FTC report puts Data Privacy in the spotlight.

From tweets to transactions, online activity produces huge volumes of data – and while businesses are primarily focused on how to use the data, consumer groups are increasingly concerned about how data collection affects personal privacy.

At the end of 2010, the Federal Trade Commission (FTC) published a preliminary set of recommendations to address these concerns. Then the agency reviewed more than four hundred public responses from businesses, privacy advocates, technologists and individual consumers. Recently, the final version was released.

You can get the full report here, and it’s worth a browse. The report proposes a “privacy framework” intended to “articulate best practices for companies that collect and use consumer data,” and to “assist Congress as it considers privacy legislation.” At a high level, the suggested practices are:

Privacy by Design: Build in privacy at every stage of product development;
Simplify Choice for Businesses and Consumers: Give consumers the ability to make decisions about their data at a relevant time and in a relevant context, including through a Do Not Track mechanism, while reducing the burden on businesses to provide unnecessary choices; and
Greater Transparency: Make information collection and use practices transparent.

The first few pages of the report expand these points just enough to provide a very nice outline of the whole framework – and if you just want the gist of it, that’s probably enough.

But at a more detailed level, the report is surprisingly interesting. For one thing, it provides a fairly thorough account of reactions and objections received in response to the preliminary report, and it explains how and why the framework was changed (or not) in reaction to the responses. And for another, it includes several case studies that make the issues and recommendations easier to understand.

There are also three appendices that shouldn’t be missed. The first is a year-by-year timeline of FTC “Privacy Milestones,” starting in 1970. The second is a set of infographics depicting the “Personal Data Ecosystem.” And the third is a sprited objection to much of the report, written by J. Thomas Rosch, one of the FTC’s five current commissioners. The scope of Rosch’s concerns, which include both the technical and political aspects of the report, highlights the difficulty of dealing with this complex topic.

Outside reactions to the final report were predictably mixed. As noted in this eWeek article, the report drew “cautious praise from consumer advocacy groups, though some claimed the suggestions do not go far enough in establishing safeguards.” But at the same time, “some industry groups are arguing that the restrictions proposed in [the report] could harm innovation and restrict commerce on the Internet.”

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