FTC Welcomes Debate on Data Privacy

WASHINGTON — The Federal Trade Commission heard hours of testimony Thursday on how the commission should address data privacy concerns, particularly when companies use deceptive tactics to track consumers or data breaches occur.

The commissions’ five-plus hour forum and public hearing on data privacy comes as the three Democrat-appointed commissioners approved an Advance Notice of Proposed Rulemaking, kicking off the process to potentially create new rules on how businesses utilize and protect consumer data. The commissioners decided to pursue making new rules to more strictly protect American’s data because there is no national law doing so.

In an increasingly digitized world, more and more data is being collected, from health care information to reading and shopping habits, Chair Lina Khan laid out in her opening remarks.

“The stakes with these business practices are high and the FTC has a long record of using its law enforcement tools to combat these types of commercial surveillance and lax data security practices in instances where they are illegal,” Khan said. 

“With this rule-making proceeding we are now seeking to determine whether unfair or deceptive data practices may now be so prevalent that we need to move beyond case-by-case adjudication, and instead, have market-wide rules.”

The commission hosted two panels on data privacy — one from an industry perspective and another from a consumer advocate perspective. Privacy advocates, advertising executives, academics, parents and others from all walks of life tuned into the public hearing to share their thoughts.

There was a clear consensus privacy has to be a priority, however, how to reach that goal was hotly debated. 

“Right now, the bad behavior is too easy and there is no consequence,” said Marshall Erwin, the chief security officer of Mozilla.

Providing industry perspective, he spoke about how his company prioritizes privacy by blocking some of the site-to-site tracking within the Firefox browser. That lessens the power of certain large companies to consistently track users across the web, he said.

And while that aspect of privacy may drive users to use Firefox creating a market solution, too many people don’t understand the vast surveillance that occurs when browsing the web, he said.

“There’s a set of problems that technology cannot solve on its own,” Erwin said.

Paul Martino, the vice president and senior policy counsel for the National Retail Foundation, advocated that smaller businesses in particular shouldn’t have the same restraints as larger corporations like Google and Facebook that can better profit off vast amounts of data. The small businesses that have rewards programs could suffer from people totally opting out of all tracking across the web.

Martino and his fellow panelists agreed that tracking when done in the background or sold to third parties was the most harmful to consumers and the type of data collection they have the least amount of power to address.

During the public hearing there were more businesses weighing in that new rules could hurt their industries.

Christopher Oswald, the executive vice president of government relations for the Association of National Advertisers, spoke about how rules banning data collection could harm the “diversity of options” advertisers give consumers.

“Without advertising support, the internet would not have the equitable and democratizing effects it does. Consumers would pay more and those without the ability to pay would be cut off from value news, entertainment and other services to better their lives,” Oswald said.

However, Ridhi Shetty, the policy counsel for the Privacy and Data Project at the Center for Democracy and Technology, highlighted cases where data targeted advertising caused harm, especially to those seeking job opportunities.

“Such systems produce adverse outcomes because they are not designed to mitigate impacts on certain groups of consumers,” she said, explaining that people were left out of targeted advertising because they might not have as much engagement with a specific ad. 

Others in the hearing suggested new avenues for the commission to look into.

Rick Lane, a child privacy advocate, said the commission needs to take a particular look at how financial firms are collecting data from children’s debit and credit cards, because parents need to be able to opt out of those services.

Khan said the debate will provide a “rich public record” for either new commission rules or potential laws. The commission’s comment period is still open.

Madeline can be reached at [email protected] and @ByMaddieHughes