FTC Report Calls for Stronger Online Privacy

March 26, 2012 Updated: September 29, 2015

Companies collect and share information about their customers in many ways, some of which are invisible to the customers. The Federal Trade Commission issued a report on March 26 in which it criticized current privacy practices.

The report, “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers,” said privacy and transparency should be the default for online data collection about individuals.

The FTC said it does not intend to make any new rules, except some for children, but wants business to self-regulate, and Congress to pass some limited enforceable laws.

The individual should be in charge of what an Internet service provider or information broker knows about him, according to the FTC. Users of online services should have clear, short, opt-in or opt-out statements that allow them to give or withhold their personal data. For example, Internet browsers should offer an easily visible “do not track” icon, so that a user can choose not to have his online activity recorded.




“Early in the 20th century, Justice Brandeis, one of the intellectual fathers of the Federal Trade Commission, called the right to privacy “the most comprehensive of rights and the right most valued by civilized men,” said FTC chairman Jon Leibowitz, in a press statement on the release of the report.

“Justice Brandeis could not have imagined phones that keep track of where we are going, search engines that predict what we’re thinking, advertisers that monitor what we’re reading, and data brokers who maintain dossiers of every who, what, where, when, and how of our lives,” wrote Leibowitz.

The 57-page report praised those companies that already protect the privacy of consumers. The report said that legislation and enforcement of privacy principles will “level the playing field” for those companies that already protect privacy. It said small businesses that collect non-sensitive data should be exempt from regulation. It also said companies that adopt good privacy practices will inspire trust in their customers, and thereby have greater success.

The report recommendations were based on the 40-year-old Fair Information Practice Principles, it said. They are privacy, choice, and transparency. Privacy protection and choice should be designed into every product, according to the FTC. For example, when downloading a mobile application, a person should also get a short, readable privacy statement about what information the app will collect. He should be able to choose a high level of privacy and still use the app.

Greater transparency would mean “companies should disclose details about their collection and use of consumers’ information, and provide consumers access to the data collected about them,” said the report. Now people are often unaware of the data information brokers have about them, and have no way to see it.

The FTC also recommended legislation and enforcement, saying, “The Commission now also calls on Congress to consider enacting baseline privacy legislation and reiterates its call for data security legislation.”