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Patricia O'Connell
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Kirk Nahra Discusses FTC Privacy Enforcement for Internet-Connected Devices

Bloomberg BNA’s Electronic Commerce & Law Report
November 20, 2013

Kirk J. Nahra, chair of Wiley Rein’s Privacy Practice, was quoted today in a Bloomberg BNA article about the Federal Trade Commission’s (FTC) efforts to protect consumers’ privacy as a growing number and variety of devices connect to the Internet.

Evolving technologies have created some electronic privacy issues that aren’t addressed by existing regulatory structures, but the FTC has used its authority well in coping with those challenges, Mr. Nahra said.  He cited a recent enforcement action against rent-to-own retailer Aaron’s, Inc., some of whose franchisees had secretly monitored customers’ activities using software installed on rental computers.  Aaron’s agreed on October 22 to settle the FTC’s charges that the company played a direct role in the franchisees’ use of the software. 

“It’s not clear precisely what authority the FTC acted on in that case or exactly what principles drove the enforcement decision, but it was a clear, common sense outcome given that wherever the line of their authority was, this was way over it,” Mr. Nahra said.

Congress could help the FTC by giving it monetary enforcement authority, Mr. Nahra said.  FTC settlements generally require companies to obey the law, but don’t carry monetary penalties.

The agency also faces a real challenge in trying to enforce reasonable privacy controls without impeding technological innovation, Mr. Nahra added.  “There’s no law that solves that problem,” he said.