FTC Steps Up to Defend Consumers Against Illegal Data Collection, Sharing

The US Federal Trade Commission has issued a notice announcing that the agency is committed more than ever to fully enforce the law against illegal use and sharing of consumer data.

The FTC says there is a behind-the-scenes irony about the way people share data in exchange for services.

Consumers using online services choose to part with personal or even sensitive information that they would otherwise not disclose even to family, friends, or colleagues, the Commission notes.

Yet the entities that collect this data often participate in the shadowy, profit-driven ad tech and data broker ecosystem, says the watchdog.

“When consumers use their connected devices – and sometimes even when they don’t – these devices may be regularly pinging cell towers, interacting with WiFi networks, capturing GPS signals, and otherwise creating a comprehensive record of their whereabouts,” the FTC explains. “This location data can reveal a lot about people, including where we work, sleep, socialize, worship, and seek medical treatment. While many consumers may happily offer their location data in exchange for real-time crowd-sourced advice on the fastest route home, they likely think differently about having their thinly-disguised online identity associated with the frequency of their visits to a therapist or cancer doctor.”

The Commission says the combination of location data and user-generated health data creates a new frontier of potential harms to consumers. For example, in a 2014 study, the FTC reported that data brokers used data to make sensitive inferences, such as categorizing a consumer as “Expectant Parent.”

The misuse of data also exposes consumers to criminals who may use location or health data to facilitate phishing scams or commit identity theft, or stalkers and other criminals looking to to inflict physical and emotional injury.

“The exposure of health information and medical conditions, especially data related to sexual activity or reproductive health, may subject people to discrimination, stigma, mental anguish, or other serious harms,” the Commission says. “Those are just a few of the potential injuries – harms that are exacerbated by the exploitation of information gleaned through commercial surveillance.”

The FTC is therefore committed to using the full scope of its legal authorities to protect consumers. It pledges to “vigorously” enforce the law if it finds illegal conduct that exploits Americans’ data, and offers guidelines that companies should consider when collecting consumer information.

For example, the FTC vows to keep close tabs on claims that data is ‘anonymous’ or ‘has been anonymized.’ Research shows it is possible to uniquely identify 95% of a dataset of 1.5 million individuals using four location points with timestamps, the agency notes.

“Companies that make false claims about anonymization can expect to hear from the FTC,” it warns.

The FTC also plans to double down on online entities that over-collect, indefinitely retain, or misuse consumer data.