Google’s New Privacy Protocol

By Carla Rover • April 7, 2011 •

In a historic move, the FTC is requiring Google to implement a comprehensive privacy initiative under an agreement which stretches well into the future and may have ramifications for other online companies handling consumer data. The FTC agreement is based on complaints involving alleged violations of voluntary self-regulation initiatives. This is a sea-change from typical FTC investigations which most often deal with criminal activity.

“When companies make privacy pledges, they need to honor them,” said Jon Leibowitz, chairman of the FTC, in a release. “This is a tough settlement that ensures that Google will honor its commitments to consumers and build strong privacy protections into all of its operations.”

The FTC alleged that Google’s Buzz violated voluntary European-American data exchange standards, known as the Safe Harbor Framework, and also stated that opt-out options for Buzz were ineffective. The FTC-Google agreement will cause Google to be subject to independent privacy standards audits, maintain an comprehensive privacy program which addresses both European and American standards through 2031.

The agreement details privacy standards which go well beyond Buzz’s social content sharing abilities to include all forms of commerce, virtual products and services that Google is presently, or may in the future engage in including e-commerce, streaming video, GoogleTV and Google-driven devices. It also references new technologies which might involve consumer data usage as subject to the agreement. The agreement requires among other elements:

Mandatory independent audits during the next 20 years which will certify data security strategy and privacy strategy employed Google;
On-screen data usage notification on all video emissions, regardless of device;
Third-party services under contract with Google to maintain what the FTC deems “appropriate” privacy controls;
Include user location, screenname and IP address as information deemed “private” and under a protection mandate.

The FTC-Google agreement may be a test case for further government salvos against online companies with similar social components as well as online retailers that use client data as a component of marketing outreach.

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