How to understand consumer privacy regulatory rights

How to Understand Consumer Privacy Regulatory Rights

With companies like Facebook and Google in the news every day about both real and perceived privacy threats, the issue of data security remains a hot topic for politicians and policy makers.

Several Washington D.C. institutions — from the White House and Congress to the FTC and industry trade groups — have shared their thoughts on data privacy regulation. To a privacy layperson, the resulting discord can be deafening. Everyone seems to agree that consumers need improved privacy protections, but what shape these protections will take is still very much up in the air.

Of course, just because you have to wait for the various groups on Capitol Hill to work out their differences and come to a solution on privacy rights doesn’t mean you have to be uninformed about the issue. This article will briefly summarize the positions of some of the primary players in data privacy regulatory talks and offer additional context for how to understand consumer privacy regulatory rights.

 

The Federal Trade Commission advises Congress on legislative issues.

The Federal Trade Commission (FTC) is an independent agency of the United States government created in 1914 to ensure that companies adhere to consumer protection laws. In other words, the FTC doesn’t develop legislation, but it does advise Congress on legislative issues.

Throughout 2010 the FTC played a central role in data privacy talks. A November 2010 Network World article discussed how the FTC has developed a new “privacy framework” in order to “referee what’s fair or unfair to consumers when it comes to personal data privacy.” Specifically, the article stated that the FTC privacy framework will “help establish a baseline of permitted practices for online collection of personal information.”

In December 2010 the FTC formally issued its report. The full text of the document can be found here, but a summary of the important key points is here. Essentially, the report argues on behalf of a “do not track” option that would allow consumers to opt out of being tracked by advertisers online.

 

Privacy laws will be in Congress’ court.

In a November 2010 Washington Post article, Cecilia Kang discussed how rising consumer concern over data security has made Internet privacy a bipartisan issue in Congress. As is typically the case with politics, if an issue becomes important to voters, it becomes important to politicians.

There are already proposals regarding Internet privacy circulating within the House of Representatives. Per Kang’s report, “Drafts of two House bills already have been circulated that would make it more difficult for advertisers and media firms to create profiles on users for behavioral advertising. But privacy experts say Republicans may seek a weaker version of those bills.” Weakened or not, the progress on these bills demonstrates a firm commitment by Congress to pass privacy protections for consumers.  Government officials know that citizens need to know how to understand consumer privacy regulatory rights.

 

The White House steps up its approach to Internet privacy.

Not to be left out, the White House has also weighed in on the privacy debate. In a November 2010 article, Wall Street Journal reporter Julia Angwin wrote, “The Obama Administration is preparing a stepped-up approach to policing Internet privacy that calls for new laws and the creation of a new position to oversee the effort, according to people familiar with the situation.”

The White House has also “created a special task force that is expected to help transform the Commerce Department recommendations into policy.” Commerce Department General Counsel Cameron Kerry and Department of Justice Assistant Attorney General Christopher Schroeder will spearhead the task force.

The Commerce Department and FTC reports will offer regulatory suggestions for Congress, though a statement from a Commerce Department spokesperson suggests that the Commerce Department report will factor in the economy of the Web to a greater degree in its analysis. In the aforementioned Wall Street Journal article, Jeff Chester of the consumer advocacy group the Center for Digital Democracy speaks to this disparity, saying that the framework of the Commerce Department report is “based on industry self-regulation.”

 

Internet trade groups are firm on self-regulatory efforts.

Speaking of self-regulation, one group is adamant that self-regulatory efforts are the best solution to consumer privacy concerns: the Interactive Advertising Bureau. As noted on its website, “The Interactive Advertising Bureau (IAB) is comprised of more than 460 leading media and technology companies who are responsible for selling 86% of online advertising in the United States.”

The IAB believes that federal regulations would place too great a burden on Internet advertisers, damaging the economy of the Web. Rather, they propose a self-regulatory model that allows consumers to read privacy policies in an easy-to-understand language and that gives them the power to opt out of advertising networks manually. A November 2010 New York Times article suggested that privacy icons may in fact be effective at increasing consumer awareness of how Internet advertisements mine consumer data.

In the summer of 2010, the IAB testified before Congress, claiming that government legislation would harm the advertising industry. As the debate over Internet privacy continues into 2011 and beyond, the IAB and other trade groups will continue to petition the government for self-regulation.

 

What’s next in the ongoing data privacy debate?

The important thing consumers should know about the ongoing debate over data privacy is that your online life has never had a greater impact on society. You need to know how to understand consumer privacy regulatory rights.  From the way employers use Google searches to assess job candidates to the way Internet companies use your search history to deliver relevant ads, the information you share online (willingly or unwillingly) is valuable to thousands of different people with different interests.