FTC reviews rules to corral data collection from tech companies


WASHINGTON — Whether it’s the fitness tracker on your wrist, the “smart” appliances in your home, or the latest kids’ fashion that’s going viral in online videos, they all produce a wealth of personal data for big tech companies.

How this data is used and protected has sparked growing public concern and outrage from officials. And now, federal regulators are considering drafting rules to crack down on what they call harmful commercial surveillance and lax data security.

The Federal Trade Commission announced the initiative Thursday, seeking public comment on the effects of companies collecting data and the potential benefits of new rules to protect consumer privacy.

The FTC defines commercial surveillance as “the activity of collecting, analyzing, and profiting from information about individuals.”

In Congress, bipartisan condemnation of the data power of Meta – the parent company of Facebook and Instagram – Google and other tech giants that have made their fortunes aggregating consumer information used by online advertisers , has brought national data privacy legislation to its closest point ever. .

Across the country, parental concern has intensified over the impact of social media on children. Frances Haugen, a former Facebook data scientist, stunned Congress and the public last fall when she revealed internal company research showing apparent serious harm to some Instagram teens. These revelations were followed by senators who questioned the leaders of YouTube, TikTok and Snapchat about what they were doing to keep young users safe in the wake of suicides and other harm caused to teenagers by their parents due to of their use of the platforms.

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Democratic members of the FTC said Thursday it was imperative that Congress pass new legislation, but the agency was taking action in the meantime by issuing notice of the proposed rules.

“Mass surveillance has increased the risks and stakes of data breaches, deception, manipulation, and other abuses,” the FTC said.

Agency officials noted that the FTC has filed hundreds of lawsuits against companies over the past two decades for breaches of privacy and data security. These included cases involving the sharing of health-related data with third parties, the collection and sharing of sensitive television viewing data for targeted advertising, and the failure to put measures in place. adequate security safeguards to protect sensitive data such as social security numbers.

However, the officials said, the FTC’s ability to deter illegal behavior is limited because it generally lacks the authority to seek financial penalties for initial violations of the law. That could change if comprehensive privacy legislation is approved by Congress.

“Companies are now collecting personal data about individuals on a massive scale and in an impressive array of contexts,” FTC Chairman Lina Khan said in an online news conference. “Our goal today is to begin to build a strong public case for whether the FTC should issue rules regarding business surveillance and data security practices, and what those rules should potentially look like.”

“We’re very, very excited to hear from the public,” Khan said.

Topics of interest could include how companies use algorithms and automated systems to analyze the information they collect, as well as the potential effects of various data practices.

Khan, who was a vocal critic of Big Tech as a law professor, was appointed by President Joe Biden last year to head the FTC – an independent agency that governs competition and consumer protection as well as digital privacy.

The proposed rulemaking passed by a 3-2 vote by the FTC’s five commissioners. Khan and the other two Democrats voted to publish it, while the two Republicans opposed it.

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