Important Comments by the FTC Chair and the Consumer Protection Chief to the NY Times Today

http://mediadecoder.blogs.nytimes.com/2010/01/11/ftc-has-internet-gone-beyond-privacy-policies/

Some key points excerpted here:

“Previous commissions had looked at privacy under the framework of whether consumers were harmed, and with the basis that companies must advise consumers about what they’re doing and obtain their consent, Mr. Leibowitz said. But companies “haven’t given consumers effective notice, so they can make effective choices,” he said.

Advise-and-consent “depended on the fiction that people were meaningfully giving consent,” Mr. Vladeck said. “The literature is clear” that few people read privacy policies, he said.

While first-party uses of data were generally within consumers’ reasonable expectations, he said, more questions arose around data brokers, data aggregators, social network, cloud computing and mobile marketing. (These subjects will be part of a Jan. 28 F.T.C. roundtable on privacy, held in Berkeley, Calif.)

There was also a problem with companies conflating consent, Mr. Vladeck said, for example, if a Web site asks people to agree to a transaction and to letting their data be sold in one form. “I don’t necessarily think that’s fair,” Mr. Vladeck said.

On the other hand, Mr. Leibowitz said, “if you require very strict multiple notices, consumers may tune that out,” Mr. Leibowitz said.

“Philosophically, we wonder if we’re moving to a post-disclosure era and what that would look like,” Mr. Vladeck said. “What’s the substitute for it?”

He said the commission was still looking into the issue, but it hoped to have an answer by June or July, when it plans to publish a report on the subject. Mr. Leibowitz gave a hint as to what might be included: “I have a sense, and it’s still amorphous, that we might head toward opt-in,” Mr. Leibowitz said.

He said he wasn’t yet sure if that would be the case or what that might look like. “