The FTC assessed an $800,000 penalty on data broker Spokeo...
The FTC assessed an $800,000 penalty on data broker Spokeo to settle charges that it violated provisions of the Fair Credit Reporting Act (FCRA), in what the agency called its first case addressing sale of Internet and social media data…
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(http://xrl.us/bnbjzj). The commission said Spokeo marketed consumer profiles to human resources, background screening and recruiting companies “without taking steps to protect consumers” required under FCRA. The agency alleged that the company, which collects personal information about consumers from hundreds of online and offline data sources, “operated as a consumer reporting agency and violated the FCRA by failing to make sure the information it sold would be used only for legally permissible purposes; failing to ensure the information was accurate; and failing to tell users of its consumer reports about their obligations under FCRA.” The commission’s settlement order bars Spokeo from future violations of FCRA and prohibits it from “making misrepresentations about its endorsements or failing to disclose a material connection with endorsers.” The order is subject to approval by U.S. District Court for the Central District of California, the commission said. Spokeo’s settlement will “allow for a continued open dialogue regarding our business practices,” President Harrison Tang said in a blog post (http://xrl.us/bnbkhj). The FTC had focused on a “prior version” of the company’s website and “believes that our targeted marketing at that time implicated” FCRA, he said. “It has never been our intention to act as a consumer reporting agency,” he said. “We have made changes to our site and our internal business practices in order to ensure we don’t infringe upon the FCRA’s important consumer protections.” Spokeo will “continue to provide one of the easiest opt-out functions in the people search industry” and is reviewing its privacy practices, Tang said.