Slaughter discusses the FTC’s priorities under the new administration, including ed-tech, health apps, and racial equity.
By Jennifer Archie, Michael Rubin, Marissa Boynton, and Jimmy Smith
On February 10, 2021, in her first major speech as acting chair of the Federal Trade Commission (the Commission, or the FTC), Rebecca Slaughter discussed the Commission’s enforcement priorities under the new administration — with a particular focus on deterring problematic data practices.
In her opening remarks at the Future of Privacy Forum, Slaughter stated that she would urge innovation and creativity and the use of all tools available to the Commission in order to bring about the best outcomes for consumers and to deter problematic privacy and data security practices.[i] She also noted that enhanced enforcement around ed-tech, health apps, and racial equity would be priorities for the new administration. In particular, Slaughter mentioned two types of relief that she believes the Commission should focus on going forward: disgorgement and effective consumer notice.
Types of Relief
The first type of relief that Slaughter referenced is the principle of disgorgement. Slaughter stated that the Commission has often employed the concept of disgorgement of “ill-gotten monetary gains” when consumers pay companies for products or services that involved deceptive marketing. She used Everalbum as an example of how the Commission could employ disgorgement in privacy cases in which companies process data from consumers in deceptive ways.[ii] Slaughter stated that the Commission should require violators “to disgorge not only the ill-gotten data, but also the benefits” derived from such data. In the Everalbum case, Slaughter noted that such benefits included the algorithms that were generated from the data.
Effective Consumer Notice
The second type of relief that Slaughter referenced is effective consumer notice. Slaughter proposed requiring companies to notify consumers if they used consumer information inappropriately or in a way materially different from what was promised, with the hope that “consumers will ‘vote with their feet’” and that such notice will allow them “to better decide whether to recommend the services to others.” Slaughter added that, most critically, effective consumer notice “accords consumers the dignity of knowing what happened,” and added that she will be pushing her staff to include provisions requiring consumer notice in privacy and data security orders.
As an example, Slaughter discussed the Commission’s recent fem-tech case involving the Flo menstruation and fertility app, in which the Commission alleged that Flo shared consumer information with other companies, including Facebook and Google — thereby violating the promises it made to consumers that it would not share their personal information.[iii] The Commission required Flo to notify each of the affected consumers of its false promises.
Use All Tools Available
Besides disgorgement and effective consumer notice, Slaughter also stated that she wanted to ensure that all future cases brought by the Commission would include an analysis of applicable laws in order to ensure that the Commission pleads all possible violations of law. As an example, in a concurring statement (and perhaps a harbinger of what the future holds), Slaughter stated that the Commission should have included unfairness counts.[iv] Future enforcement cases could likely contain all potential pleadings cutting across a panoply of laws under the Commission’s jurisdiction.
Pandemic Considerations Are Priority Number 1: Ed-Tech, Health Apps, Broadband
Slaughter further stated that she and her staff would particularly focus on ed-tech and health apps as they relate to the pandemic.
With respect to ed-tech, Slaughter stated that the Commission was conducting an industry-wide study of social media and video streaming platforms. She also noted that the Commission is in the process of reviewing the Children’s Online Privacy Protection Act (COPPA) rule to clarify how COPPA applies in the ed-tech space.
With respect to health apps, Slaughter mentioned that she would like to see more enforcement around companies similar to Flo.
Broadband Privacy Issues
Slaughter further reported that the Commission would issue a report on an industry-wide study of broadband privacy practices.
Racial Equity Is Priority No. 2: Digital Services, Algorithms, Facial Recognition Technologies, and Geolocation Data
Slaughter stated that the Commission would make racial equity a priority issue.
Expensive Digital Services
Slaughter noted that “digital services can target vulnerable communities with unwanted content and that vulnerable communities suffer outsized consequences from data privacy violations.” She stated that the Commission would examine the ways in which vulnerable communities are asked to pay with their data for expensive services that they can ill afford.
Slaughter further mentioned that it is essential that algorithms are not used in discriminatory ways. She stated that her staff would “actively investigate biased and discriminatory algorithms” and that she was interested in the further exploration of the best methods to redress artificial intelligence-generated consumer harms.
Facial Recognition Technologies
Slaughter stated that the Commission will redouble efforts to identify violations in the law concerning the deployment and development of facial recognition technologies.
Slaughter relayed concern about the misuse of mobile apps’ use of location data generally, and especially “as it applies to tracking Americans engaged in constitutionally protected speech.”
[i] Rebecca Kelly Slaughter, Acting Chairwoman, FTC, Remarks at the Future of Privacy Forum: Protecting Consumer Privacy in a Time of Crisis (Feb. 10, 2021).
[ii] Complaint ¶¶ 9, 23, 24, In the Matter of Everalbum, Inc., No. 1923172 (FTC Jan. 11, 2021).
[iii] Comm’r Rohit Chopra & Comm’r Rebecca Kelly Slaughter, FTC, Joint Statement Concurring in Part, Dissenting in Part, In the Matter of Flo Health, Inc., No. 1923133 (Jan. 13, 2021).
[iv] Rebecca Kelly Slaughter, Comm’r, FTC, Concurring Statement, FTC and State of New York v. Vyera Pharmaceuticals, LLC, Phoenixus AG; Martin Shkreli; and Kevin Mulleady, No. 161-0001 (FTC Jan. 27, 2020).
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