FTC Testifies on Efforts to Protect Consumer Privacy

The Federal Trade Commission testified before Congress about the agency’s efforts to protect consumer privacy, including the FTC’s support for implementation of a “Do Not Track” mechanism that would allow consumers to control the tracking of their online activities across websites, and other approaches recommended in its recent privacy report.

In delivering Commission testimony before the Senate Committee on Commerce, Science and Transportation, FTC Chairman Jon Leibowitz said the current time is a “critical juncture” for consumer privacy, and described the FTC’s recent privacy report, including its call for final implementation of a Do Not Track mechanism.  The testimony notes that the Commission recommends Congress consider enacting general privacy legislation, and that it enact data security and breach notification legislation and targeted legislation to address data brokers.

Commissioner Maureen Ohlhausen presented her own statement at the hearing but voted “not participating” on the Commission testimony, as she was not at the Commission at the time of the release of the privacy report.

The report, titled “Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers,” advocates three main principles for protecting consumer privacy.  First, companies should adopt a “privacy by design” approach by building privacy protections into their everyday business practices.  Second, companies should provide simpler and more streamlined choices to consumers about their data practices.  Third, companies should take steps to make their data practices more transparent.  In particular, companies that don’t deal directly with consumers, such as data brokers, should give consumers reasonable access to the data they maintain about them.   The report urges individual companies and self-regulatory bodies to accelerate the adoption of the principles contained in the privacy framework.

According to the testimony, the FTC’s final privacy report recommends continued implementation of a Do Not Track mechanism that would allow consumers to choose whether they want to allow advertisers and other third parties to collect information about their Internet activity.  The final report highlights initiatives undertaken by a number of companies to respond to the Commission’s call for Do Not Track:  Microsoft, Mozilla, Apple, Google, the online advertising industry through the Digital Advertising Alliance, and the World Wide Web Consortium, an international standard-setting body, have all taken significant steps forward.

“While work remains to be done on Do Not Track, the Commission believes that the developments to date, coupled with legislative proposals, provide the impetus towards an effective implementation of Do Not Track,” the testimony states.

The testimony describes how the FTC, the nation's chief privacy policy and enforcement agency, has focused on privacy protection for more than 40 years, and has undertaken substantial efforts to promote privacy in the private sector through education, policy initiatives and enforcement.  Most recently, on Tuesday, the Commission announced a settlement with the social network Myspace resolving FTC allegations that Myspace made false claims to its users about protecting their personally identifying information.  The settlement bars Myspace from future privacy misrepresentations, requires it to implement a comprehensive privacy program, and calls for regular, independent privacy audits for the next 20 years.

In addition, the testimony notes that the Commission supports the recent efforts and the approach developed by the Department of Commerce regarding privacy issues, and looks forward to working together with the Department and the Administration as they move forward in their efforts.

The Commission vote approving the testimony and its inclusion in the formal record was 3-1-1, with Commissioner J. Thomas Rosch dissenting and Commissioner Ohlhausen not participating. Commissioner Rosch also dissented from the issuance of the Final Privacy Report. See http://www.ftc.gov/os/2012/03/120326privacyreport.pdf at Appendix C.

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(PrivacyTestimony)