FTC Developing Cross-Device Tracking Report From 2015 Workshop, Says Staff Attorney

Freeman said it's the first time he heard that an FTC report would come out of that November workshop, and practitioners had questioned whether anything would emerge from that event. The FTC didn't comment about when the report would be published. The workshop focused on companies tracking consumers across their various connected devices from laptops to smartphones to wearable gear, raising privacy and transparency questions about data collection, use, sharing and retention.

During the seminar on customer tracking and targeting for advertising, Cox described her agency's work in the area, including laws it enforces and workshops it has held. She said the commission recognizes benefits of targeted and online behavioral advertising, such as delivering ads that are relevant to consumers, providing a seamless experience to users and increasing competition. She said concerns involve the level of transparency for online behavioral ads and whether consumers know if information like geolocation data and persistent identifiers, which can be linked to individuals or their devices, is collected and shared.

The commission took enforcement action in recent years against several advertising companies such as Chitika that gave consumers an opt-out option that lasted for only 10 days, said Cox. In 2011, the commission settled with the company which Freeman said essentially committed a "programming error" by not testing the opt-out mechanism. Cox noted a 2011 settlement against ScanScout, which allegedly misrepresented data collection practices (see 1111090111); a 2012 settlement with ad network Epic Marketplace that allegedly used technology to collect data on thousands of out-of-network websites that consumers visited (see 1212060110); and action last year against Nomi Technologies, which settled allegations it misled consumers about their ability to opt out of in-store tracking (see 1504230036). This year, the commission issued warning letters to app developers who allegedly included software to detect audio signals via a device's mic as a way of monitoring consumers' TV use (see 1603170060).

Freeman, a former staff attorney in the Consumer Protection Bureau, summarized the FTC's 2009 staff report on self-regulatory principles for online behavioral or interest-based advertising. That report said data collection is ubiquitous and often invisible to consumers, who don't really understand it, he said. He also pointed to the FTC's Dec. 7 workshop on smart TVs that will focus on tracking consumers' viewing habits and delivering ads. He said the commission is working hard to understand the ecosystem, and provide the best possible comments. He said the issue around smart TVs is the "next big thing" and likely "bigger than anything we have seen."

On the Children's Online Privacy Protection Act, Freeman noted recent FTC COPPA actions such as the settlement with mobile ad company InMobi, which allegedly tracked the locations of consumers including children without adult consent (see 1606220036), and settlements with app developers LAI Systems and Retro Dreamer (see 1512170047). In 2013, a COPPA rule was revised to include persistent identifiers as part of personal information. Freeman said the FTC usually gives industry time to get it together before the agency brings cases, with fines that start relatively low against early violators.

Freeman said several attorneys general, including New York and Texas AGs, brought action in recent weeks against COPPA violators, possibly because states have lost patience with the FTC in bringing cases more quickly. In September, New York Attorney General Eric Schneiderman fined Hasbro, JumpStart Games, Mattel and Viacom $835,000 collectively in settling a case alleging that they allowed third parties to illegally track, collect and use personal data from children under 13 who visit those companies' popular websites (see 1609130029).