EPIC, OTI Urge FTC Not to Ignore Full Scope of Data-Driven Harms

As part of today’s Federal Trade Commission Workshop on Consumer Injuries and Benefits in the Data-Driven Economy, EPIC and New America’s Open Technology Institute filed comments urging the FTC “to take a more comprehensive view of consumer harm in the data-driven economy.” The comments call on the Commission to broaden both its quantitative and qualitative conceptions of the privacy injuries caused by unlawful data practices to fulfill its consumer protection mandate.

The FTC is frequently compelled to evaluate the costs and benefits of particular business practices, whether in interpreting the agency’s “unfairness” authority, conducting regulatory analyses, or determining the appropriate penalties for violations. But as EPIC and OTI explain, “prevailing judicial, statutory, and regulatory frameworks tend to assess data-related injury too narrowly.”

“Harms are frequently understood only in terms of immediate financial loss, overt deception, or risks consumers could reasonably avoid,” the comments note. “But modern data practices frequently produce consequences that are diffuse, delayed, or structural—such as loss of control over personal information, discrimination, reputational harms, or chilling effects on speech—and not captured in this limited conception.”

The comments also call on the Commission to adopt a broader view of the types of privacy harms that should enter into its regulatory and enforcement decisions. “[T]he Commission has too often held to an arbitrary conception of ‘substantial injury’ and harm that is both in tension with the FTC Act and ineffective at protecting consumers in the digital era,” the comments warn.

“This has contributed to a systematic under-recognition of privacy harms in the Commission’s regulatory and enforcement decisionmaking, which in turn has allowed unfair and otherwise harmful data practices to flourish,” the comments add. “The result of this—and of related regulatory and legislative failures—is the data protection crisis we now face today.”

EPIC frequently files comments before the FTC urging the Commission to uphold its obligation to protect consumers from data-driven harms.