2002 UCLA J.L. & Tech. Notes 17

How Secure is Consumer Information on the Internet? An Examination of Federal Trade Commission's Efforts to Ensure Security of Consumer Information
by Ireneo Reus III

The success of Internet companies like Amazon.com has encouraged more companies to expand their presence on the Internet. As more companies have conducted their business online, companies have gotten easier access to consumers' personal information. In response to consumers' privacy concerns relating to what online companies do with their personal information, the Federal Trade Commission has taken a more active role in enforcing online consumer privacy.1

The FTC has addressed consumer privacy concerns a situation where a company obtains consumer information from another company and soliciting those consumers in the form of spamming.2 In February 2000, the FTC settled with Reverseauction.com, an online auction company, after the company deceitfully obtained consumer information from its rival, Ebay.com and spammed the consumers.3 The FTC has also enforced consumer privacy protection in situations where a company unintentionally discloses consumer information. In June 2001, the pharmaceutical company of Eli Lilly unintentionally disclosed the e-mail addresses of the six hundred and sixty-nine consumers who subscribed to an e-mail program that reminded them to take and refill their prescription of the anti-depression drug of Prozac.4 The FTC found that when the company sent an e-mail to its subscribers to notify them about the end of the e-mail program, the company unintentionally included all subscriber's names in the "To" line, thereby allowing all the e-mail addresses of the subscribers to be seen by other subscribers.5

In dealing with these companies, the FTC has taken steps to ensure that companies have policies in place to prevent future violations.6 Such policies would require most companies to have qualified personnel to carry out privacy procedures.7 These policies would be a more cost effective and legal alternative to having to pay fines to the FTC. More significantly, the policies would also increase consumer confidence in the companies regarding how consumers trust and would be more willing to do business with companies who implement security policies.

WEB SOURCES

http:www.abanet.org/buslaw/cyber/privacy/20020130pr.html
http://www.epic.org/privacy/
http://www.consumer.gov/

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