Senate Subcommittee concerning the FY 2011 budget also described the agency’s efforts and successes in protecting consumer privacy, including pursuing 29 actions against companies that failed to protect consumers’ personal information, obtaining $11 million as part of a settlement preventing false identity theft prevention claims, shutting down a rogue ISP that helped deliver child pornography among other illegal spam, and settling a lawsuit against Sears for not fully disclosing the scope of personal information collected. Efforts to protect consumer privacy are also being made in the areas of social networking, cloud computing, online behavioral advertising, and mobile marketing.
Outside the privacy area, Leibowitz also described the FTC’s continuing efforts to (1) protect financially-strapped consumers; (2) continue enforcement of the Do Not Call Registry; (3) protect children through litigation under the Children’s Privacy Protect Act; (4) promote competition by challenging anti-competitive health care mergers and stopping pay-for-delay drug patent settlements; and (5) protect competition in the technology, energy, and consumer goods services. The FTC requested $314 million to support 1,207 full time employees, up $22.3 million and 40 full time employees from last year.
- Amy Mudge and Marianne El Sonbaty
