Consumer advocates press FTC for action on data and privacy rules

Consumer advocates urged the Federal Trade Commission (FTC) on Thursday to press forward with crafting rules to protect Americans from harmful commercial data and privacy practices. 

“Just because the industry has become accustomed to operating without any data protection rules doesn’t mean we should continue down that path,” Caitriona Fitzgerald, Deputy Director of the Electronic Privacy Information Center, said during an online meeting held by the agency. “It’s time to change the business practices that are harming people online every minute of every day. The FTC must act to change the course.”

Harlan Yu, executive director of nonprofit Upturn, said the agency had an important role to play in preventing discriminatory uses of data — including commercial practices such such as tenant land screening that discriminate because they “collect and use eviction, credit, and criminal records that are products of unjust and racist systems” and hiring processes that may discriminate against marginalized groups, such as disabled applicants. 

The meeting was held to get public feedback as the agency weighs developing security and data privacy rules — a potential expansion of its de facto role as the federal government’s privacy watchdog. 

“This public input will directly inform our analysis and thinking about how the commission proceeds,” FTC Chair Lina Khan said in opening remarks. 

The agency announced in August it was considering creating such rules.

The FTC has long used authority granted by its founding statute to take enforcement actions against individual businesses that engage in unfair or deceptive practices related to privacy and data security, although a 2021 Supreme Court decision significantly curtailed its ability to seek financial penalties through that route. The rule-making process being pursued by the agency now is more complex, and includes an investigatory period to help the agency determine the harms in this space and whether rules are needed to address them.

The agency has already received more than 60 written public comments on the potential rulemaking. The current comment period will end October 21, after which agency staff will analyze the responses and — if they determine crafting the rules is appropriate — release a notice of proposed rulemaking before a final rule is established. 

Commissioner Rebecca Slaughter said moving forward with the rule-making approach is “important for the FTC institution” because it represents the bookend of an era where the agency declined to use all of its authority to pursue consumer protections. 

The panels during the event Thursday featured industry representatives and consumer advocates who addressed issues including behavioral advertising, consumer choice limitations, and algorithmic discrimination. 

The FTC’s two Republican Commissioners voted against exploring the rule-making process in August, pointing to a bipartisan federal privacy proposal being considered by Congress. 

However, House Speaker Nancy Pelosi’s recent criticism of the bill suggests it is unlikely to get a floor vote in time to pass before legislative activity is disrupted by the midterm elections. 

“I support strong federal privacy legislation, but until there’s a law on the books the commission has a duty to use all the tools we have to investigate and address unlawful behavior in the market,” Slaughter said.