by Henry L. Judy (Washington D.C.), Holly K. Towle (Seattle), Samuel R. Castic (Seattle), Jonathan D. Jaffe (San Francisco).
On December 1, 2010, the FTC released a preliminary staff report entitled “Protecting Consumer Privacy in an Era of Rapid Change” that has the potential to materially change the privacy obligations of all businesses in the United States. The staff report poses important policy choices regarding who controls data and what information will freely flow in the United States. It proposes a broad privacy framework and articulates a number of new and strengthened data privacy obligations that are almost certain to increase business compliance costs and potential litigation.
While the staff report is only a preliminary recommendation, the final privacy proposal that emerges from the FTC will likely serve as both a guide for future enforcement actions, and as a basis for future legislation. The FTC is accepting comments on its proposed framework until the end of January 2011, and it is strongly recommended that businesses do so if they want to register their concerns before the FTC issues its final privacy framework.