Commentary Addressing Risks and Opportunities Through the Lifecycle of Data, Technology, Advertising and Innovation

Data Counsel

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Earlier this week, Maureen Olhausen, the Federal Trade Commission&rsquo;s newest commissioner, shared her perspective on &ldquo;The Federal Role in Privacy: Getting It Right&rdquo; in a discussion at the Hudson Institute, a conservative-leaning think tank in Washington, DC. Her straightforward comments indicated she intends to take a cautious and holistic approach toward any expansion of the FTC&rsquo;s role in safeguarding consumer privacy &ndash; an approach informed by her 11 years of service at FTC, which she noted is more experience than any of her fellow commissioners.&nbsp;&nbsp;That experience, which culminated in heading the Office of Policy Planning from 2004 to 2008 under Republican Chairwoman Deborah Platt Majoras, informed her broad view of FTC&rsquo;s work on competition and economics, in addition to consumer protection. Among the views Olhausen expressed were:
<ul>
<li>The core of the FTC&rsquo;s mission is challenging deception, particularly fraud, and &ldquo;should remain so.&rdquo;</li>
<li>Section 5 of the FTC Act &ndash; the &ldquo;heart&rdquo; of the Commission&rsquo;s authority &ndash; is simple, but flexible and effective, as demonstrated by the recent settlement with DesignerWare, LLC and several rent-to-own stores for conduct that violated both the deceptive and unfairness prongs, and by the over one hundred spam and spyware cases and thirty-some data security cases brought by the FTC.</li>
<li>She&rsquo;s skeptical of calls for legislation to grant the FTC additional authority to protect privacy.&nbsp; She criticized the Commission&rsquo;s March <a href="http://ftc.gov/os/2012/03/120326privacyreport.pdf">report</a> for not specifying what harms Section 5 can&rsquo;t reach and for not considering the impact of reducing &ldquo;information flow&rdquo; in the marketplace, citing ABA Antitrust Section comments on the latter point.</li>
<li>Nonetheless, she supports a uniform federal law for data security and breach notification because there are gaps that could be closed and because a single standard would be better for company compliance and consumer expectations than the current patchwork of state laws. A federal law must be carefully crafted to provide reasonable precautions for safeguarding various types of data to avoid imposing undue costs not justified by consumer benefits.</li>
<li>In addition to using its enforcement authority, the FTC must continue to educate business and consumers and conduct/spur research to inform its policy development.</li>
</ul>
Olhausen&rsquo;s point of view on the adequacy of FTC&rsquo;s current authority would seem to be at odds with that of many privacy advocates in Congress, including Senate Commerce Committee Chairman John Rockefeller, who has <a href="http://commerce.senate.gov/public/index.cfm?p=PressReleases&amp;ContentRecord_id=971b9c02-b6a3-462f-933a-0ec0bd9c4c24">a bill to empower</a> the FTC to write and enforce &ldquo;Do-Not-Track&rdquo; online regulations and who recently <a href="http://commerce.senate.gov/public/index.cfm?p=PressReleases&amp;ContentRecord_id=a42a865a-be30-4171-8278-86ee0a8c76fb&amp;ContentType_id=77eb43da-aa94-497d-a73f-5c951ff72372&amp;Group_id=4b968841-f3e8-49da-a529-7b18e32fd69d">opened an investigation</a> into the business practices of data brokers. <a href="http://commerce.senate.gov/public/?a=Files.Serve&amp;File_id=3bb94703-5ac8-4157-a97b-a658c3c3061c">Rockefeller&rsquo;s October 9 letter</a> to 11 industry CEOs quotes the FTC report (regarding shortcomings of industry self-regulation) that Olhausen criticized and asks a series of detailed questions about data sources, collection mechanisms, product offerings, FCRA compliance, consumer access, etc. As information collection and targeted marketing become even more sophisticated, technology evolves &ndash; particularly with mobile devices, and data breaches increase, these differing points of view will almost certainly come to a head in the next Congress. How they are resolved - as with taxes, spending and so many other issues - may ultimately depend on what happens at the ballot box on November 6.
<a href="http://www.hudson.org/index.cfm?fuseaction=hudson_upcoming_events&amp;id=974">Listen to the audio of Olhausen&rsquo;s presentation</a>.

FTC’s Olhausen: Privacy Through a Competition Lens