FTC expands its privacy options

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Privacy advocates cheered the Federal Trade Commission’s decision to revive its rarely used “penalty offense authority” against for-profit colleges that make misleading or deceptive claims, a move that shows the agency is expanding its enforcement options after the Supreme Court gutted its authority to seek monetary damages from companies that engage in illegal conduct. The FTC could use this penalty offense authority to target various other cases, including several involving tech — and it should do so, FTC Commissioner Rohit Chopra and his then-adviser Samuel Levine argued in a paper published October 2020 (Levine is now director of the FTC’s bureau of consumer protection). Some examples they cited: gig economy companies that mislead workers about how much money they can make; companies that employ influencers for posts or fake reviews without disclosing that they’re sponsored; and deceptive data practices, such as when companies tell users they’re collecting data for one purpose and then use that data for another. FTC Chair Lina Khan said the agency was “resurrecting a dormant authority to deter wrongdoing and hold accountable bad actors who abuse students and taxpayers.” The authority, granted to the FTC in 1975, allows the agency to fine companies if they knowingly engage in behavior the FTC has deemed “unfair or deceptive.”

FTC Expands its Options