Centre for Internet & Society

On September 20, the Centre for Internet and Society held a roundtable meeting with Betsy Broder, Counsel for International Consumer Protection, and Sarah Schroeder, Attorney, Bureau of Consumer Protection, Federal Trade Commission (FTC), United States. The meeting took place at the Imperial, Janpath, New Delhi and discussed both the U.S framework to privacy and potential frameworks and challenges to privacy in India.

As a note, thoughts shared during the meeting represented personal perspectives, and did not constitute the official position of the Federal Trade Commission.

When explaining the U.S regulatory framework for privacy the FTC attorneys highlighted that the United States does not have comprehensive privacy legislation, like in Europe,  but instead has  sectoral laws that address different aspects of privacy. For example, the Fair Credit Reporting Act maintains confidentiality of consumer credit report information, the Gramm Leach Bliley Act imposes privacy and security requirements for financial institutions, HIPAA applies to patient health information,  and the Children’s Online Privacy Protection Act prevents the collection and posting of personal information from minors.  It was discussed that the sectoral model followed by the United States allows for a nuanced balance to be struck between privacy protection and the market.  It was noted, however, that some have critiqued the U.S. regulatory framework for lacking clear principles that apply to the commercial world and lay out strong privacy protections for the individual. In light of this, the White House is developing a Privacy Bill of Rights.

The Federal Trade Commission is an independent agency in the United States Government with responsibility for enforcing both consumer protection and competition laws. It is composed of five commissioners, and a staff of roughly 1,000, which includes attorneys and economists. The FTC is primarily a law enforcement agency, but also undertakes policy development through workshops and reports, Consumer education is another key function of the agency.

On the consumer protection side, Congress has directed the FTC to enforce the Federal Trade Commission Act, as well as some more specific statutes, such as those that protect consumers from unwanted telemarketing laws, and the protection of children on line.  Its main objectives are to protect consumer interests, and prevent fraud and unfair and deceptive business practices. The FTC carries out its privacy work through its consumer protection mission.

When understanding the FTC’s role in relation to privacy, it is important to understand that the FTC’s jurisdiction applies only to certain industries as defined by Congress. Thus, for example, the FTC does not have jurisdiction over banks or telecommunications.

The most critical part of the FTC’s activities is its law enforcement function.  The FTC can investigate an organization if the staff believes that the entity may be involved in conduct that contravenes the FTC Act’s prohibition on unfair or deceptive practices, or another specific privacy law. The FTC has brought a number of privacy-related cases against major companies including Facebook, Google, ChoicePoint, and Twitter.  Many of these cases address new challenges brought about by rapidly changing technologies.

The vast majority of the FTC’s actions have been settled with consent judgments.  When the statute that the FTC enforces allows for the imposition of a civil penalty, the FTC sets the penalty at a level that ensures that it is fair and provides a deterrent, but will not impose a hardship on the company.  As a civil enforcement agency, the FTC cannot seek criminal sanctions. While enforcement is the cornerstone of the FTC’s approach to privacy, the agency also supports self-regulation, where appropriate.  In this system the FTC does not pre-approve an organization’s practices or define principles that all companies should abide by as it is felt that every organization is unique and has different needs and abilities, and assigning specific technical standards may stifle innovation.

In the meeting it was also discussed how US privacy laws may apply to overseas companies where they are providing services for US consumers or working on behalf of US companies.  For example, under the Gramm Leach Bliley Act the FTC has created the Safeguards Rule, which speaks to how financial data by financial institutions must be handled and protected.  This Rule applies to companies overseas if the company is performing work for US companies or US consumers.  In other words, a US company cannot avoid compliance by outsourcing its work to an off shore organization.    Discussions during the meeting also focused on consent and the key role that context, accessibility, and timing play in ensuring individuals have the ability to provide informed consent.  Some of the attendees suggested that this  practice  could be greatly improved in India. For example, currently in India there are companies that only provide consumers access to the company privacy policy after an individual has consented and signed up to the service.  When asked about the challenges to privacy that exist in India, many shared that, culturally, there is a different understanding of privacy in India than in many western countries.

Other thoughts included that the Indian government is currently imagining privacy regulation as being either fluid and purely self regulatory or being enforced through strict legal provisions.  Instead, the government needs to begin to expand the possibilities for a regulatory framework for privacy in India in such a way that allows for strong legal enforcement, and flexible standards.  The right to be forgotten was also discussed and it was mentioned that California has proposed a law that will allow individuals to request deletion of information.

The views and opinions expressed on this page are those of their individual authors. Unless the opposite is explicitly stated, or unless the opposite may be reasonably inferred, CIS does not subscribe to these views and opinions which belong to their individual authors. CIS does not accept any responsibility, legal or otherwise, for the views and opinions of these individual authors. For an official statement from CIS on a particular issue, please contact us directly.