President Obama has designated Federal Trade Commission member Jon Leibowitz Bio to serve as Chairman of the FTC. He is expected to quickly set about increasing the enforcement activity of the FTC, the nation’s chief antitrust and consumer protection agency, which is currently fueled by a $250 million budget and looking for more.
Statistical evidence proves that during tough economic times, cops write more traffic tickets to generate revenue for cash-strapped local governments. People often forget that governments need revenue to survive, much the same way businesses need cash flows to operate. With an astronomically growing federal budget deficit and many state budgets suffering as well, the U.S. government is no exception. In tough times fraud and online crime increase and grey hat businesses push the regulatory envelope even harder to stay afloat. Many legitimate businesses may lose the resources to meet compliance standards, creating a strong argument for increasing FTC enforcement and penalty and settlement based revenue.
In addition, consumer privacy, data protection, and identity theft have become major concerns of consumers, as well as consumer advocacy groups and the Obama administration itself. That, and the track record of Chairman Leibowitz means the FTC has the political argument to take a more aggressive stance towards online privacy, behavioral marketing and enforcement. Email marketers specifically face investigators and prosecutors who are now well versed and comfortable with CAN-SPAM prosecutions.
According to an Adotas article by Dianna Koltz, CIPP and Director of Best Practices and Email Marketing at LashBack client Memolink, four industry groups are exploring the development of stronger data privacy and self-regulatory guidelines. The American Association of Advertising Agencies, Association of National Advertisers, Direct Marketing Association and Interactive Advertising Bureau are said to be reviewing the areas for self-regulation set forth in the FTC’s proposed self-regulatory principles issued in December 2007. Online marketers collect and process huge amounts of personal consumer data. Because of the nuances and complexities of each state’s data breach notification laws, it pays for marketers to double as privacy professionals to be proactive in catching fraud, protecting consumers, and have the ability to monitor their own processes to prevent an investigation by the FTC.
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On a positive note, FTC enforcement increases the value of legititmate marketers efforts, as their ongoing compliance efforts pay off as non-compliant competitors get fined. Others will learn or be reminded to comply only after they have been ticketed. Statistical evidence shows that writing a greater number of traffic tickets results in reduced speed and fewer accidents. As an industry we learn what business practices must change after an enforcement action goes public. But who wants to be the example? We need to show that we can self regulate to avoid more government intervention.
