FTC to Host Spring Seminars on Emerging Consumer Privacy Issues

Washington, DC - This spring, the Federal Trade Commission will host a series of seminars to examine the privacy implications of three new areas of technology that have garnered considerable attention for both their potential benefits and the possible privacy concerns they raise for consumers.

As the tools available to track, market to and analyze consumers – often without their knowledge – grow, businesses are able to meet consumers’ demands more efficiently and effectively. But these tools may also carry significant risks to consumers’ privacy. The seminars, taking place over three months, will shine a light on new trends in Big Data and their impact on consumer privacy. The topics will include:

  • Mobile device tracking – tracking consumers in retail and other businesses using signals from their mobile devices.
  • Alternative scoring products – using predictive scoring to determine consumers’ access to products and offers.
  • Consumer-generated and controlled health data – information provided by consumers to non-HIPAA covered websites, health apps and devices.

The series will bring together academics, business and industry representatives, and consumer advocates for two-hour discussion sessions, which will take place in Washington, D.C. and will be open to the public. The FTC invites comment from the public on the proposed topics, and will issue staff reports following the sessions.

Mobile Device Tracking – 10 a.m. to noon, Feb. 19, 2014
FTC Conference Center, 601 New Jersey Ave., NW, Washington, DC

Recently, retailers and other businesses have begun tracking consumers’ movements throughout and around retail stores and other attractions using technologies that identify signals emitted by their mobile devices. While the technologies differ, many work by identifying and collecting the MAC address – which is unique to a particular device – broadcast when a mobile device searches for Wi-Fi networks. Companies can use these technologies to reveal information about consumers including the path taken throughout a location, length of time in one location, whether a visitor is new or returning, and the frequency of visits to a location. According to media reports, major retailers in the United States are using or have tested the technology in their stores in order to gain insights into the behavior of their customers.

In most cases, this tracking is invisible to consumers and occurs with no consumer interaction. As a result, the use of these technologies raises a number of potential privacy concerns and questions. The seminar will address questions such as:

  • What different types of mobile device tracking are companies currently implementing, how do they work, and where are they used?
  • What are potential future uses of these technologies?
  • What are the similarities or differences between mobile device tracking and online tracking technologies?
  • What types of information and benefits do retailers gain from these technologies?
  • What benefits do consumers derive from these technologies?
  • What are the privacy and security risks associated with these technologies?
  • How are companies addressing these risks?
  • What information and choices are provided to consumers about this type of tracking?
  • How anonymous is the tracking?
  • How can companies implement the principles of privacy by design, simplified consumer choice, and increased transparency when designing and using these technologies?

Alternative Scoring Products – 10 a.m. to noon, March 19, 2014
FTC Conference Center, 601 New Jersey Ave., NW, Washington, DC

Many data brokers offer companies scores to predict trends and the behavior of their customers. Companies are using predictive scores for a variety of purposes, ranging from identity verification and fraud prevention to marketing and advertising.

For example, companies are using scores to predict the likelihood that a person has committed identity fraud; the likelihood that a certain transaction will result in fraud; the credit risk associated with certain mortgage loan applications; whether contacting a consumer by mail or phone will lead to successful debt collection; whether sending a catalog to a certain address will result in an in-store or online purchase; the likelihood that an individual is taking his or her medication; a person’s presence on the Internet and his or her influence over others; or whether a customer is pregnant, and if so, when the baby is due.

According to media reports, these scores are determining whether transactions trigger further scrutiny, the kind of special offers that companies make to certain individuals (and those they don’t), and even whether the customer should speak to a high-ranking customer service agent at a company.

Consumers are largely unaware of these scores, and have little to no access to the underlying data that comprises the scores. As a result, these predictive scores raise a variety of potential privacy concerns and questions. The panel will discuss questions such as:

  • What are the current types of predictive scores available to companies and what scores can we expect data brokers to offer in the future?
  • How are companies utilizing these predictive scores?
  • How accurate are these scores and the underlying data used to create them?
  • How can consumers benefit from the availability and use of these scores?
  • What are the privacy concerns surrounding the use of predictive scoring?
  • What legal protections currently exist for consumers regarding the use of predictive scoring, both in the United States and internationally?
  • What consumer protections should be provided; for example, should consumers have access to these scores and the underlying data used to create them? Should some of these scores be considered eligibility determinations that should be scrutinized under the Fair Credit Reporting Act?

Consumer Generated and Controlled Health Data – Date and location TBD

Increasingly, consumers are taking a more active role in managing and generating their own health data. For example, consumers are researching their health conditions and diagnosing themselves online. Consumers are also uploading their information into personal health records and apps that allow them to manage and analyze their data, and utilizing connected health and fitness devices that regularly collect information about them and transmit this information to other entities.

The movement of health data outside the traditional medical provider context has many potential benefits; however, it also raises potential privacy concerns. The seminar will address questions such as:

  • What types of websites, products, and services are consumers using to generate and control their health data, and how are consumers using them?
  • Who are the companies behind these websites, products, and services, what are their business models, and what does the current marketplace look like?
  • How can consumers benefit from these companies’ websites, products, and services?
  • What actions are these companies taking to protect consumers’ privacy and security?
  • What do consumers expect from these companies regarding privacy and security protections? Do consumers differentiate between these companies and those that offer traditional medical products and services that are covered by HIPAA?
  • What restrictions, if any, do advertising networks and others impose on tracking of health data?     

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.

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