• by Wendy Davis  @wendyndavis, November 16, 2022

The Federal Trade Commission should abandon its attempt to craft new privacy rules, and instead use its existing power to prosecute companies that misuse consumers' data, the tech industry group NetChoice argues in comments to the agency.

“Rather than creating new rules without a clear grant of authority from Congress, the Commission should consider how it can appropriately use its existing tools to go after bad actors,” the organization writes in comments submitted Tuesday. “Creating a new, comprehensive set of regulation that does not clearly distinguish between benign, beneficial data use and malicious data practices may deter innovation and prohibit the practices and services that benefit consumers.”

The group's comments come in response to the FTC's requests for comments about potential privacy regulations regarding “commercial surveillance,” which the agency defines as "the collection, aggregation, analysis, retention, transfer, or monetization of consumer data and the direct derivatives of that information."

The Interactive Advertising Bureau earlier this week urged the FTC to scrap the regulatory initiative. Other ad organizations are expected to make similar requests.

NetChoice -- which counts Amazon, Google, Meta and TikTok among its members -- writes that FTC's commentary about the initiative “presumes that data collection or usage is inherently harmful.”

“In reality, data collection already has many benefits to consumers from providing better commuter routes to providing us with free services that were once or would be costly,” the group writes. “And for the bad actors who truly engage in consumer harm, the FTC already has the authority to go after those individuals as it has done in the past with cases against those who had inadequate security practices and were subject to data breaches and those who engaged in deceptive data practices.”

When the FTC released its “advance notice of proposed rulemaking” -- the document that launched the initiative -- the agency wrote that media reports and public research “suggest that harmful commercial surveillance and lax data security practices may be prevalent and increasingly unavoidable.”

The agency added that the current approach to online privacy -- which involves notifying consumers about data collection and seeking their consent on an opt-out or opt-in basis -- may be inadequate.

“The permissions that consumers give may not always be meaningful or informed,” the FTC stated, adding that many people don't have the time to review lengthy privacy policies and their periodic updates.

NetChoice argues that consumers “have a wide range of preferences when it comes to their privacy around different types of data,” and that the FTC “should not presume that those whose preferences are not privacy-centric have somehow been misled.”

The organization adds that if the FTC does issue rules, it should “avoid dictating specific practices such as data minimization.”

“Data minimization may not work in all cases, and it may be difficult to determine what data is useful in advance,” the organization writes. “Instead, consumers should be empowered to make informed decisions around which services they trust with which data, and the Commission should focus on harm, not mere collection.”

The advocacy group Fight for the Future, which also submitted comments to the FTC this week, argues that new privacy rules are needed to protect consumers.

“It is clear that the current tools and systems of surveillance and data collection are engineered only to increase profits for the corporations using them; the best interests and rights of users are not given meaningful consideration,” that group writes.

The organization is calling for the FTC to “impose strict data minimization obligations on companies” and to require companies “to proactively share how data is being used and transferred with both users and the general public.”

“Companies’ current 'accept all' and 'agree and continue' consent models do not provide a meaningful way for users to provide informed consent,” the organization writes. “The data collected does not always stay with the same entity, as companies profit from sharing individuals’ data with third-party data brokers. Most users do not realize how common this practice is, nor the potential impacts of their data changing hands.”

The FTC is accepting comments through November 21.