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FTC Staff Privacy Report

FTC issued a preliminary staff report on Wednesday (12/1/2010) proposing a framework to balance the privacy interests of consumers with online companies mining consumer information. Titled “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers", this report practically declares that the online companies have failed to protect the privacy of Internet users and makes recommendations including:

1. “Companies should adopt a ‘privacy by design’ approach by building privacy protections into their everyday business practices”;
2. Consumers should be presented with choice about collection and sharing of their data at the time and in the context in which they are making decisions, not after having to read long, complicated disclosures that they often cannot find. One possible model is a “do not track” mechanism, following the idea of the National Do Not Call Registry; and
3. Other measures to improve the transparency of information practices, including consideration of standardized notices that allow the public to compare information practices of competing companies.

A New York Times news article on this report can be found here.

These measures, if adopted, could have a direct impact on the multi-billion dollar business conducted by the online advertising companies and technology giants such Google and Facebook. One has to wonder what kind of legislative/regulative/legal actions will follow.

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