Monday, September 27, 2010

FTC Hints at Findings in Upcoming Privacy Report

An official at the Federal Trade Commission on Friday said that the current methods of notifying consumers when their data is being collected are inadequate.

The coments by Maneesha Mithal, the FTC’s associate director of the Division of Privacy and Identity Protection, are an indication of likely conclusions of the agency’s wide-ranging review of privacy regulations. The agency’s revised privacy guidelines are expected to be released later this year.

Ms. Mithal said the FTC’s report would recommend that consumers must be notified at the time that their data is collected – such as when tracking technology is installed on a computers machine by a website or an online advertiser. The current practice of notifying consumers of tracking in privacy policies has not worked, she said.

“Our whole report is about consumer control,” said Ms. Mithal, said at a Washington D.C. conference held by the Online Trust Alliance, an industry group dedicated to tackling privacy and security issues online. Her comments were reported by one of the forum attendees, Christopher Wolf, a director of the privacy and information management group at law firm Hogan Lovells, and confirmed by another attendee. The FTC did not immediately respond to a request for comment.

The Wall Street Journal’s What They Know series has documented the new, cutting-edge uses of the tracking technology used to create profiles of consumers’ habits. The FTC is expected to release a report this year detailing it findings about the burgeoning data industry and its recommendations on how to protecte consumer privacy. Congress is also considering legislation that could place new limits on the data collection industry.

The online advertising industry has argued that the data it collects about users is innocuous becase it does not identify users by name.

However, in her remarks, Ms. Mithal also said that the distinction between personally identifiable data and other types of consumer data is blurring. She also said that the report would also recommend that privacy be part of the design of new technology that involves a user’s information .

Still, it’s not clear whether the FTC’s report will create new restrictions on the data collection industry. One FTC watcher, Berkeley Law School professor Chris Jay Hoofnagle, says he expects FTC report to suggest that Congress needs to act to protect consumers. “I don’t think the FTC is going to announce rules. I think they will call upon Congress to direct them to make rules,” he said.

Follow Jennifer Valentino-DeVries on Twitter @jenvalentino, and for more on digital privacy, follow @whattheyknow.

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