FTC Nominees Emphasize Agency’s Increased Focus On Internet Privacy
FTC nominees Maureen Ohlhausen and Jon Leibowitz told Senate Commerce Committee members at their confirmation hearing Tuesday that the agency is working hard to ensure consumers have sufficient privacy protections on the Web. Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., said he favored a Do-Not-Track mechanism and a rigorous enforcement regime as a means to ensure consumer privacy online.
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Rockefeller hammered Facebook for “changing its privacy policy without notifying its users first.” He urged Leibowitz and Ohlhausen to consider two things as the agency negotiates a settlement with the company over alleged privacy violations. First, the FTC should require Facebook to obtain “informed consent from users so that they can’t deceive users with their privacy policy,” he said. Second, the agency should implement “a rigorous enforcement regime.”
Leibowitz, who is seeking his second term as an FTC member and is currently chairman, said he heard Rockefeller’s concerns “loud and clear.” Consumer privacy will be a “major focus” on both the agency’s enforcement and policy fronts, Leibowitz said. “We called for more privacy by design, more choice and transparency. When we see real problems in the marketplace, we try to get companies to do a better job. Sometimes they do, sometimes they don’t.” Leibowitz also told members that if companies do not protect their customers’ data, “we will go after them.”
FTC Commissioner Julie Brill isn’t surprised Rockefeller is watching Facebook closely, she told us after the hearing. “It’s such a large player on the Internet with so much activity on the Internet, I think that it’s only natural that people would want to look at Facebook’s role with respect to privacy and children.” Members will vote on the nominees at a forthcoming committee markup at a time and date which has yet to be determined.
Leibowitz touted the agency’s recent settlement with Google as an example of its ability to rein in the privacy missteps of Internet companies. The company agreed to the settlement after the FTC decided Google used deceptive tactics and betrayed its own privacy promises to consumers during the launch of its Buzz social network. The final agreement requires Google to submit to third-party privacy audits for all its current and future services for the next 20 years, and pay $16,000 in civil fines for any violations of the agreement.
Rockefeller said the most efficient way to enforce privacy is to implement and enforce a Do-Not-Track button. Leibowitz and Ohlhausen agreed it’s important that consumers have real choice and that the concept of an Internet Do-Not-Track button has received lots of support from the advertising industry. “Most Internet advertisers recognize that the sky won’t fall down if we give consumers choice,” Leibowitz said. He told Rockefeller that the agency promotes a voluntary Do-Not-Track mechanism, but “if we don’t see more progress by industry, your legislation will move forward and I am happy to work with you,” Leibowitz said.
"Consumers’ preferences must be respected and I think that there is progress in the area,” Ohlhausen said. “I would be interested in talking to the FTC staff about the feasibility of a one click option.” In July, President Barack Obama nominated Ohlhausen, a Republican, to replace FTC Commissioner William Kovacic, whose term expired in September. The 11-year FTC staff veteran and online privacy expert at the Washington law firm of Wilkinson Barker said her experiences have “broadened my understanding of the Commission’s role and capabilities."
Sen. Mark Pryor, D-Ark., prodded Leibowitz and Ohlhausen about their position on privacy protections and regulations for teens. “In addition to children under 13 I believe teens also face challenges in the online world,” said Pryor. “And that sort of raises the questions about what [are] the core components of meaningful privacy regulation of teens.”
The FTC is very concerned about privacy of teens, particularly on social networks, Leibowitz told Pryor. The commission is reviewing comments on its proposed revisions to the Children’s Online Privacy Protection Act (COPPA) rules. The agency is also preparing to finalize its draft privacy report “by the end of the year’ and is preparing a new study on mobile applications for 2012, he said. “Teens raise distinct issues,” said Ohlhausen. “It is important to take a close look at the issues and make sure they have a good understanding about what data is being collected and how it is being used,” she told committee members.