FTC's Rich Plugs Legislation, Pledges to Protect Privacy

Intel, Microsoft execs say companies will need to take greater role given volume of data
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FTC's Jessica Rich, director of the FTC's Bureau of Consumer Protection, put in a plug for data privacy and security legislation Tuesday, but said that regardless the FTC will continue to work hard to inform and protect consumers.

That includes new online parental guidelines, a report on data brokers and a 2014 agenda focused on big data, mobile, and protecting sensitive data.

In a speech at a National Cyber Security Alliance kick-off event for Data Privacy Day Tuesday (Jan. 28), Rich outlined the clear benefits of data collection and use, from providing discounts on purchases to social networking, saying it had made life easier in a myriad of ways.

But it was the serious consequences about how that data could be accessed and for what purposes that had the FTC treating every day as Data Privacy Day, she said. The same information that allowed someone to track their fitness or entertain themselves, or get a job or do their banking remotely, can be collected and sold to data brokers, aggregated into profiles that may paint an inaccurate portrait and can affect their ability to get a loan or insurance, or be resold to third—or fourth—parties over which they have no control.

She conceded that data brokers have long existed in the offline world, a point online data brokers make when facing criticism in Washington. But she said the rise of the Internet and social media have raised the stakes and allowed for new ways to slice and dice and aggregate and share that info.

She said that is why she and  others strongly back new privacy and data security legislation to protect consumers and provide "clear rules of the road." But she said regardless of whether legislation passes—a long shot in this divided Congress—there was much that could be done to protect consumers and the FTC was doing it via enforcement actions, workshops and outreach.

Rich announced the release of revised Netcetera guidelines for parents on helping their kids safely navigate online, with new sections on mobile aps, public WiFi security and text message spam.

Rich also said the FTC planned to release a report on data brokers in the coming months, an effort she suggested was meant to "shine a light" on the industry.

She said industry had a vital role to play in data protection and needed to step up with "real privacy protections" rather than "empty promises," and with investments in privacy as a key business strategy, which she said could pay dividends.

She pointed to a Web tool launched by data broker giant Acxiom that allows consumers to view a portion of their profiles. She said it was not perfect, but it was at least a step in the right direction.

At a panel session following Rich's speech, Brendon Lynch, chief privacy officer for Microsoft, said that with the explosion of data, a genii he suggested was not going back in the bottle, it would be increasingly incumbent on companies, rather than individuals, to protect privacy.

He cited stats showing that 90% of digital data currently in existence has only been around for a couple of years, and that by 2020, 26 billion internet-connected devices are expected to be in use, and even that might be an underestimate.

Factoring all that in, he said, the privacy focus needs to be more on how companies, rather than an "overreliance" on consumer notice and choice—insure appropriate use of that info, and the appropriate balance between the risk of misuse and the value to the individuals and society of that data.

Lynch said that a recent study from the company showed that 46% of those surveyed felt the "burden" of managing privacy fell on them, which he called another result of overreliance on notice and consent.

With the explosion of data, "autonomy needs to be delivered by different means," he said, adding that it was largely up to organizations to "assess the risk, weigh the value and make a decision."

As an example, he cited Microsoft's decision to make do not track the default setting on its new browser, something that has drawn strong criticism from online marketers.

Hoffman agreed that there are situations now where notice and choice are not as useful fair information practice principles as some others.

Hoffman emphasized accountability, including how consumers get access to data and redress if that data is incorrect, incomplete, or when its collection or use could have a "disproportionate" impact. "Distrust is the cancer that could kill the digital economy," he warned.

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