FTC Finalizes Settlements with Four Companies Related to Privacy Shield Allegations

The Federal Trade Commission has finalized settlements with four companies over allegations they made false claims in connection with the EU-U.S. Privacy Shield framework, which enables companies to transfer consumer data legally from European Union countries to the United States.

In separate actions, the Commission alleged that Click Labs, Inc. and Incentive Services, Inc. falsely claimed to participate in the EU-U.S. Privacy Shield framework and the Swiss-U.S. Privacy Shield framework, which establishes a process for companies to transfer consumer data in compliance with Swiss law.

The FTC also alleged that Global Data Vault, LLC, and TDARX, Inc. continued to claim participation in EU-U.S. Privacy Shield after allowing their certifications to lapse. They also substantively violated the Privacy Shield principles by failing to verify annually that statements about their Privacy Shield practices were accurate and failing to affirm that they would continue to apply Privacy Shield protections to personal information collected while participating in the program.

Under the settlements, all four companies are prohibited from misrepresenting their participation in the EU-U.S. Privacy Shield framework, as well as any other privacy or data security program sponsored by any government or any self-regulatory or standard-setting organization. As part of their settlements, Global Data Vault and TDARX also are required either to continue to apply the Privacy Shield protections to personal information they collected while participating in the program, or to return or delete the information.

After receiving no comments on the settlements, the FTC voted 5-0 to finalize the settlements.

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