The Federal Trade Commission is seeing increasing pressure to step up its regulation in online privacy issues.
A battery of cases brought to the FTC for evaluation have asked the agency to rule on whether businesses are tricking customers into giving up private information and recently proposed bills in the U.S. Senate and House of Representatives seek to expand the reach of the commission’s enforcement authority.
“The FTC has strangely become this kind of de facto regulating agency for the privacy practices of business and industry,” said Woodrow Hartzog, a fellow at the University of North Carolina School of Journalism and Mass Communication who specializes in privacy and online communication.
The FTC enforces business regulations and protects consumers from unfair or deceptive practices. The commission can fine violators or request the Department of Justice to file suit. An FTC spokeswoman did not respond to requests for an interview.
Complaints range from the practice of computational advertising, also known as real-time ad auctions where companies buy an ad personalized to a consumer in the fraction of a second it takes a web page to load, based on the text that person types into a web browser. Some privacy groups object to such advertizing on the grounds that individuals who are subject to it can neither opt out nor profit from the use of data about them.
On April 8, a group of privacy organizations filed suit with commission to halt the practice of computational advertising. The groups, including Center for Digital Democracy, U.S. Public Interest Research Groups and World Privacy Forum, in their filing, allege that by observing Internet users’ online behavior, companies that sell online ads (companies like search engine behemoth Google and its marketing subsidiary, Doubleclick) are unfair and deceptive.
“The state of law in the U.S. is we’re ok having no privacy,” Hartzog said. “The problem comes when we’re misled about what we’re agreeing to.”
Some lawmakers are working to better define the boundaries of privacy online. Members of Congress have recently proposed bills seeking to better protect information stored online and in so doing, expand the FTC’s role in enforcing privacy issues.
On May 19, Sen. John Rockefeller (D-WV) introduced the Restore Online Shopper’s Confidence Act which among other provisions seeks to keep online retailers from sharing customers’ billing information with third parties after some such companies were accused of tricking consumers. A few weeks earlier, Reps. Rick Boucher (D-Va.) and Cliff Stearns (R-Fla.) introduced a bill requiring websites to prominently display an opt-out feature for data sharing, or else require site visitors to positively opt in to data sharing agreements.
