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Financial Services Law Insights and Observations

FTC orders social media and video streaming companies to provide data on privacy practices

Federal Issues FTC Privacy/Cyber Risk & Data Security FTC Act

Federal Issues

On December 14, the FTC issued orders to nine social media and video streaming companies requiring each company to provide information on their collection, use, and presentation of personal information, including their data gathering and advertising practices. The orders are issued pursuant to Section 6(b) of the FTC Act, which authorizes the FTC “to conduct wide-ranging studies that do not have a specific law enforcement purpose.” According to a sample order, the FTC seeks information concerning the companies’ privacy policies, procedures, and practices, including: (i) how personal and demographic information for both desktop and mobile devices is collected, used, tracked, estimated, or derived; (ii) how user attribute information is derived in order to determine which ads and other content are shown to consumers; (iii) whether algorithms or data analytics are applied to personal information; (iv) how user engagement is measured, promoted, and researched; and (v) how company policies, procedures, and practices are affecting children and teens, including how children and families are targeted and categorized. The Commission voted 4-1 to issue the orders, with Commissioners Chopra, Slaughter, and Wilson releasing a joint statement highlighting the need for the inquiry in order to, among other things, understand the “full scale and scope of social media and video streaming companies’ data collection.” The Commissioners also emphasized the FTC’s interest in “better understand[ing] the financial incentives of social media and video streaming services.” In dissent, Commissioner Phillips argued that the orders are “an undisciplined foray into a wide variety of topics, some only tangentially related to the stated focus of th[is] investigation.”

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