March 26, 2012 at 1:21 PM ET
The Federal Trade Commission is asking Congress to pass legislation to better protect consumers' digital data from being misused or shared without their knowledge.
In a new report released Monday, the agency also calls on businesses to step up efforts to protect consumer privacy, but is not counting on private industry to do so. The FTC's recommendations come in the wake of months of controversy over the data-sharing features of many mobile apps, data that includes, in some cases, location, text messages, photos and contacts.
"In today’s world of smartphones, smart grids, and smart cars, companies are collecting, storing, and sharing more information about consumers than ever before," the FTC said in the report. "Although companies use this information to innovate and deliver better products and services to consumers, they should not do so at the expense of consumer privacy."
"If companies adopt our final recommendations for best practices -- and many of them already have -- they will be able to innovate and deliver creative new services that consumers can enjoy without sacrificing their privacy," said Jon Leibowitz, FTC chairman.
The FTC wants companies to make privacy "the 'default setting' for commercial data practices," to give consumers "greater control over the collection and use of their personal data through simplified choices and increased transparency."
"We are confident that consumers will have an easy to use and effective Do Not Track option by the end of the year because companies are moving forward expeditiously to make it happen and because lawmakers will want to enact legislation if they don't," Leibowitz said.
In the report, "Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers," the FTC wants Congress to consider "general privacy legislation, data security and breach notification legislation, and data broker legislation," the agency said in a release about the report.
Among the FTC's specific recommendations:
- Privacy by design: Companies should build in consumers' privacy protections at every stage in developing their products. These include reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy.
- Simplified choice for businesses and consumers: Companies should give consumers the option to decide what information is shared about them, and with whom. This should include a Do-Not-Track mechanism that would provide a simple, easy way for consumers to control the tracking of their online activities.
- Greater Transparency: Companies should disclose details about their collection and use of consumers' information, and provide consumers access to the data collected about them.
The FTC said it will focus on these five areas during the year ahead:
- Do-not-track policies: The FTC "commends the progress made in this area: browser vendors have developed tools to allow consumers to limit data collection about them, the Digital Advertising Alliance has developed its own icon-based system and also committed to honor the browser tools, and the World Wide Web Consortium standards-setting body is developing standards." The FTC says it will "work with these groups to complete implementation of an easy-to-use, persistent, and effective Do Not Track system."
- Mobile privacy: The FTC urges companies offering mobile services to work toward improved privacy protections, including disclosures." The agency plans a May 30 workshop "to address how mobile privacy disclosures can be short, effective, and accessible to consumers on small screens."
- Data brokers: Data brokers should "make their operations more transparent by creating a centralized website to identify themselves, and to disclose how they collect and use consumer data. In addition, the website should detail the choices that data brokers provide consumers about their own information."
- "Large platform providers": The FTC cites privacy concerns about the "extent to which platforms, such as Internet Service Providers, operating systems, browsers and social media companies, seek to comprehensively track consumers' online activities. The FTC will host a public workshop in the second half of 2012 to explore issues related to comprehensive tracking."
- Code of conduct: The agency says it will work with the Department of Commerce and "industry stakeholders to develop industry-specific codes of conduct. To the extent that strong privacy codes are developed, when companies adhere to these codes, the FTC will take that into account in its law enforcement efforts. If companies do not honor the codes they sign up for, they could be subject to FTC enforcement actions."
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