On August 11, 2022, the Federal Trade Commission (FTC) issued an Advance Notice of Proposed Rulemaking (ANPR) and announced it was exploring a rulemaking process to “crack down on harmful commercial surveillance” and lax data security. The agency defines commercial surveillance as “the collection, aggregation, analysis, retention, transfer, or monetization of consumer data and the direct derivatives of that information.”
The FTC View
The FTC has not released any proposed rules but seeks public comment on the harms stemming from commercial surveillance and whether new rules are needed to protect consumer data privacy. As part of the ANPR, and before setting out a host of questions for public comment, the FTC offers its take on the opaque ecosystem surrounding the collection of mobile data and personal information (which the FTC asserts is often done without consumers’ full understanding). The FTC discusses the subsequent sharing and sale of information to data aggregators and brokers that then sell data access or data analysis products to marketers, researchers, or other businesses interested in gaining insights from alternative data sources. The agency argues that based on news reporting, published research and its own enforcement actions, the benefits of the current consumer data marketplace may be outweighed by “harmful commercial surveillance and lax data security practices,” thus potentially requiring rules to protect consumers and to offer more regulatory clarity to companies beyond the FTC’s case-by-case enforcement. As FTC Chair Lina Khan said in her statement accompanying the ANPR: “[T]he growing digitization of our economy—coupled with business models that can incentivize endless hoovering up of sensitive user data and a vast expansion of how this data is used —means that potentially unlawful practices may be prevalent, with case-by-case enforcement failing to adequately deter lawbreaking or remedy the resulting harms.”
FTC Invitation for Comment
After describing the FTC view on the issues, the Commission invites public comment on whether it should implement new trade regulation rules or other regulatory alternatives concerning the ways companies (1) collect, aggregate, protect, use, analyze, and retain consumer data, as well as (2) transfer, share, sell, or otherwise monetize that data in ways that are unfair or deceptive. Within the ANPR are a myriad of questions (too numerous to list here; a fact sheet is available here and the press release also offers a breakdown). Though, perhaps the multimillion-dollar questions asked by the agency are: Which kinds of data should be subject to a potential privacy rule? To what extent, if at all, should a new regulation impose limitations on companies’ collection, use, and retention of consumer data? Continue Reading
