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A Cry for Regulation

A bizarre thing happened at the FTC’s second Exploring Privacy Workshop which was held in Berkeley this week.  Many of the web’s most popular companies – several of whom were featured panelists – were seen publicly urging the FTC to regulate the web.  As the day-long workshop progressed, it became clear that we have reached a point in the Internet’s evolution where regulatory guidance is critical.  For a company whose very business model relies on data mining of some sort – predictability regarding data security and online privacy rules is fast becoming a need, not a want.

The FTC understands these concerns and has been particularly responsive during the last few months, reaching out to stakeholders – web companies, academics and consumer advocacy organizations – all of which were well represented at last week’s workshop.  Based on the day’s discussions (you can see a replay of my live blog here), it became clear that participants were falling into two camps – one which urges clear guidelines and self-regulation, the other which wants more mandates and enforcement.  Then there’s the FTC’s current view – as discussed in this recent New York Times interview with current FTC Chairman Jon Leibowitz and David Vladek, the head of the FTC’s Bureau of Consumer Protection.

One thing everyone does agree on is the need for better and more consumer education – particularly around data flows.  With this type of education, the need to regulate data security and online privacy so stringently may be alleviated. For instance, much has been made during this workshop and in previous discussions, about the failure of privacy notices.  I wonder however, how much of that failure is because consumers simply don’t understand the significance of an opt-in or opt-out, especially when it comes to their personal or identifiable data.

Obviously, there’s a joint role here for all stakeholders – an educated consumer is your best customer (to paraphrase the Syms slogan).  Companies should be thinking about ways to partner with regulators on public education initiatives – just take a look at what the alcohol industry has done by partnering with state AGs on underage drinking awareness campaigns.

The FTC’s third Exploring Privacy workshop will be held on March 17th in Washington DC in March.  Here are the questions posed by the FTC in anticipation of this final workshop:

  • How can we best achieve accountability for best practices or standards for commercial handling of consumer data?  Can consumer access to and correction of their data be made cost effective?  Are there specific accountability or enforcement regimes that are particularly effective?
  • What potential benefits and concerns are raised by emerging business models built around the collection and use of consumer health information?  What, if any, legal protections do consumers expect apply to their personal health information when they conduct online searches, respond to surveys or quizzes, seek medical advice online, participate in chat groups or health networks, or otherwise?
  • Should “sensitive” information be treated or handled differently than other consumer information?  How do we determine what information is “sensitive”?  What standards should apply to the collection and uses of such information?  Should information about children and teenagers be subject to different standards and, if so, what should they be?
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