program areas Digital Consumer

FOR RELEASE July 26, 2019 Consumer Privacy Organizations to Challenge Facebook Settlement Statement from Groups --------- “The Settlement Fails to Provide Meaningful Relief to Facebook Users” WASHINGTON, DC – Many of the nation’s leading consumer privacy organizations are urging a federal court in Washington, DC to consider public comments before finalizing a proposed settlement between the Federal Trade Commission and Facebook. “The Facebook settlement is both historic and controversial. Many believe the FTC failed to establish meaningful safeguards for consumer privacy. We believe the court overseeing the case should consider the views of interested parties,” said Marc Rotenberg, President of the Electronic Privacy Information Center. Under the terms of the settlement, Facebook will pay a record-breaking $5 b fine to the United States Treasury, but there will be no significant changes in Facebook’s business practices and the FTC will release all pending complaints against the company. Typically in a proposed FTC settlement, the public would be provided an opportunity to provide comments to the agency before finalizing the deal. But no such opportunity was provided in the Facebook settlement. Many of the organizations that are joining the effort have also filed detailed complaints with the Federal Trade Commission, alleging that Facebook has violated privacy laws, including the Children’s Online Privacy Protection Act. A Freedom of Information Act case revealed that there are more than 26,000 complaints against Facebook currently pending at the Commission. In a similar case in 2012, the privacy group Consumer Watchdog challenged the FTC settlement with Google regarding the Safari hack. In other consumer privacy cases, courts have created opportunities for interested parties to file papers and be heard prior to a final determination on a proposed settlement. The case is In the Matter of Facebook, No. 19-cv-2184 (D.D.C. Filed July 24, 2019) EPIC filed with the court today: https://epic.org/2019/07/epic-challenges-ftc-facebook-s.html (link is external) Statements of Support: Brandi Collins-Dexter, Senior Campaign Director, Color of Change, “Despite the large price tag, the FTC settlement provides no meaningful changes to Facebook’s structure or financial incentives. It allows Facebook to continue to set its own limits on how much user data it can collect and it gives Facebook immunity for unspecified violations. The public has a right to know what laws Facebook violated. Corporations should face consequences for violating the public trust, not be given a rubber stamp to carry out business as usual. This settlement limits the ability of Black users to challenge Facebook’s misuse of their data and force real accountability which is why the courts must review the fairness of this settlement.” Susan Grant, Director of Consumer Protection and Privacy, Consumer Federation of America: “The FTC’s settlement with Facebook sells consumers short by failing to change the company’s mass surveillance practices and wiping away other complaints that deserved to be addressed. It needs to be stronger to truly protect our privacy.” Linda Sherry, Director of National Priorities, Consumer Action: “The FTC’s pending Facebook settlement does not take adequate measures to limit the collection and sharing of consumers’ personal information, but appears to provide the company with extensive protections from even future violations. Consumer Action respectfully urges the court to consider positions from interested parties who have related complaints filed with the FTC to ensure that the most fair and comprehensive agreement is approved.” Sally Hubbard, Director of Enforcement Strategy, Open Markets. “The FTC’s settlement is woefully insufficient in light of Facebook’s persistent privacy violations. The fine is a mere cost of doing business that makes breaking the law worth it for Facebook. Remedies must curb Facebook’s widespread data collection and promote competition. Otherwise Facebook will continue to fortify its monopoly power by surveilling users both on Facebook and off, and users can’t vote with their feet when Facebook violates their privacy. The public must have the opportunity to be heard on this negligent settlement." Robert Weissman, President, Public Citizen: “The FTC's settlement amounts to Facebook promising yet again to adhere to its own privacy policy, while reserving the right to change that policy at any time. That approach will fail to protect users' privacy. The court should reject the settlement and order the FTC to try again and do better.” Josh Golin, Executive Director, Campaign for Commercial-Free Childhood: “Facebook has been exploiting kids for years, and this proposed settlement is essentially a get-out-of-jail-free card. It potentially extinguishes our children's privacy complaints against Facebook, but offers absolutely no protections for kids' privacy moving forward. It also sweeps under the rug a complaint detailing how Facebook knowingly and intentionally tricked kids into spending money on mobile games over several years, sometimes to the tune of thousands of dollars per child.” James P. Steyer, CEO and Founder of Common Sense Media: "On behalf of families across the country, Common Sense fully stands behind EPIC's motion. The proposed settlement is a "get out of jail free" card for Facebook, purporting to absolve Facebook not only of liability for privacy abuses but for other -- completely unaddressed and unexplored -- Section 5 abuses. One such abuse that the FTC is aware of and that court documents confirm includes tricking kids into making in-app purchases that have put families out hundreds and even thousands of dollars —something the company has yet to meaningfully change its policies on to this day. Such a broad release is unprecedented, unjustified and unacceptable." Edmund Mierzwinski, Senior Director for Federal Consumer Programs, U.S. PIRG: "This laughable $5 billion settlement with the category-killer social media giant Facebook makes the much smaller Equifax settlement for sloppy security look harsh. Facebook intentionally collects and shares an ever-growing matrix of information about consumers, their friends and their interests in a mass surveillance business model. It routinely changes its previous privacy promises without consent. It doesn't adequately audit its myriad business partners. The FTC essentially said to Facebook: "Pay your parking ticket but don't ever change. Your fast-and-loose practices are okay with 3 of the 5 of us." Not changing those practices will come back to haunt the FTC, consumers and the world.” Jeff Chester, Executive Director, Center for Digital Democracy: "The 3-2 Facebook decision by the FTC leaves millions of Americans vulnerable to all the problems unleashed by the Cambridge Analytica scandal. The commission adopted a woefully inadequate remedy that does nothing to stem the fundamental loss of its user privacy which led to our original 2009 complaint."

Curbing Companies’ Bad Behavior Will Require Stronger Data Privacy Laws and a New Federal Data Privacy Agency Federal Privacy Laws Are Antiquated and Need Updating; New Data Privacy Legislation Must Include Civil Rights Protections and Enhanced Punishments for Violations Jan. 17, 2019 Contact: Don Owens, dowens@citizen.org (link sends e-mail), (202) 588-7767 Jeffrey Chester, jeff@democraticmedia.org (link sends e-mail), (202) 494-7100 WASHINGTON, D.C. – U.S. data privacy laws must be overhauled without pre-empting state laws and a new data privacy agency should be created to confront 21st century threats and address emerging concerns for digital customers, consumer and privacy organizations said today as they released a framework (link is external) for comprehensive privacy protection and digital rights for members of Congress. “Big Tech is coming to Washington looking for a deal that affords inadequate protections for privacy and other consumer rights but pre-empts states from defending their citizens against the tech companies’ surveillance and misuse of data,” said Robert Weissman, president of Public Citizen. “But here’s the bad news for the tech giants: That deal isn’t going to fly. Instead, the American people are demanding – and intend to win – meaningful federal restraints on tech company abuses of power that also ensure the right of states to craft their own consumer protections.” From the Equifax data breach to foreign election interference and targeted digital ads based on race, health and income, it’s clear that U.S. consumers face a crisis of confidence born from federal data privacy laws that are decades out of date and a lack of basic protections afforded them by digital conglomerates. These corporations, many of which dominate online spaces, are far more interested in monetizing every key stroke or click than protecting consumers from data breaches. For that reason, federal and state authorities must act, the groups maintain. The groups will push for federal legislation based on a familiar privacy framework, such as the original U.S. Code of Fair Information Practices and the widely followed Organization for Economic Cooperation and Development Privacy Guidelines. These frameworks should require companies that collect personal data and rights for individuals to: Establish limits on the collection, use and disclosure of sensitive personal data; Establish enhanced limits on the collection, use and disclosure of data of children and teens; Regulate consumer scoring and other business practices that diminish people’s physical health, education, financial and work prospects; and Prohibit or prevent manipulative marketing practices. The groups are calling for federal baseline legislation and oppose the pre-emption of state digital privacy laws. States have long acted as the “laboratories of democracy” and must continue to have the power to enact appropriate protections for their citizens as technology develops, the groups say. “Black communities should not have to choose between accessing the Internet and the right to control our data,” said Brandi Collins-Dexter, senior campaign director at Color Of Change. “We need privacy legislation that holds powerful corporations accountable for their impacts. Burdening our communities with the need to discern how complex terms of service and algorithms could harm us will only serve to reinforce discriminatory corporate practices. The privacy protection and digital rights principles released today create an important baseline for proactive data protections for our communities.” “For years now, Big Tech has used our sensitive information as a cash cow,” said Josh Golin, executive director of Campaign for a Commercial-Free Childhood. “Each innovation – whether it’s talking home assistants, new social media tools or software for schools – is designed to spy on families and children. We desperately need both 21st century legislation and a new federal agency with broad enforcement powers to ensure that children have a chance to grow up without their every move, keystroke, swipe and utterance tracked and monetized.” The United States is woefully behind other nations worldwide in providing these modern data protections for its consumers, instead relying solely on the Federal Trade Commission (FTC) to safeguard consumers and promote competition. But corporations understand that the FTC lacks rulemaking authority and that the agency often fails to enforce rules it has established. “The FTC has failed to act,” said Caitriona Fitzgerald, policy director at the Electronic Privacy Information Center. “The U.S. needs a dedicated data protection agency.” Alternately, many democratic nations like Canada, Mexico, the U.K., Ireland and Japan already have dedicated data protection agencies with independent authority and enforcement capabilities. Groups that have signed on to the framework include Berkeley Media Studies Group, Campaign for a Commercial-Free Childhood, Center for Digital Democracy, Center for Media Justice, Color of Change, Consumer Action, Consumer Federation of America, Defending Rights & Dissent, Electronic Privacy Information Center, Media Alliance, Parent Coalition for Student Privacy, Privacy Rights Clearinghouse, Privacy Times, Public Citizen, Stop Online Violence Against Women and U.S. PIRG. Read the groups’ proposal below. ###

CDD submits comments to The National Telecommunications and Information Administration On “Developing the Administration’s Approach to Consumer Privacy (link is external)" CDD argues that - Focus on “outcomes” is good but - Outcomes as defined by NTIA are too narrow and must include a broader discussion on privacy harms. They must include + identification harms (risks of identity theft, re-identification and sensitive inferences), + discrimination harms (inequities in the distribution of benefits and risks of exclusion), as well as + exploitation harms (personal data as commodity and risks to the vulnerable). - Legislation must not only achieve a reduction in privacy harms but must also ensure that “privacy benefits are fairly allocated”. Policy remedies must consider and be effective in addressing the inequities in the distribution of privacy benefits and harms. - NTIA’s list of desired outcomes of transparency, control, reasonable minimization, security, access and corrections, risk management, and accountability is a restatement of all-too-familiar privacy self-management paradigm. Privacy self-management alone is not enough as a policy solution. - Privacy is not an individual, commodified good that can and should be traded for other goods. - Legislation should focus less on data and more on outputs of data processing. So, instead of narrowing the scope of legislation to “personal data”, legislation must focus in on inferences, decisions and other data uses. - A risk-management approach must define risks broadly. NTIA should develop methodologies to assess the human rights, social, economic and ethical impacts of the use of algorithms in modern data processing.

A coalition of 22 consumer and public health advocacy groups called on the Federal Trade Commission (“FTC”) to investigate the preschool app market. The advocates’ letter urges the FTC to hold app makers accountable for unfair and deceptive practices, including falsely marketing apps that require in-app purchases as “free” and manipulating children to watch ads and make purchases. The complaint was filed in conjunction with a major new study that details a host of concerning practices in apps targeted to young children. The study (link is external) (paywall), “Advertising in Young Children’s Apps,” was led by researchers at University of Michigan C.S. Mott Children’s Hospital, and examined the type and content of advertising in 135 children’s apps.

The Center for Digital Democracy provides the following recommendations for comprehensive baseline Federal privacy legislation. We are building on our expertise addressing digital marketplace developments for more than two decades, including work leading to the enactment of the 1998 Children’s Online Privacy Protection Act--the only federal online privacy law in the United States. Our recommendations are also informed by our long-standing trans-Atlantic work with consumer and privacy advocates in Europe, as well as the General Data Protection Regulation. We are alarmed by the increasingly intrusive and pervasive nature of commercial surveillance, which has the effect of controlling consumers’ and citizens’ behaviors, thoughts, and attitudes, and which sorts and tracks us as “winners” and “losers.” Today’s commercial practices have grown over the past decades unencumbered by regulatory constraints, and increasingly threaten the American ideals of self-determination, fairness, justice and equal opportunity. It is now time to address these developments: to grant basic rights to individuals and groups regarding data about them and how those data are used; to put limits on certain commercial data practices; and to strengthen our government to step in and protect our individual and common interests vis-à-vis powerful commercial entities. We call on legislators to consider the following principles: 1. Privacy protections should be broad: Set the scope of baseline legislation broadly and do not preempt stronger legislation Pervasive commercial surveillance practices know no limits, so legislation aiming to curtail negative practices should - address the full digital data life-cycle (collection, use, sharing, storage, on- and off-line) and cover all private entities’ public and private data processing, including nonprofits; - include all data derived from individuals, including personal information, inferred information, as well as aggregate and de-identified data; - apply all Fair Information Practice Principles (FIPPs) as a comprehensive baseline, including the principles of collection and use limitation, purpose specification, access and correction rights, accountability, data quality, and confidentiality/security; and require fairness in all data practices. - allow existing stronger federal legislation to prevail and let states continue to advance innovative legislation. 2. Individual privacy should be safeguarded: Give individuals rights to control the information about them - Building on FIPPs, individuals ought to have basic rights, including the right to + transparency and explanation + access + object and restrict + use privacy-enhancing technologies, including encryption + redress and compensation 3. Equitable, fair and just uses of data should be advanced: Place limits on certain data uses and safeguard equitable, fair and just outcomes Relying on “privacy self-management”—with the burden of responsibility placed solely on individuals alone to advance and protect their autonomy and self-determination—is not sufficient. Without one’s knowledge or participation, classifying and predictive data analytics may still draw inferences about individuals, resulting in injurious privacy violations—even if those harms are not immediately apparent. Importantly, these covert practices may result in pernicious forms of profiling and discrimination, harmful not just to the individual, but to groups and communities, particularly those with already diminished life chances, and society at large. Certain data practices may also unfairly influence the behavior of online users, such as children. Legislation should therefore address the impact of data practices and the distribution of harm by - placing limits on collecting, using and sharing sensitive personal information (such as data about ethnic or racial origin, political opinions/union membership, data concerning health, sex life or sexual orientation, genetic data, or biometric data) or data that reveals sensitive personal information, especially when using these data for profiling; - otherwise limiting the use of consumer scoring and other data practices, including in advertising, that have the effect of disproportionally and negatively affecting people’s life chances, related to, for example, housing, employment, finance, education, health and healthcare; - placing limits on manipulative marketing practices; - requiring particular safeguards when processing data relating to children and teens, especially with regard to marketing and profiling. 4. Privacy legislation should bring about real changes in corporate practices: Set limits and legal obligations for those managing data and require accountability Currently companies face very few limitations regarding their data practices. The presumption of “anything goes” has to end. Legislation should ensure that entities collecting, using, sharing data - can only do so for specific and appropriate purposes defined in advance, and subject to rules established by law and informed by data subjects’ freely given, specific, informed and unambiguous consent; for the execution of a contract, or as required by law; and without “pay-for-privacy provisions” or “take-it-or leave it” terms of service. - notify users in a timely fashion of data transfers and data breaches, and make consumers whole after a privacy violation or data breach; - cannot limit consumers’ right to redress with arbitration clauses; - are transparent and accountable, and adopt technical and organizational measures, including + provide for transparency, especially algorithmic transparency, + conduct impact assessments for high-risk processing considering the impact on individuals, groups, communities and society at large, + implement Privacy by Design and by Default, + assign resources and staff, including a Data Protection Officer, + implement appropriate oversight over third-party service providers/data processors, + conduct regular audits - are only allowed to transfer data to other countries/international organizations with essentially equivalent data protections in place. 5. Privacy protection should be consequential and aim to level the playing field: Give government at all levels significant and meaningful enforcement authority to protect privacy interests and give individuals legal remedies Without independent and flexible rulemaking data-protection authority, the Federal Trade Commission has been an ineffective agency for data protection. An agency with expertise and resources is needed to enforce company obligations. Ongoing research is required to anticipate and prepare for additionally warranted interventions to ensure a fair marketplace and a public sphere that strengthens our democratic institutions. Legislation should provide - for a strong, dedicated privacy agency with adequate resources, rulemaking authority and the ability to sanction non-compliance with meaningful penalties; - for independent authority for State Attorneys General; - for statutory damages and a private right of action; - for the federal agency to establish an office of technology impact assessment that would consider privacy, ethical, social, political, and economic impacts of high-risk data processing and other technologies; it would oversee and advise companies on their impact-assessment obligations.