Terratrue understands the FTC

September 12, 2022

What should the FTC codify on "commercial surveillance"


The FTC, for one, isn’t going to sit around waiting for Congress to pass federal privacy legislation. So it started a rule-making process on “commercial surveillance,” which some say is virtue signalling in itself. It’s asked the public for feedback on no less than 95 questions ranging from children’s privacy rules, to algorithmic discrimination, to sensitive data. The process will take years to complete, and it’s possible that if the American Data Privacy and Protection Act passes, the agency will back down completely. Commissioner Alvaro Bedoya has said as much. 

A few highlights from the FTC’s Sept. 8 open meeting. Also, y’all, these highlights aren’t exhaustive but aim to give you a sense of the kind of insights the FTC is looking for and the areas advocates are pushing the FTC to include in any final rule.

Algorithmic discrimination

Spencer Overton of the Joint Center for Political and Economic Studies said any FTC rule should include data minimization and transparency provisions. He’s concerned about in-the-shadows practices that aren’t obvious to users. For example, automated ad delivery often uses bias-based algorithms to determine which users are most likely to engage with particular ads.

But the public doesn’t fully understand how these systems work, he said. For example, a black woman doesn’t and couldn’t know she’s not being shown ads for a lucrative opportunity like a job posting or a house for sale. But the algorithm might have selected to only show the ad to white males.

Upturn’s Harlan Yu agreed, adding that data uses manifest differently for historically disadvantaged users such as black/brown, LGBTQ and women. Citing a well-documented problem, Yu described what an on-record eviction filing does for someone’s housing options.

Black renters are evicted at more than double the white eviction rate, Yu said. But when a landlord files a notice, it doesn’t necessarily even mean there was wrongdoing. It could simply reflect a threat, a powerplay, to coerce tenants to pay rent on a more timely basis. But the impact on a person’s ability to secure housing can be devastating and follow them around for life.

Yu suggests the FTC consider rules that would seal eviction filings before they can get into data broker’s hands, as well as sealing non-conviction arrest records and limiting the background checks writ large.

Excessive data collection and secondary uses

EPIC’s Caitriona Fitzgerald said the FTC should use its unfairness mandate to cut down on “secondary uses” of data such as third-party disclosures. Doing so would require companies to minimize the data they’re collecting to only that necessary to perform the service, which is more in line with consumer expectations.

The Future of Privacy Forum’s Stacey Gray added that the approach also would avoid consent fatigue over cookie banners and would thwart dark patterns that nudge users to give consent.

She noted problems with pervasive practices like scraping data from real-time bidding auctions to create sometimes highly sensitive user profiles, for example. Or to be shared with law enforcement for national security purposes.

“There’s lots of consensus on the need to reform advertising but little consensus on where to draw the lines in that very competitive landscape,” Gray said.

Yu said he’d like to see companies show their work publicly. That means minimizing the data that falls into the hands of data brokers “because a lot of the data collected there stem from racist systems that are unjust,” he said, adding companies “can’t be afraid to look and measure. And the FTC has a role to play here to get companies to do just that.”

Notice and choice

The panelists agreed that notice and choice isn’t working. Gray said that, despite the ubiquity of privacy policies, there’s no federal standard on what they have to contain. And even though there’s plenty of evidence that consumers don’t actually read privacy policies, other folks – researchers, journalists, competing businesses, and regulators – do.

She said the FTC should consider codifying that the absence of adequate disclosures is an unfair practice and of course not avoidable by consumers.

Watch the full day of speakers and topics here.