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Implications of Increased Enforcement Trends

AcxiomMay 22, 2014

The privacy landscape is evolving as technology moves from primarily collecting and using data consciously provided by an individual, to collecting data that is observed about individual behavior. This behavioral data is used to predict different behaviors and shared with others for multiple purposes, ranging from fraud prevention to relevant marketing.

The recognition of the benefits of robust, correct data use are acknowledged.  Also recognized is the fact all individuals don’t view this trend the same way – some are very concerned it is eroding our privacy while others embrace both the individual and the societal benefits provided by “big data” and sophisticated analytics. For example, Mark MacCarthy from the Software & Information Industry Association recently wrote in his NY Times editorial commenting on the White House report on privacy that I discussed in my last blog, “Vigilant enforcement of the law will protect the public and allow data to achieve the extraordinary purposes that you rightly celebrate.”

We have laws in many countries.  Europe has had laws for many years which are currently being updated.  Latin America now has laws in almost all countries but Brazil, who has a draft law under consideration.  Asia has enacted many laws in recent years which are just going into effect.  While we don’t have a comprehensive law in the U.S., we do have numerous federal and state sector specific laws that govern many marketing practices – federal laws like CAN SPAM and the Do-Not-Call Registry and state laws like CA’s new Do-Not-Track law and the numerous state security breach notification laws.  It is also important to recognize the numerous general consumer protection laws that guard against unfair and deceptive practices, which are being applied more often to privacy related matters.

This growing list of laws is important because we are seeing a general global increase in enforcement of privacy and consumer protection violations, as well as increased powers to fine companies and even send officers of the organization to jail – and we should expect this trend to continue.

Enforcement comes in many flavors.   In the U.S. various regulators, like the Federal Trade Commission, can engage in enforcement actions.  In recent years the FTC has been using their “unfair and deceptive” powers more and more.  State Attorneys General also have similar consumer protection powers, so when federal enforcement actions occur there are often a number of state actions that follow.  Finally, we are seeing an increase in class action law suits against companies that violate either federal or state laws.  These enforcement action and law suits can result in tens of millions of dollars in fines and settlements, not to mention significant reputation damage.

As enforcement increases both the product and marketing departments of all organizations should get to know their privacy and compliance departments well.  Make them your partner, not you adversary.