Federal Trade Commission Privacy Law and Policy

Privacy and Security

Article Snapshot


Chris Hoofnagle


Cambridge University Press (2016)


The Federal Trade Commission (FTC) is the most important privacy regulatory agency in the world. The FTC’s ambit also includes competition and deceptive trade practices. “Privacy” refers to FTC consumer protection efforts relating to the regulation of data about people.

Policy Relevance

The FTC’s authority to regulate privacy is broad and flexible. The FTC should focus more on information gathered by social networks or search engines, and less on advertising.

Main Points

  • “Privacy” includes activities relating to consumer’s interest in how data is collected, used, and secured (informational interests) and those relating to consumer’s interest in how businesses contact or gain the attention of consumers (access interests).
  • Firms and governments can use information to improve efficiency, develop new products and services, and enhance security. But privacy advocates have concerns about these practices, because the use of data can have personal or social costs.
  • Critics of the FTC point out that the agency’s emphasis on a need to prove harm to consumers does not exist in the agency’s governing statutes, Title 15; this requirement may need to be abandoned for effective policing of information wrongs.
  • The FTC can investigate and sue almost any entity; the agency’s usual practice is to investigate dozens of actors in the industry before it initiates enforcement action.
  • Studying the history of consumer protection helps understand why the FTC should do more than police wrongs illegal under common law.
  • Concerns about online advertising have shaped much of the privacy debate, drawing attention away from more problematic issues such as information sharing over social networks, the use of automated decision systems and surveillance in advertising, and search engines.
  • Congress has emphasized the need for parental consent to collect information about children. To avoid this restriction sites are explicitly deciding against catering to children.
  • Debates about privacy that focus on whether there is “harm” from activities like behavioral advertising are outdated, and underestimate technology firms’ desire to control consumers.
  • In the future, marketing materials will be presented by robots or automated systems, and policymakers are likely to add layers of regulation as each new technology is introduced; enacting technology neutral rules based on general principles would be a better approach.
  • The FTC’s Bureau of Economics should study how to create a market for privacy, just as seat belt mandates allowed consumers to express a preference for safety for the first time, proving that consumers do care about safety.
  • Because privacy issues arising in the financial and telecommunications sector are especially complex, the FTC should welcome efforts to address privacy by the Consumer Finance Protection Bureau and the Federal Communications Commission.

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