FTC Plan for Privacy and Data Security Enforcement Is Good News for GCs: Tech Attorney

Victoria Redgrave. Courtesy photo

A Federal Trade Commission staff comment released this week signifies that the FTC intends to hold its ground as a present and future player on privacy and data security issues—and that’s good news for in-house counsel, in the view of attorney Victoria Redgrave.

Redgrave, a former general counsel of Technology Concepts & Design Inc. and a former in-house litigation counsel at two other major companies, is a founding partner and chair of the executive committee at the Redgrave LLP law firm in Washington, D.C. The law firm focuses its practice on legal challenges related to law and technology, including e-discovery, information governance, data privacy and data security.

The FTC staff published its 21-page comment Monday after submitting it to the Department of Commerce’s National Telecommunications and Information Administration, which is developing the Trump administration’s approach to consumer privacy. Congress also is considering comprehensive national privacy legislation.

The FTC staff document offered comment on four key areas:

• Security: The FTC has a strong history of data security enforcement and renewed its call for comprehensive data security legislation.

• Transparency: The agency said it encourages a consumer-oriented approach that takes context, form, effectiveness and consumer demand into account.

• Control: The FTC encouraged “a balanced approach” that considers consumer preferences, the context of the choice (such as the type of data use and any associated risk), and the choice mechanism.

• Enforcement: The FTC said it will continue its vigorous enforcement on privacy and security.

Redgrave explained that the staff document does not officially represent the views of the commission, “but it’s safe for readers to assume that they can take it as an authoritative statement about what the FTC does and how it approaches issues of privacy and data security.”

She said the “big take-away from this document” is that although all the commissioners are relatively new—four of them have held office for barely six months and the fifth for less than that—the agency’s approach to these issues remains consistent.

“From the standpoint of in-house counsel, corporations want predictability and fairness from regulators to help guide decisions and actions, especially in rapidly evolving areas such as the intersection of innovative technologies and information governance,” she said.

The memo said the agency intends to continue actively enforcing Section 5 of the Federal Trade Commission Act to pursue companies that engage in acts or business practices, including information practices that harm consumers. The document also said the FTC will keep studying the leading edge issues in the area, as shown by its ongoing Hearings on Competition and Consumer Protection in the 21st Century, which continues through January 2019.

Redgrave said that’s continued good news for companies because of “the FTC’s unique mandate to perform a cost-benefit analysis before finding a practice unfair, its history of providing meaningful guidance to industry, and its traditional balancing of consumer privacy interests with business’ need for flexibility.”

The FTC staff also repeated earlier calls for Congress to clarify the agency’s authority, especially on corporate data breaches, an area where the agency would like to take the lead.

“Data security concerns are an important part of the privacy debate,” the document said, “and the FTC continues its longstanding call that Congress consider enacting legislation that clarifies the FTC’s authority and the rules relating to data security and breach notification.”