On Monday, the FTC officially put the user tracking and online advertising industry on notice. The regulatory agency told the industry it had to clean up and start respecting users’ data. It laid out a broad set of guidelines that companies must follow. However, the agency did stop short of announcing federal regulations for data collectors. Online companies have been protesting that regulation would help to kill the vibrant industry.
The FTC report gives the Commerce Department’s report more weight, as well as the online bill of rights the White House is calling for. The report outlined a number of broad principles that browser makers, online ad companies, ISPs, social networks and search engines are being asked to abide by.
Those companies who pledge to abide by the new code and then fail to uphold the rules, could be then investigated for unfair business practices by the FTC.
While this is not law as of yet, the report did say their needs to be federal legislation forcing transparency on data collecting companies such as Lexis Nexis and Choicepoint. Very few Americans are aware of the databases these companies possess. They are used by employers, law enforcement and landlords across the U.S. The regulatory agency wants Congress to help make it easier for people in the U.S. to see and correct their own data, the same way as is done with credit reporting agencies.
No rules were laid down by the FTC. For example, companies can decide upon data retention periods. Mortgage brokers, for example, can maintain information for the life of the mortgage. On the other hand, a mobile app that is able to collect information on the current location of a user would be encouraged to eliminate the data much sooner than later.
