The Federal Trade Commission’s fines are a good first step. 4/20 ReleVents hed: Enforcement key to COPPA dek: The Federal Trade Commission’s fines are a good first step. by James Mathewson
I have often spouted off in this space about the need for privacy protection from e-commerce companies struggling for revenue. The formula for this protection is as follows: Legislators need to push for laws that protect Web users from unscrupulous Web merchants. Consumer-advocacy groups need to act as watchdogs to alert law enforcement agencies of violations. And law enforcement agencies need to act on these tips to issue strong penalties.
We have vivid evidence of this trifecta at work in two related news stories on our site today. The Center for Media Education (CME), a nonprofit kids watchdog group, alerted the Federal Trade Commission (FTC) of violations of the 1999 Children’s Online Privacy Protection Act (COPPA) on several sites aimed at kids, and the FTC responded with several devastating fines.
Two things about this story are worth noting. First, the CME reviewed 150 sites aimed at children 13 and under and found that the majority of sites are now in compliance with COPPA. Yet those that comply do not seem to be adversely affected by the strict privacy law. Also, some that did violate the laws were doing much more poorly than the sites that did not. To me this invalidates lawmakers’ and lobbyists’ frequent argument that strict privacy laws will effectively thwart e-commerce. On the contrary, as I have argued, the protections seemed to give consumers more confidence that their personal data would be protected.
Second, I cannot overemphasize the role of enforcement here. If the violations were made public without some kind of response from the FTC, it would have rendered COPPA worthless. Similarly, any privacy law covering adult access should have some teeth in it. That may mean developing a whole new division within the FTC that deals with e-commerce privacy violations. Anyone who has followed the news surrounding e-commerce this past year should know that the temptation to sell this data without authorization is too great for a lot of entrepreneurs, their investors, or their liquidators. As e-commerce shakes out and privacy laws tighten, there will be a growing need for enforcement.
Today we saw the system work for Web users. With enough similar victories, we can preserve the notion of safe e-commerce to the masses, and e-commerce can thrive in the future.
James Mathewson is editorial director of ComputerUser.com and ComputerUser magazine.