Federal Trade Commission

On March 5, Senators Ed Markey (D-MA) and Richard Blumenthal (D-CT) introduced the Kids Internet Design and Safety (KIDS) Act.  The bill, which covers online platforms directed to children and teenagers under 16 years old, aims to curb the time spent by these minors on such platforms and could dramatically affect advertising and influencer content on kids’ channels.

The bill would prohibit platforms directed to minors from implementing features that encourage users to spend more time online, such as “auto-play” settings that automatically load a new video once the selected one finishes playing, push alerts that encourage users to engage with the platform, and the display of positive feedback received from other users.  It would also ban badges or other visual incentives and rewards based on engagement with the platform.

Additionally, the KIDS Act would prohibit platforms from recommending or amplifying certain content involving sexual, violent, or other adult material, including gambling or “other dangerous, abusive, exploitative, or wholly commercial content.”  The bill would require the implementation of a mechanism for users to report suspected violations of content requirements.
Continue Reading New Bill Seeks to Impose Design Restrictions on Kids’ Online Content and Marketing

On February 12, 2020, Senator Kirsten Gillibrand (D-NY) announced a plan to create a new Data Protection Agency through her proposed legislation, the Data Protection Act of 2020 (S.3300).

Under the proposal, the new agency would replace the Federal Trade Commission (FTC) as the “privacy cop on the beat.”  As such, the FTC’s current authority in the privacy space—including its ability to draft guidelines, conduct studies, and issue implementing regulations for certain federal privacy laws, would be transferred to the new agency.

As opposed to the Online Privacy Act, a bill introduced by Representatives Anna Eshoo (D-CA-18) and Zoe Lofgren (D-CA-19) that also would create a new privacy agency, Sen. Gillibrand’s bill would not create a new omnibus federal privacy law.  Instead, it is focused on the creation of the Data Protection Agency and its rulemaking authority.  However, various aspects of the new agency’s authority provide valuable insights into what privacy regulation at the federal level might look like under the bill.
Continue Reading Sen. Kirsten Gillibrand Proposes New Digital Privacy Agency

On January 30, House Rep. Kathy Castor (D-FL) introduced the Protecting the Information of our Vulnerable Children and Youth (“PRIVCY”) Act, a bill that promises to be a significant overhaul of the Children’s Online Privacy Protection Act (“COPPA”).

Currently, COPPA applies only to personal information collected from children under 13 years old.  The PRIVCY Act would greatly expand COPPA’s scope by making any personal information – including biometric, geolocation, and inferred information, whether collected from the child or not – subject to the law’s requirements.  It also brings a new group of “young consumers” – individuals aged 12 to 18 years old – under the law’s umbrella.  The PRIVCY Act would obligate online sites and services that have actual or constructive knowledge that they “process” personal information about children or young consumers to provide notice to, and obtain consent from, those children’s parents or from those young consumers.  The bill also provides for rights to access, correction, and deletion of children’s and young consumers’ personal information, and it imposes limits on the ability of operators to disclose personal information to third parties.

Additionally, the privacy bill would completely repeal COPPA’s safe harbor provision, which enables covered operators to rely on a safe harbor if their privacy practices have been certified by FTC-approved organizations.  Currently, seven safe harbor organizations have been approved by the FTC.
Continue Reading Kids’ Privacy Bill Allowing for Private Suits Introduced in House

On December 18, 2019, staffers on the House Energy and Commerce Committee circulated a draft of a bipartisan privacy bill.  The draft is currently unnamed and unfinished, but it lays out a comprehensive framework that expands both individuals’ rights to their data and the FTC’s enforcement role over digital privacy.  Rep. Cathy McMorris-Rodgers (R-Wash.) and Rep. Jan Schakowsky (D-Ill.) have been particularly involved in working on the bill.

“We welcome input from all interested stakeholders and look forward to working with them going forward,” an Energy and Commerce spokesperson told The Hill.  “This draft seeks to protect consumers while also giving data collectors clear rules of the road.  It reflects many months of hard work and close collaboration between Democratic and Republican Committee staff.”

The draft bill echoes many of the provisions in the Consumer Online Privacy Rights Act (COPRA) introduced last month by Democratic senators.  However, unlike COPRA, the bill is silent on two notable issues: whether individuals have a private right of action to assert violations and whether the bill would preempt state laws. 
Continue Reading House Energy and Commerce Committee Circulates Draft Privacy Bill Expanding FTC Authority

On November 26, 2019, a group of Democratic senators introduced the Consumer Online Privacy Rights Act (COPRA).  This comprehensive privacy bill—sponsored by Senators Maria Cantwell (D-WA), Brian Schatz (D-HI), Amy Klobuchar (D-MN), and Ed Markey (D-MA)—would grant individuals broad control over their data, impose new obligations on data processing, and expand the FTC’s enforcement role over digital privacy.

“In the growing online world, consumers deserve two things: privacy rights and a strong law to enforce them,” Senator Cantwell explained. “They should be like your Miranda rights—clear as a bell as to what they are and what constitutes a violation.”

Here are some key elements of the bill:
Continue Reading Democratic Senators Introduce the Consumer Online Privacy Rights Act

On October 23, 2019, the European Commission (“Commission”) published its Report on the third annual review of the EU-U.S. Privacy Shield (“Privacy Shield”) (the Report is accompanied by a Staff Working Document).  The Report “confirms that the U.S. continues to ensure an adequate level of protection for personal data transferred under the Privacy Shield” (see also the Commission’s Press Release).  The Report welcomed a number of improvements following the second annual review, including efforts made by U.S. authorities to monitor compliance with the framework, as well as key appointments that have been made in the last year.  The Commission in particular noted the appointment of Keith Krach to the position of Privacy Shield Ombudsperson on a permanent basis, filling a vacancy that had been noted in previous reviews.  The Report also provided a number of recommendations for further improvement and monitoring.

Recognizing that, in its third year, Privacy Shield has “moved from the inception phase to a more operational phase,” the Report placed particular emphasis on the effectiveness of the “tools, mechanisms and procedures in practice.”  Not only has the number of Privacy Shield certifications exceeded 5,000 companies — eclipsing in three years the number of companies that had registered to the Safe Harbor Framework in its nearly 15 years of existence — the Report also noted that “an increasing number of EU data subjects are making use of their rights under the Privacy Shield and that the relevant redress mechanisms function well.”

As with prior reviews, the Commission sought feedback from trade associations, NGOs, and certified companies, and  addressed the functioning of (i) the framework’s commercial aspects, and (ii) U.S. authorities’ access to personal data.Continue Reading Privacy Shield Third Annual Review

On October 22, 2019, the Federal Trade Commission reached a proposed settlement with the developer of three so-called “stalking” apps that enabled purchasers of the app to secretly monitor the mobile devices on which they were installed.  Developer Retina-X Studios, LLC and its owner James N. Johns marketed the three apps—MobileSpy, PhoneSheriff, and TeenShield—as a means to monitor children and employees by sharing detailed information about these individuals’ smart phone activities, including their text messages and GPS locations.  The FTC complaint alleges that the developer failed to ensure that the apps would be used for legitimate and lawful purposes, did not secure personal information collected from children and other users, and misrepresented the extent to which that information would be kept confidential.

While the FTC settlement represents its first case against developers of tracking apps, the complaint’s allegations rely on provisions of the FTC Act that are broadly applicable to companies that collect, store, and/or monitor users’ personal information, as well as the Children’s Online Privacy Protection Act (“COPPA”): 
Continue Reading FTC Reaches Settlement with Developer of Tracking Apps

On September 3, 2019, the Federal Trade Commission (“FTC”) announced settlement agreements with five companies for alleged false claims of certification under the EU-U.S. and Swiss-U.S. Privacy Shield frameworks (collectively, “Privacy Shield”).  These settlements indicate that the FTC is continuing to actively enforce Privacy Shield commitments, as it has done
Continue Reading FTC Settles Enforcement Actions Relating to Privacy Shield Certifications

You may have heard the phrase “dark patterns” as shorthand for various user interfaces designed to influence users’ decisions. They can range from the perfectly innocent to the unethical, and even illegal. Whatever the form, dark patterns have recently drawn attention from the mainstream press.

Dark patterns are coming out from the shadows. And when that happens, class action lawyers can’t be far behind.Continue Reading Dark Patterns: What They Are and What You Should Know About Them

On May 8, 2019, the Federal Trade Commission (FTC) announced its first three cases that exclusively enforce the Consumer Review Fairness Act (CRFA).  Enacted in December 2016 to protect consumers’ ability to share their honest reviews, the CRFA prohibits companies from using form contracts that bar consumers from writing negative
Continue Reading The FTC Announces Consumer Review Fairness Act Enforcement Actions