Privacy and Security Law Blog : Privacy & Security Law Blog : Davis Wright Tremaine LLP : Seattle, Los Angeles, Washington D.C., New York, San Francisco, Shanghai, Portland and Anchorage Law Firm

By David Silverman

The FTC entered a stipulated judgment and order with a company that sells power wheelchairs and electric scooters, to settle charges that Electric Mobility Corporation violated the Telemarketing Sales Rule’s “(“TSR”) “do not call” restrictions by placing marketing calls to consumers who submitted sweepstakes entries that included their phone numbers. The FTC’s complaint, the settlement, and the monetary penalty paid under it, reinforce prior guidance that mere provision of a phone number on such entries or similar forms is not, under the TSR, “consent” to sales calls to households on the National Do-Not-Call Registry, nor does it create an “established business relationship (or “EBR”) that allows such telemarketing.

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This morning the Supreme Court heard oral argument in Sorrell v. IMS Health Inc. The case explores whether a Vermont law violates the First Amendment in prohibiting use of physicians’ prescribing histories by entities wishing to leverage the data for marketing. The case thus focuses principally on free speech jurisprudence, insofar as the Court has under review a decision that the state’s statute unconstitutionally restricts commercial speech. But at the same time, the issues arise against a privacy backdrop that implicates, among other things, use made of data reflecting individuals’ conduct for purposes of targeting marketing messages to them.

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By Paul Glist

Last week, Sens. John Kerry and John McCain and Reps. Cliff Stearns and Jim Matheson offered new privacy bills. The Kerry-McCain Senate bill and the Stearns-Matheson House bill each seeks to apply a common set of fair information practices on virtually all businesses, online and offline, that collect information about consumers or consumer behavior. For the moment, both bills are directed to commercial and non-profit organizations (such as many online businesses) that are currently not under privacy regulation.

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One day after Senators Kerry and McCain introduced their Commercial Privacy Bill of Rights Act of 2011, Representatives Cliff Sterns and Jim Matheson introduced a new bill, the Consumer Privacy Protection Act of 2011 that, unlike Kerry-McCain (or California’s proposed Do Not Track Me Online Act), focuses on personally identifiable information (PII), without addressing behaviorally targeted advertising. Nonetheless, it does propose new legal obligations for commercial and non-profit entities that collect, sell, use, or disclose PII of more than 5,000 consumers during any consecutive twelve-month period.

Some of the bill’s requirements, for many covered entities, may sound like old hat. For example, they would have to establish clear and readily available privacy policies governing their collection, sale, and disclosure of PII, and follow other requirements that have become conventional in bills oriented towards the Federal Trade Commission's Fair Information Practice Principles (FIPP) (for more on the principles, see the FTC principles, here. But the bill's requirements do invite participation in self-regulatory safe harbor programs.  Covered entities create a presumption of compliance if they create and maintain a self-regulatory program that is approved by the FTC. Once approved, programs would have five-year terms. The regulatory program would have to contain a process for resolving disputes with consumers. The bill does not propose to supersede the many sector-specific laws, such as those providing privacy rights in the communications, health, and financial industries. The bill would be enforced by the FTC, and provides for no private right of action.

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