FTC zeroes in on Big Tech with public consultation

The US government will table new measures to crack down on corporate data sharing and consumer surveillance practices, soliciting advice from the public on regulations to counteract what it says is a growing security and health problem.

Announcing the move, the Federal Trade Commission (FTC) said: “Commercial surveillance is the business of collecting, analyzing, and profiting from information about people. Mass surveillance has heightened the risks and stakes of data breaches, deception, manipulation, and other abuses.”

The practice by companies of harvesting data without the public’s express consent places people at risk of having it hijacked by cybercriminals and used against them, it said. Not only that, but there is evidence to suggest that such practices are also putting children, the elderly, and ethnic minorities at increased risk.

"Mass surveillance has heightened the risks and stakes of data breaches, deception, manipulation, and other abuses."

Federal Trade Commission

Announcing that it will open its doors to public consultation for 60 days, the FTC said it would seek comment on “a wide range of concerns about commercial surveillance practices.” There will also be a virtual public forum held on September 8.

The official deadline for submitting comments via the Federal Register will be announced by the FTC shortly, when it opens its doors to feedback. The link allowing members of the public to go and make their voices heard will be posted on Regulations.gov “as soon as it is available.”

“Anyone from the public can submit a comment weighing in on the rulemaking, the general topics, or a specific question,” said the FTC.

Hidden bias

Automated systems that analyze data collected by companies while cloaked in a shroud of secrecy do so in a biased way, research suggests, exacerbating social ills such as racism and agism.

“While very little is known about the automated systems that analyze the data that companies collect, research suggests these algorithms are prone to errors, bias, and inaccuracy,” said the FTC. “As a result, commercial surveillance practices may discriminate against consumers based on legally protected characteristics like race, gender, religion, and age, harming their ability to obtain housing, credit, employment, or other critical needs.”

It added: “Some companies fail to adequately secure the vast troves of consumer data they collect, putting that information at risk to hackers and data thieves. There is a growing body of evidence that some surveillance-based services may be addictive to children and lead to a wide variety of mental health and social harms.”

Big Tech under scrutiny

Topics up for discussion will include the methods companies use to surveille customers, what measures if any they take to protect consumer data, and harms to service users that are both easy and difficult to quantify.

Judging by an overview posted on the FTC’s website, the topics covered by the consultation will be comprehensive, inviting individuals and businesses to consider a wide range of issues.

For example, one topic breakdown states: “Lax data security measures and harmful commercial surveillance injure different kinds of consumers – young people, workers, franchisees, small businesses, women, victims of stalking or domestic violence, racial minorities, the elderly – in different sectors of the internet economy.”

It then invites respondents to discuss how new trade regulations could mitigate such harms, and debate whether a comprehensive or sector-by-sector governance framework would serve the public interest best.

“For example, harms arising from data security breaches in finance or healthcare may be different from those concerning discriminatory advertising on social media, which may [in turn] be different from those involving education technology,” said the FTC.

FTC may seek new powers

Despite this effort, the commission itself has expressed doubts as to how effective any future regulations will be, primarily because it lacks the power to enforce them with financial penalties and the like under the FTC Act.

In a hint that it may seek for such powers to back up any new regulations it tables as a result of the consultation, the FTC added: “By contrast, rules that establish clear privacy and data security requirements across the board and provide the commission the authority to seek financial penalties for first-time violations could incentivize all companies to invest more consistently in compliant practices.”

"Firms now collect personal data on individuals at a massive scale and in a stunning array of contexts."

Lina Khan, FTC chair

Commenting on the announcement, FTC chair Lina Khan said: “Firms now collect personal data on individuals at a massive scale and in a stunning array of contexts. The growing digitization of our economy – coupled with business models that can incentivize endless hoovering up of sensitive user data and a vast expansion of how this data is used – means that potentially unlawful practices may be prevalent.”

She added: “Our goal today is to begin building a robust public record to inform whether the FTC should issue rules to address commercial surveillance and data security practices, and what those rules should potentially look like.”

Commercial surveillance has become a vast industry in itself, with the FTC stressing that companies are essentially motivated by profit to collect data on internet users that tracks “every aspect of their online activity, their family and friend networks, browsing and purchase histories, location and physical movements, and a wide range of other personal details.”

It added: “Companies use algorithms and automated systems to analyze the information they collect. And they make money by selling information through the massive, opaque market for consumer data, using it to place behavioral ads, or leveraging it to sell more products.”

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