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Privacy & Data

FTC’s Vladeck and Leibowitz Recognize the Privacy Policy Paradox

Earlier this week two important government officials made significant comments about the importance of protecting consumer information online. In an on-the-record interview with New York Times editors and reporters, FTC Chairman Jon Leibowitz and Director of Commission’s Bureau of Consumer Protection David Vladeck reaffirmed their belief that the privacy policy paradigm has passed.
The privacy policy paradigm hinges on a so-called notice-and-consent framework that works something like this: Web sites post statements detailing their privacy practices – some are carte blanches for the companies to use data any way they want, with language like “We reserve the right to use and to disclose to third parties any or all of the information that we collect online about you and other visitors [except for your email address] in any way and for any purpose”; then, as one privacy policy has so clearly put it – “by visiting and using the Site, you agree that your use of our Site, and any dispute over our online privacy practices, is governed by this Privacy Policy and our Terms of Service.” There, is of course, a Catch-22 here: loading the Web page that hosts the privacy policy implicates the user as having accepted the privacy policy.
As Vladeck pointed out, this is a rotten deal. “The literature is clear,” he said, very few people ever read privacy policies and fewer people understand them (Research has shown that the majority of privacy policies require more than 14 years of education to understand usually requires the reading comprehension level associated with having a college education!). Notice and consent, said Vladeck, “depended on the fiction that people were meaningfully giving consent.”
In the interview, Vladeck also touched on other pressing challenges to consumer privacy. He mentioned, for example, that when customers aren’t allowed to complete a transaction without agreeing to allow their data to be sold, they may be put in a situation that’s not entirely “fair,” using a loaded and important word in FTC parlance.
The interview, in other words, is a positive sign that the FTC understands the weaknesses of the current system and is thinking outside the privacy policy box.