FTC Tells Tech Companies to Respect Americans' Privacy

Federal Trade Commission Chairwoman Edith Ramirez privacy google facebook
Saul Loeb, AFP/Getty ImagesFederal Trade Commission Chairwoman Edith Ramirez

The new head of the Federal Trade Commission took a tough stance on consumer privacy in a speech Tuesday, warning tech companies to be careful about what data they collect on their users and how they use and protect that data.

Edith Ramirez, who was named chairwoman of the FTC in March, used her speech at the Technology Policy Institute Aspen Forum to talk about what big data needs to do to safeguard consumer privacy -- and what the agency has been doing to keep those companies in check. Likening the FTC to a "lifeguard," Ramirez pointed to actions it had taken against Google (GOOG), Facebook (FB), and MySpace for failing to keep user data confidential, as well as actions taken against the likes of Twitter and Wyndham Resorts (WYN) for failing to secure user data.

She also spoke about the need to safeguard consumer choice in how data is collected.

"Rarely, if ever, are consumers given a say about the aggregation of their personal data or secondary uses that are not even contemplated when their data is first collected," she said. Focusing on data collection is crucial, she argued, because it's difficult to enforce rules on how that data is ultimately collected.

Finally, she emphasized that companies should be transparent about their data collection practices.

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"For too long, the way personal information is collected and used has been at best an enigma 'enshrouded in considerable smog,'" she said. "Simplified choice ensures that consumers understand who is collecting their data and what it is being used for, and that they are given a say in whether that data is collected and how it is used."

These are all noble sentiments, and it's nice to see the FTC head is taking privacy issues seriously. But at the same time, it's hard to escape the irony of a government official lecturing companies about the need to respect the privacy of American citizens. In the last couple of months, the American public has learned extensive details about the National Security Administration's domestic spying program, which involves accessing user data from some of the very tech companies that Ramirez mentioned in her speech. And while she talks about ensuring transparency in data collection, the government that employs her has spent the last two months trying to capture the man who leaked details on its spying program.

Of course, the U.S. government is not a monolith, the FTC is not the NSA, and it's not Ramirez who's intercepting private communications, so it's not exactly fair to call her speech hypocritical. But you have to wonder: Does the U.S. government really have the moral authority to position itself as a "lifeguard" for consumer privacy at the same time as it's spying on Americans?

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.