The Federal Trade Commission announced Tuesday it would investigate the data broker industry, raising hope on the Hill that the watchdog agency will bring some transparency to the often-murky world of online marketing and ad targeting. At present, many consumers are unaware of what data websites and smartphones collect from them, as well as how it is used. The latest example was the turmoil this week over a change to the terms of service for the popular photo-sharing app Instagram, which is owned by Facebook. Reports claimed that the changes meant users' photos could now be sold and used in commercials, sparking a user backlash and prompting Instagram to deny that it ever intended to sell or appropriate user content. Similar incidents have taken place with a number of popular smartphone apps, indicating the need for clarity over what is and isn't allowed under the law.
The FTC ordered nine data brokers to provide the agency (PDF) with information on how they collect and use data about consumers, including the extent to which they allow consumers to correct and access their data or to opt out of having it sold. The FTC previously called on data brokers to act with more transparency in a commission report earlier this year, where the FTC set forth a voluntary framework for Internet companies. However, critics argue the voluntary guidelines don't go far enough to protect the privacy of consumers online. Congress is expected to take up online privacy legislation next year, but at present there doesn't seem to be enough support to pass broader privacy regulations. That leaves the FTC, the government's primary privacy watchdog, to enforce companies' privacy policies as a form of de facto regulation.
Quotable: “A picture is worth a thousand words; posting one to Instagram should not cost you your privacy. I am very concerned that Instagram’s new privacy policies and terms of service are putting consumer privacy at risk, especially that of teenagers. I will closely monitor this situation and hope Instagram takes the necessary steps to ensure that personal information is protected and not sold without permission.” — Rep. Edward Markey, D-Mass. FTC, Rockefeller to Announce New Children's Privacy Rules: Senate Commerce Chairman Jay Rockefeller, D-W.Va., will join lawmakers including Sen. Mark Pryor, D-Ark., and Federal Trade Commission Chairman Jon Leibowitz on Wednesday to announce updates to the Children's Online Privacy Protection Act, also known as the COPPA rule. The changes are intended to modernize the regulations implemented under the law to address new commercial practices and technological advances over the past decade, such as the proliferation of smartphones that track users' locations. Lawmakers have been adamant that it should be illegal for companies to track minors or share information about them without their parents' express consent. Laws protecting the privacy of children are considered more likely to pass Congress than broader online privacy legislation, which still appears a long shot at present. The news conference will take place at noon in Russell 253. Report: FTC Extends Google Probe: Despite earlier reports that it planned to wrap up its investigation as early as this week, the FTC is now expected to continue its probe of alleged anti-competitive behavior by Google into January. The search giant's many critics, including Microsoft and other Web rivals, were incensed by reports that Google would escape the probe by making voluntary commitments to license popular wireless technology and stop using information scraped from review websites like Yelp and TripAdvisor. The commission will now reportedly take more time to consider potential penalties, after competitors portrayed Google's proposed remedies as a slap on the wrist. Google was said to avoid action on the most serious allegations, that it biases its search results in favor of its own products. House Passes Tweaks to Patent Law: The House passed a series of minor changes to last year's overhaul of the patent system on Tuesday by a vote of 308-89. The legislation (HR 6621) would make technical and clarifying corrections to the 2008 law (PL 112-29), which was the first major overhaul of patent law in decades. The bill would modify the appeals process and provide for the repayment of travel expenses incurred by administrative judges from patent-related proceedings, along with other changes. However, some lawmakers took issue with a change that would require the U.S. Patent and Trademark Office to report to Congress on applications submitted, which critics argued could undermine the confidentiality of patent applications. Newtown Tragedy Sparks Conversation About Violence in the Media: As we reported yesterday, the mass murder in Newtown, Conn. has prompted several lawmakers to address the issue of violent content in media, along with gun control and the state of mental health care in our country. However, while several lawmakers called for a review of violent entertainment, particularly video games, such restrictions are unlikely to pass a constitutional test. The Supreme Court ruled last year that the United States has no tradition of regulating content based on violence, and that the obscenity exception to the First Amendment applies only to sexual content. House Endorses Netflix Bill: The House passed a measure by voice vote on Tuesday that would alter a video privacy law to allow rental companies to obtain consent to share consumers' rental history online. The bill (HR 6671) is the result of concerted lobbying by Netflix and other tech companies, and would weaken one of the strongest privacy laws on the books, passed in the wake of the 1988 confirmation battle over Supreme Court nominee Robert Bork. The House passed a similar bill (HR 2471) last year, but the Senate Judiciary approved an amended version of that bill last month only after attaching provisions to limit the government's access to email and other electronic communications during criminal investigations.