March 11, 2005 | Move Over FBI, There's a New Abbreviation in Town

As we learned yesterday, the Internet is changing everything.

Can the Federal Trade Commission keep up, even if the Senate gives them the legal equivalent of admin privileges, a T1 connection, a multi-threading processor, a wireless mouse, some IP tracing software, an anti-glare monitor screen and a whole closet full of O'Reilly books?

Today, Andy Sullivan (the Reuters journalist and rock n' roll legend, not the guy famous for his premature "I'm retiring from the blog world" ejaculations and on-air butt scratching) has the goods on yesterday's Senate Banking hearing on ChoicePoint and identity theft. It was the first of several hearings, but unfortunately was frequently interrupted by adjournments for votes.

In fact, ChoicePoint's Vice President Don McGuffey, who was scheduled to testify, never did.

Senator Charles Schumer (D-NY) grilled the head of the FTC, Deborah Platt Majoras, about whether the FTC needed more authority to regulate ChoicePoint, since as a data marketer much of its work isn't regulated by the rules governing credit reports.

Platt Majoras was in a bad way, since the FTC is investigating ChoicePoint.

Now, my guess is, Platt Majoras would love to have more authority, but she can't say in front of the Senate that the FTC currently has no authority over data brokers, without totally undermining the legitimacy of whatever investigation is currently going on.

Schumer and Sen. Bill Nelson (D.-Fl), along with others, want to pass a bill giving the FTC more authority. Nelson's version (.txt) is here.

Schumer took Platt Majoras's inability to give a yes or no answer, as a clear yes, that the FTC needed, as his bill would give, more authority.

There was another piece of news yesterday that can only make one think, 'So what?'

The FTC announced it had reached an agreement with a company called CartManager, which runs checkout and sales services for thousands of small internet-based businesses. Seems the FTC busted the company for renting out customer names and lists, often in violation of the privacy policy of the small businesses.

From the press release:

But CartManager collected and rented the personal information of nearly one million consumers who shopped at merchant sites. The FTC alleges that CartManager did not adequately inform consumers or merchants that it would collect and rent this information and that it acted knowing that renting the information was contrary to many merchants’ privacy policies. The agency charged that CartManager was unfair and violated federal law.

The FTC used its muscle to stop this company from screwing its direct customers (the online stores) and its indirect customers (the Internet's average Jane and Jim Doe).

What did they get?

The settlement bars disclosure of previously collected personal information and bars misrepresentations about the collection, use, or disclosure of personally identifiable information. It requires that CartManager and merchants’ privacy practices be consistent, or, if not, that CartManager post a clear and conspicuous disclosure to consumers on each of its pages stating that consumers are on a CartManager site and that personal information collected on the site will be used, sold, rented, or disclosed to third parties.

Ouch. I can feel the pain from here.

Surely they got fined, too, right?

The settlement also requires that CartManager give up $9,101.63 it made by selling the information.

Maybe Nelson, Schumer, Corzine and Markey should go re-read the Parable of the Talents before the next hearing.

Posted by Ryan Singel at March 11, 2005 10:26 AM

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» Choicepoint Roundup, March 12 from Emergent Chaos
Ryan Singel has interesting analysis of the FTC's Congressional testimony. Ellen Simon of the AP has a story about her Choicepoint and Lexis Nexis files. Hint: They're imperfect, but that won't stop them from screwing up your life. Others... [Read More]

Tracked on March 12, 2005 08:23 AM