Notes from the FTC Roundtable

December 11, 2009

by Scott Hodes
Senior Policy Counsel

This past Monday I observed a Federal Trade Commission privacy roundtable in Washington D.C., the first of three privacy roundtables that will examine privacy challenges created by modern technology and business practices that collect and use consumer data. Some takeaways from the event:

1. The FTC is clearly not satisfied with “notice and choice” as a way of ensuring that consumer privacy is protected. Both FTC Chairman Leibowitz and Director of Consumer Protection, David Vladeck, made strong statements, echoed by academics and consumer advocates panelists, that consumers don’t really read or understand privacy policies. In light of that, they are encouraging industry to make disclosures in new ways that will allow for more transparency such as via “just in time” notices (at point of data collection) and through more understandable and standardized notice formats.

2. They also want to move beyond the current “harms based” approach for consumer privacy (examining whether a consumer has suffered some measurable economic harm as a result of how their data was used). Possible suggestions from panelists included refocusing on the Fair Information Principles or by creating rules that classify types of data uses by categories such as prohibited, requiring opt-in, or so typical and expected (e.g. using data to fulfill an order) that they wouldn’t even need to be communicated to the consumer.

3. Online Behavioral Advertising (OBA) was a very hot topic. Academic and advocate panelists cited studies that consumers do not understand how OBA works at all. Interestingly, Google noted that they were getting well less than 10% of opt-outs on their new ad preference manager profile page. Most consumers either did nothing while some of them simply changed which ad category groups they belonged to.

TRUSTe Seal holders Barbara Lawler, CPO of Intuit, as well as Jim Adler, CPO of Intellius, were panelists and both spoke positively about TRUSTe. Adler stated during his remarks that the TRUSTe certification process was rigorous and very helpful to Intellius by making them aware of industry best practices and standards. TRUSTe was also mentioned during the OBA discussions as being one of the groups coming up with an OBA notice and opt-out solution.

The next roundtable event will be on January 28th, 2010 in Berkeley, CA. Webcast coverage of Monday’s FTC roundtable is available here.