Online Fine Print Doesn’t Satisfy the FTC’s New Consumer Chief

The new head of the Bureau of Consumer Protection at the Federal Trade Commission wants to protect online consumers’ dignity as well as their pocketbooks.

Consumer protection chief David Vladeck told the New York Times that some websites’ tracking of consumer data is “Orwellian.” He wants to change that with a broad mission to redefine how the FTC looks at online privacy.

Vladeck spent 26 years with the Public Citizen Litigation Group and seven years as a Georgetown law professor. Now in his new consumer protection role he wants the FTC to consider not only whether companies tracking online data are causing monetary harm to consumers, but also whether they are violating consumers’ dignity, the Times says.

A June FTC settlement with Sears illustrates Vladeck’s new approach, according to the story. Although Vladeck was not officially at the commission yet, he was consulting for it when the settlement was announced.

Sears offered to pay consumers $10 to download software that would track their browsing habits. The user agreement disclosed the full extent of the tracking, which included online secure sessions showing such things as online bank statements, drug prescription records and video rental records, according to an FTC press release. The FTC complaint alleges the disclosure was not adequate. Under the settlement, Sears will stop collecting data and will destroy information already collected.

“Under the harm framework, we couldn’t have brought that case,” Vladeck told the Times. “There’s a huge dignity interest wrapped up in having somebody looking at your financial records when they have no business doing that.”

Vladeck also told the Times that Sears didn't satisfy the FTC by providing information in its user license agreement. “I don’t believe that most consumers either read them, or if they read them, really understand it,” he said.