Building Consumer Trust in the Marketplace: Notes from the Final FTC Report on Privacy

Monday the FTC released their final report on consumer privacy. The title is “Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers”. There were several points the caught my attention:

Better Privacy Policies – Our community’s efforts to work on privacy policies and disclosures in mobile apps are productive steps. The FTC calls on companies to improve the transparency of their data practices. Specifically, “Privacy notices should be clearer, shorter, and more standardized to enable better comprehension and comparison of privacy practices.” (pg. 61)

Consumer Education – Our collective efforts to converse with our audience about privacy are in line with the FTC’s emphasis on the importance of consumer education. Specifically, “All stakeholders should expand their efforts to educate consumers about commercial data privacy practices.” (pg. 71)

Blurry lines about data collection are understandable – Our confusion over what defines “data collection” is valid, because the report admits that the line between Personally Identifiable Information and Non Personally Identifiable Information is blurring (pg. 19). I recommend that any developer who uses 3rd party analytics for performance metrics reads pages 18 through 23 of the report, and focuses on the concept of “Reasonable Linkability Standard”. If you disclose your data features in your privacy policy, ensure it’s not personally identifiable, and don’t sell the data downstream, you should be OK. But don’t rely on my interpretation, please read and decide for yourself.

Rebuild Consumer Trust – Understand that the FTC is concerned about the erosion of consumer trust in marketplaces where rapidly evolving data practices don’t allow the consumer to control their own information. Their goal is to build consumer trust with some baseline recommendations (and support of potential legislation), which will help promote future industry growth. Many feel that growth is fueled by innovation. The FTC says it’s a balance, and innovation without consumer confidence won’t work. (pg. 12)

Do Not Deceive – There is a dissenting opinion from Commissioner J. Thomas Rosch included in the report. He disagrees with this “final” privacy report in part because it emphasizes “unfair” practices, rather than “deceptive” practices. He argues that “unfair” is overly subjective (pg. C-3). I think highlighting the concept of “deception” in this report is important. It reminds us how critical it is for businesses to provide consumers with useful information so they can make informed decisions.

As the privacy conversation heats up in the press and in the nation’s capital, it’s a lot for a small business to digest. But some of the greatest inventions come from small, nimble businesses. By disclosing our data practices and following through, these small businesses may be the first to set stellar examples for responsible privacy practices across the industry.

Lorraine Akemann | Editor | Moms With Apps

1 thought on “Building Consumer Trust in the Marketplace: Notes from the Final FTC Report on Privacy”

  1. Excellent article, Lorraine. And thanks for all of your hard work on behalf of parents and developers to encourage discussion about privacy and disclosures and also how to best create and select quality apps for our children.

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