FTC Asks Tech Companies to Be Superheroes in Protecting Consumer Privacy

If you thought that Spiderman, Rupert Murdoch, and Santa Claus had nothing in common, think again. In a May 4th speech before the Computer and Communications Industry Association, FTC Commissioner Julie Brill managed to weave each of the three characters into one speech. She quoted Rupert Murdoch as she challenged technology industry leaders to "innovate like never before" in protecting privacy and earning consumer trust. Commissioner Brill praised the technology industry for everything from online dating to helping spawn revolutions in Tunisia, Egypt and Libya, but reminded the companies that, in the words of Spiderman's alter ego Peter Parker, "With great power comes great responsibility." She said, "I do ask you to take very seriously your responsibility to your customers, to consumers, and to society, and to remember, as you improve on the powerful online tools and mobile apps you have already provided to us, to build privacy protections into the design of your innovations." Brill then outlined the FTC's two most recent strategies for dealing with consumer control over private data, both of which she said had "fallen short" as technology continued to advance. The first strategy — "notice and choice" — failed because it was unreasonable to expect consumers to read lengthy and detailed privacy policies. The second — "no harm, no foul" — failed because it only addressed problems after the fact, and did not give companies any incentive to protect privacy at the outset. Brill then highlighted the three key recommendations of the FTC's preliminary privacy report issued in December 2010 [previously blogged about here]: Building privacy and security protections into new products rather than waiting to add them after problems arise. Simplified privacy policies. One suggestion is exempting "commonly accepted" practices from the initial notice, such as authorization to share certain information with the shipping company. Greater transparency around data collection, use and retention, including giving consumers knowledge of and access to the data that companies collect. The remainder of the speech focused on the FTC's self-described "most talked-about recommendation" — the Do Not Track mechanism. Brill confirmed what we wrote about back in December — namely, that the Do Not Track list would not be a government-run registry like the Do Not Call list, but would instead be based on a "technology-driven approach that will allow consumers to make persistent choices that travel with them through cyberspace, communicating their tracking preferences to every website they visit." According to Brill, such an approach, which would be run through the major browser providers, would give consumers "meaningful control over the information they share and the sort of targeted ads they receive." Brill praised the major browser providers for taking steps to implement Do Not Track tools, but reiterated that the FTC's work was not done and that the agency would continue to press industry to implement an effective Do Not Track mechanism. Brill also sought to alleviate industry concerns about the Do Not Track list, specifically that it would lead to consumers opting out of all forms of behavioral advertising en masse, "drying up the ad revenue that lets us enjoy content and innovate online activities for free." Brill suggested that much like the Macy's Santa Claus from "Miracle on 34th Street," who believed that Macy's would profit more in the long term if it encouraged customers to shop at other stores for items that Macy's did not carry, technology companies could actually generate more revenue by increasing their transparency and credibility with consumers. – Nancy Perkins and Daniel Stuart

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