FTC Regulatory Compliance and Online Consumer Protection

There are many conceivable ways to avoid a federal or state regulators’ spotlight.  However, attentive and deliberate complaint-monitoring may just be one of the best strategies that online businesses can adopt to avoid undesired attention from regulators related to privacy and marketing practices.

The Federal Trade Commission’s (“FTC”) consumer protection division obviously have their eyes on companies’ online activities, specifically Internet-based business that have allegedly engaged in unfair and deceptive business practices.  While the FTC’s Guides Concerning the Use of Endorsements in Advertising remain largely untested (the FTC has publicized only a small handful of related investigations), regulators are clearly focused upon online privacy – as evidenced by the proposed “Do Not Track” system.  Clearly, businesses must do more to increase transparency to consumers with regard to online data collection and usage practices, and should be prepared to demonstrate that they are making their best efforts to adhere to lawful online conduct.

First, Internet-based businesses should be more active now, than ever, in the development of online privacy and marketing practices that adhere to the spirit of regulators’ recent consumer protection activities.  After all, online businesses all want to avoid the unwanted FTC or State AG regulatory inquiry.  As an additional measure, Internet-based businesses may want to consider keeping a close eye on what others are saying online about their practices.  This is an excellent approach to learn about, and in some cases, remedy potential issues that could result in regulatory complaints.

Richard Newman, FTC and State AG Regulatory Compliance Attorney – Hinch Newman LLP