FTC Gives Final Approval to Settlements with Four Companies Related to EU-U.S. Privacy Shield

The Federal Trade Commission has given final approval to settlements with four companies over allegations that they falsely claimed certification under the EU-U.S. Privacy Shield framework.

In separate complaints, the FTC alleged that IDmission, LLC, mResource LLC (doing business as Loop Works, LLC), SmartStart Employment Screening, Inc., and VenPath, Inc. falsely claimed to be certified under the EU-U.S. Privacy Shield, which establishes a process to allow companies to transfer consumer data from European Union countries to the United States in compliance with EU law.

The FTC alleged that IDmission applied for Privacy Shield certification but never took the necessary steps to complete its certification under the program. The company claimed on its website, however, that it complied with the EU-U.S. Privacy Shield framework.

According to the FTC complaints, SmartStart, VenPath, and mResource each certified to the Privacy Shield in 2016 but allowed their certifications to lapse. Despite this, all three companies continued to claim that they participated in the Privacy Shield program. The FTC further alleges that VenPath and SmartStart failed to abide by the Privacy Shield requirement that companies that stop participation in the Privacy Shield affirm to the Department of Commerce that they will continue to apply the Privacy Shield protections to personal information collected while participating in the program.

As part of the proposed settlements with the FTC, all four companies are prohibited from misrepresenting the extent to which they participate in any privacy or data security program sponsored by the government or any self-regulatory or standard-setting organization, and must comply with FTC reporting requirements. In addition, VenPath and SmartStart must continue to apply the Privacy Shield protections to personal information they collected while participating in the program, protect it by another means authorized by the Privacy Shield framework, or return or delete the information within 10 days of the order.

After receiving no comments, the Commission voted 4-0-1 to give final approval to the settlements with the four companies. Commissioner Christine S. Wilson did not participate.

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