Tag Archives: federal trade commission

FTC Says Genetic Testing Company Failed To Protect User Privacy

Information, ,

The U.S. Federal Trade Commission posted a press release titled: “FTC Says Genetic Testing Company 1Health Failed to Protect Privacy and Security of DNA Data and Unfairly Changed Its Privacy Policy”. From the press release:

The Federal Trade Commission charged that the genetic testing firm 1Health.io left sensitive genetic and health data unsecured, deceived consumers about their ability to get their data deleted, and changed its privacy policy retroactively without without already notifying and obtaining consent from consumers whose data the company had the company had already collected.

As part of a proposed settlement with the FTC, 1Health will be required to strengthen protections for genetic information and instruct third-party contract laboratories to destroy all consumer DNA samples that have been retained for more than 180 days.

“Companies that try to change the rules by re-writing their privacy policy are on notice,” Said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC Act prohibits companies from unilaterally applying material privacy policy changes to previously collected data.”

California-based 1Health.io, Inc, also known as Vitagene, Inc. before changing its name in October 2020, has sold DNA health test kits and used DNA test results, along with information consumers supplied, to provide consumer with reports about their health, wellness, and ancestry as part of product packages that cost between $29 and $259. The health reports include personal information about a consumer’s health and genetics, such as their risk for developing health problems based on their genotype data…

…As part of the proposed order, 1Health.io, which Vitagene is now known as, must pay $75,000, which the FTC intends to use for consumer refunds. In addition to the DNA deletion requirement, under the proposed order the company:

  • Will be prohibited from sharing health data with third parties – including information provided by consumers before and after its 2020 privacy policy change – without obtaining consumers’ affirmative express consent;
  • Must ensure any company that purchases all or parts of 1Health’s business agrees by contract to adhere to provisions of the order;
  • Must notify the FTC about incidents of unauthorized disclosure of consumers’ personal health data; and
  • Must implement a comprehensive information security program addressing the security failures outlined in the complaint.

The Commission voted 3-0 to issue the proposed administrative complaint and to accept the consent agreement with the company…

The Federal Trade Commission wrote: …Vitagene, a San Francisco based DNA testing company, promised consumers that it exceeded industry-standard security practices for maintaining the privacy of people’s sensitive health and genetic information. But the FTC says the company didn’t keep that promise. In fact, the FTC says Vitagene use a well-known cloud service provider to store people’s confidential information but didn’t use built-in cloud security measures…

In my opinion, it sounds like Vitagene / 1Health.io lied to its customers about how secure their DNA information was. It seems fair that the FTC decided to crackdown on the company and make it pay a lot of money for its terrible choices.

FTC Launched New Office Of Technology To Bolster Agency’s Work

Technology,

The U.S. Federal Trade Commission FTC) posted a press release titled: “FTC Launches New Office of Technology to Bolster Agency’s Work”. From the press release:

The Federal Trade Commission today launched a new Office of Technology that will strengthen the FTC’s ability to keep pace with technological challenges in the digital marketplace by supporting the agency’s law enforcement and policy work.

“For more than a century, the FTC has worked to keep pace with new markets and ever-changing technologies by building internal expertise,” said Chair Lina M. Khan. “Our office of technology is a natural next step in ensuring we have the in-house skills needed to fully grasp evolving technologies and market trends as we continue to tackle unlawful business practices and protect Americans.”

The Office of Technology will have dedicated staff and resources, and will be headed by Chief Technology Officer Stephanie T. Nguyen.

Here is what the Office of Technology will do:

Strengthen and support law enforcement investigations and actions: The office will support FTC investigations into business practices and the technologies underlying them. This includes helping to develop appropriate investigative techniques, assisting in the review and analysis of data and documents received in investigations, and aiding in the creation of effective remedies.

Advise and engage with staff and the Commission on policy and research initiatives: The office will work with FTC staff and the Commission to provide technological expertise on non-enforcement actions including 6(b) studies, reports, requests for information, policy statements, congressional briefings, and other initiatives.

Highlight market trends emerging technologies that impact the FTC’s work: The office will engage with the public and external stakeholders through workshops, research conference, and consultations and highlight key trends and best practices.

The Washington Post reported that the FTC has long been dwarfed by Silicon Valley titans like Google and Apple, each staffed with thousands of engineers and technologists.

According to The Washington Post, FTC leaders are hoping combining and expanding their forces into a dedicated tech unit will help keep up with the rapid advancements across the industry – and to keep it in check.

The Washington Post also reported that the FTC’s announcement arrives at a critical juncture. Federal regulators are dialing up investigations into tech behemoths like Amazon and waging blockbuster legal battles against Microsoft and Facebook company Meta.

The agency voted to approve the office’s creation in a 4-0 vote Thursday. It marks the first vote by Republican Commissioner Christine Wilson made public since she announced plans to “soon” retire from the agency on Thursday.

reported that the FTC has long been dwarfed by Silicon Valley titans like Google and Apple, each staffed with thousands of engineers and technologists.

According to The Washington Post, FTC leaders are hoping combining and expanding their forces into a dedicated tech unit will help keep up with the rapid advancements across the industry – and to keep it in check.

The Washington Post also reported that the FTC’s announcement arrives at a critical juncture. Federal regulators are dialing up investigations into tech behemoths like Amazon and waging blockbuster legal battles against Microsoft and Facebook company Meta.

The agency voted to approve the office’s creation in a 4-0 vote Thursday. It marks the first vote by Republican Commissioner Christine Wilson made public since she announced plans to “soon” retire from the agency on Thursday.

Personally, I’m not entirely clear on how this all shakes out. I’m going to guess that the new office will give the FTC the ability to keep up with Google and Apple (among other tech companies) and perhaps enact sanctions if a huge company is doing something egregious.

The Ghost Of Instagram Haunts Microsoft’s Future

Microsoft, , ,

The catchy headline at the top of this blog post was the title Reuters selected for its article. It is an ominous sounding title, indicating that Microsoft will have difficulty with the Federal Trade Commission’s (FTC’s) lawsuit against the company.

Reuters reported that Facebook is Microsoft’s antitrust boogeyman. The U.S. regulatory agency, the Federal Trade Commission, is seeking to block the software titan’s $69 billion deal for gaming giant Activision Blizzard, partly to stop domination of the industry as it evolves. The FTC’s leader Lina Khan might be making up for regulators who waved through Mark Zuckerberg’s $1 billion purchase of Instagram. Though Microsoft’s deal is different, punishment under Khan’s regime seemed inevitable.

According to Reuters, the FTC is concerned that Microsoft, the owner of the Xbox gaming console, will withhold popular games made by Activision, including Call of Duty and World of Warcraft from competing platforms including Sony’s PlayStation and Nintendo’s Switch. Microsoft has tried to appease this concern. This month, the company led by Satya Nadella agreed to offer games to Nintendo and Sony for 10 years.

The New York Times posted an article titled: “Lina Kahn, Aiming to Block Microsoft’s Activision Deal, Faces a Challenge”. This is a more optimistic title than the one Reuters chose. The New York Times reported that Lina Khan has pledged to usher in a new era of trustbusting of America’s corporate giants, recently saying the agency plans to “enforce the antitrust laws to ensure maximal efficacy.”

According to The New York Times, Ms. Khan has staked that ambitious agenda on a case that may be highly challenging for the agency to win. Ms. Khan and the FTC face hurdles in trying to stop the Microsoft-Activision deal, experts said. That’s because courts have been skeptical of challenges to so-called vertical mergers, where the two businesses don’t compete directly. In this case, Microsoft is best known in gaming as the maker of the Xbox console, while Activision is a major publisher of blockbuster titles such as Call of Duty.

The New York Times also reported that Microsoft has vowed to fight the FTCs lawsuit against the Activision purchase. On Thursday, Brad Smith, Microsoft’s president, said the company had “complete confidence in our case and welcome the opportunity to present it in court.” On Friday Microsoft pointed to previous statements that it believes the deal would expand competition and create more opportunities for gamers and game developers.

The Wall Street Journal reported that in the typical antitrust case, the government challenges a horizontal merger, or one involving rivals that compete head-to-head. Such mergers, by removing a competitor from the marketplace, can increase concentration, a factor that can be used to infer harmful effects such as higher prices.

According to The Wall Street Journal, the government has struggled to win cases on vertical mergers because making claims about the potential future harms posed by such deals is less straightforward and can require complex speculation about how market forces might play out.

Personally, I think it is going to take a very long time to sort this situation out in court. This is happening during the holiday season, and I cannot help but wonder if gamers who wanted to buy a console will hold off until they know the outcome of the Microsoft – Activision Blizzard acquisition.

Musical.ly Fined $5.7 Million for Collecting Personal Information from Children

application, , ,

The Federal Trade Commission (FTC) announced that the operators of the video social networking app Musical.ly (now known as TikTok) have agreed to pay $5.7 million to settle FTC allegations that the company illegally collected personal information form children. This is the largest civil penalty ever obtained by the FTC in a children’s privacy case.

The FTC’s complaint (which filed by the Department of Justice on behalf of the FTC), alleged that Musical.ly violated the Children’s Online Privacy Protection Act (COPPA), which requires that websites and online services directed to children obtain parental consent before collecting personal information from children under the age of 13.

User accounts were public by default, which means a child’s profile bio, username, picture and videos could be seen by other users. Changing the setting to private did not make the profile private. Users could still send direct messages to private Musical.ly accounts.The complaint noted that there had been public reports of adults trying to contact users via the Musical.ly app.

The FTC complaint said that operators of the Musical.ly app were aware that a significant percentage of users were younger than 13 and received thousands of complaints from parents that their children under 13 had created Musical.ly accounts.

TikTok posted information on its newsroom about how they will work with the FTC in conjunction with the agreement. TikTok will split users into age-appropriate TikTok environments, in line with FTC guidance for mixed audience apps. The environment for younger users will not permit the sharing of personal information. It also places limits on content and user interactions.

There are two things can be learned from this situation. One is that companies that have apps or websites that collect user’s personal information really need to take steps to ensure that the data from children is kept private. Failing to do so could result in a huge fine.

The other lesson is that parents should not assume that an app will protect their child’s data – or keep their child’s profile private. Take the time to see what the app collects, and how protective their privacy settings are before allowing your child to use it.

FTC Announced Creation of Technology Task Force

Law

The Federal Trade Commission’s Bureau of Competition announced the creation of a Technology Task Force. It is dedicated to monitoring competition in the U.S. technology markets, investigating any potential anticompetitive conduct in those markets, and taking enforcement actions when warranted.

The creation of this task force is modeled on the FTC’s Merger Litigation Task Force which reinvigorated the Bureau of Competition’s hospital merger review program, and also sharpened the agency’s focus on merger enforcement in retail industries, particularly regarding matters involving food, beverages, and supermarkets.

“The role of technology in the economy and in our lives grows more important every day,” said FTC Chairman Joe Simons. “As I’ve noted in the past, it makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition.”

The Technology Task Force will have about 17 staff attorneys. It will include attorneys with unique expertise in complex product and service markets and ecosystems, including markets for online advertising, social networking, mobile operating systems and apps, and platform businesses.

“Technology markets, which are rapidly evolving and touch so many other sectors of the economy, raise distinct challenges for antitrust enforcement,” said Bureau Director Bruce Hoffman. “By centralizing our expertise and attention, the new task force will be able to focus on these markets exclusively – ensuring they are operating pursuant to the antitrust laws, and taking action where they are not.”

Personally, I think the existence of the Technology Task Force should worry companies like Facebook, Google, and Twitter. Each one will have to consider antitrust laws before gobbling up smaller companies. I wonder if the Technology Task Force will look at the companies who make video games, who buy up smaller competitors, and then do massive layoffs a little while later.

I’m hoping that the consumer protection aspect of the Technology Task Force will put in place restrictions on how social media companies can use people’s data – especially in situations where that data is being used to make money for those companies. It will be interesting to see what, exactly, the Technology Task Force does.

FTC Kicks Off Operation Spam Zombies

Commerce, Crime, Dave's Muse, Fair Use, Media, Operating Systems, Security, Services, Software, Technical, , , , , , , , , ,

The U.S. Federal Trade Commission (FTC) and 35 government partners from more than 20 countries are targeting illegal spammers who take remote control of unwitting users’ computers to serve as spam transmission zombies. By hijacking home and business computers, spam can be routed through them, thereby hiding the true source of the spam and making the enforcement of antispam laws more difficult.

Continue reading FTC Kicks Off Operation Spam Zombies →