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The Federal Trade Commission is up to the Task for Consumer Privacy

By Jonathan Cannon | April 16, 2018

The world is becoming increasingly connected. As a result more of our information is being collected online. Facebook, Google, and other websites gather petabytes of data about everyone online, whether or not you use their service. With this enormous trove of data being collected there is an increasing concern about individuals privacy.

As our digital personas grow it is imperative that consumer privacy is protected. Fortunately a federal agency exists with a strong body of precedent and experience to manage consumer privacy cases. The FTC issued a statement in March about their commitment to protect the privacy of consumers. They emphasized their enforcement tools to protect consumers against companies that do not honor their privacy promises, or engage in acts that cause substantial injury to consumers.

The Federal Trade Commission’s mission is to “protect consumers by preventing anticompetitive, deceptive, and unfair business practices, enhancing informed consumer choice and public understanding of the competitive process, and accomplishing this without unduly burdening legitimate business activity.” The FTC employs a case-by-case analytical framework that makes the agency the ideal entity to address consumer harms. The FTC has challenged a number of practices in consumer privacy alone and recently started a non-public investigation into Facebook.

The FTC found that Vizio had installed software on their televisions that tracked and monitored what consumers were watching. Vizio consumers that purchased televisions after August 2014 received no onscreen notice of the preinstalled tracking features Vizio had as a default. Older devices were given a popup notice stating that “Smart Interactivity” was enabled on the TV, and may be disabled. It gave no notice about collection of viewing data, or link to the settings or privacy policy.

The software not only monitored content streamed through the smart TV, it also captured data from third party devices like DVD players, streaming sticks, and cable broadcasts. The software was also collecting IP addresses, Wi-Fi signal, and locations of nearby Wi-Fi hotspots. Vizio was also collecting demographic information including age, sex, income, marital status, household size, education level, home ownership, and household value. As a counter example, Facebook has a privacy policy and regular popup notifications that direct users on Facebook’s Privacy Practices. 

The FTC Challenged Vizio’s conduct in a complaint that alleged that consumers had no reason to expect Vizio was engaging in second-by-second tracking of consumers viewing habits. Further, Vizio sold this information to third parties without consumers consent. The FTC challenged this practice as a “deceptive omission of material fact” that violated the “deceptive acts” section on the FTC Act. Data has become extremely valuable, but consumers have a right to consent to their data being collected, used, and sold.

Although there are no general privacy protections in law, the Federal Trade Commission has protecting privacy in 500 enforcement actions to protect consumers offline, online and on devices. The FTC released a report at the end of 2017 that details their privacy efforts.

The Federal Trade Commission has worked diligently towards a goal of protecting “consumers’ personal information” and ensuring “that consumers have the confidence to take advantage of the many benefits of products offered in the marketplace. The FTC has demonstrated time and time again that it is the regulatory body that balances free markets and consumer protection, without implementing restrictive regulations that impair innovation.