FTC aims to counter ‘massive scale’ of online data collection

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Enlarge / FTC Chair Lina Khan said the commission intends to act on commercial data collection, which occurs on “a massive scale and in an impressive array of contexts.”

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The Federal Trade Commission launched the rule-making process for privacy regulations that could restrict online surveillance and punish poor data security practices. It’s a move that some privacy advocates say is long overdue, as similar congressional efforts face endless uncertainty.

The Advance notice of regulatory proposalapproved by a 3-2 vote along partisan lines, has been spurred by the collection of commercial data, which is occurring on “a massive scale and in an impressive array of contexts,” said FTC Chair Lina M. Khan. in a press release. Companies monitor online activity, friend networks, browsing and purchase history, location data and other details; analyze it with opaque algorithms; and sell them through “the massive, opaque marketplace of consumer data,” Khan said.

Companies may also fail to secure this data or use it to make the services addictive to children. They can also potentially discriminate against customers based on legally protected statuses such as race, gender, religion and age, the FTC said. Additionally, according to the statement, some companies are mandating participation in their “commercial monitoring” for the service or charging a premium to avoid it, using dark schemes to keep systems in place.

One of the three votes for the rulemaking came from Alvaro Bedoya, the founding director of Georgetown Law’s Center on Privacy & Technology, who was appointed three months ago. Bedoya, who focused on unregulated facial recognition, described privacy as a civil right.

This marks the first step in what could be a multi-jurisdictional effort by the FTC to act under its existing authority to regulate and enforce privacy protections. The Privacy Professionals Industry Association stated that, if the FTC worked under its Magnuson-Moss authority, or “guarantee,” it would face”a long process it may take several years.” The FTC gave no indication of a timeline for the issuance of a final rule, although it is unlikely to occur before the end of this year.

Critics and supporters also want to see Congress act

The FTC is seeking comment from stakeholders and the public, beginning with a public forum on September 8. Before the announcement was a day away, however, many organizations issued moving statements.

Consumer Reports (CR) had effusive praise for the regulator seeking to regulate. “As we continue to support federal and state efforts to enact and enforce comprehensive privacy legislation, consumers can no longer wait to have their personal information protected,” said Justin Brookman, Chief Policy Officer. technology at CR, in a press release. “The FTC has the power to issue clear rules to protect personal data by holding companies accountable for the collection, use and disclosure of unwanted data.”

CR was one of more than 40 organizations that urged the FTC to act on data privacy in 2021including the American Civil Liberties Union, the Electronic Frontier Foundation and Public Knowledge.

Energy and Commerce Chairman Frank Pallone, Jr. (DN.J.) said in a statement that while America’s lack of online privacy is “completely unacceptable,” the FTC should not be content with its existing authority to deal with this. Pallone pushed his US privacy and data protection law, which would expand the FTC’s power to create and enforce data protection. That bill cleared a key House committee, but it awaits an uncertain floor vote and an even tougher future in the Senate.

Sen. Edward J. Markey (D-Mass.), meanwhile, believes his own Children and Young Persons Online Privacy Protection Act is the best, if not the narrowest, way forward. The bill would create a youth privacy and marketing division at the FTC that would focus on protecting those 16 and under.

The two Republican commissioners of the FTC would agree to entrust confidentiality to Congress. Christine Wilson and Noah Phillips cited privacy laws that are apparently moving forward and the broad implications of any action by the FTC. Phillips said an FTC privacy action “will impact many thousands of businesses, millions of citizens, and billions and billions of dollars in commerce.”

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