The Federal Trade Commission ("FTC") announced that it is exploring rules to address commercial surveillance and lax data security. The FTC seeks public comment on the harms stemming from commercial surveillance and whether new rules are needed to protect people's privacy and information.
Commercial surveillance is the business of collecting, analyzing, and profiting from information about people. The business of commercial surveillance can prompt companies to collect large quantities of consumer information, even though consumers only proactively share a small amount of this information. For example, companies reportedly surveil consumers while they are connected to the internet, including obtaining access to many aspects of the consumer's online activities and physical movements/location.
The FTC's concerns about commercial surveillance include:
- Children: Some surveillance-based services may
be addictive to children and lead to a wide variety of mental
health and social harms.
- Discrimination: There are concerns that the
algorithms that underlie commercial surveillance may be prone to
errors or bias which results in discrimination against consumers
based on legally protected characteristics like race, gender,
religion, and age, harming their ability to obtain housing, credit,
employment, or other critical needs.
- Condition for service: Some companies require consumers to sign up for surveillance as a condition for service. After consumers sign up, some companies change their privacy terms going forward to allow for more expansive surveillance.
For nearly 20 years, the FTC used its existing authority to bring many enforcement acts against companies for privacy and data security violations. The FTC is now exploring rules to: (1) establish clear privacy and data security requirements and (2) grant the FTC with authority to seek financial penalties for first-time violations.
The public will also have an opportunity to share their input on these topics, including during a virtual public forum on September 8, 2022.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.