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Consumer Protection

Why FTC Gridlock Is Good For Your Website

By Internet Lawyer
ftc internet privacy consumer protection

What will FTC gridlock mean for Internet privacy?

It looks like the U.S. Federal Trade Commission (FTC) is going to be gridlocked with a 2-2 tie between Democrat and Republican appointees for a while.


Republicans in Congress have no plans to let President Obama appoint a tie-breaking fifth commissioner. This is not surprising when the administration has aggressively used regulatory agencies to affect commerce in ways never contemplated by the underlying legislation being enforced.

Why is this good for your business online?

A gridlocked FTC is more likely to focus on enforcing existing regulations covering ecommerce instead of coming up with new regulatory schemes that burden your business.

If the FTC enforced what’s already on the books, there are plenty of ways to go after false and deceptive trade practices online to protect consumers.

Will this gridlock be broken?

Yes…when the Obama administration gives an enticing carrot to congressional Republicans in exchange for getting a fifth commissioner appointed. That may not even occur in 2013. Until an appointment deal is reached, there’s likely to be a period of stability where the FTC’s consumer protection rules don’t significantly change.

What can a gridlocked FTC do?

The promotion of Commissioner Edith Ramirez to FTC Chairwoman means an increased focus on Internet privacy rights. This means you should review your ecommerce privacy practices with your Internet lawyer to ensure you’re complying with the law.

Hacking costs hotel chain

By Internet Lawyer

The U.S. Federal Trade Commission (FTC) has just sued a hotel chain for deceptive trade practices. Here’s what is alleged to have occurred.
Hackers repeatedly gained access to hotel guests’ credit card information. Of course, the credit cards were fraudulently billed. The credit card info was posted on a Russian website. So much for privacy.
The FTC contends that these acts meant the hotel engaged in deceptive and unfair practices.
The FTC claims that the hotel chain marketed and advertised to consumers the chain “had implemented reasonable and appropriate measures to protect personal information against unauthorized access.” However, the FTC contends the hotel chain “did not implement reasonable and appropriate measures to protect personal information against unauthorized access.”
It’s important to note that in addition to the FTC’s lawsuit against the hotel chain, the credit card companies, and the credit card holders may have additional claims they can bring for damages caused because of the fraudulent billings.
If you own a website that collects credit card and other personal information from clients, what are you doing to protect this data from hackers? Are you representing to the public that their information is secure?
These are issues that can’t be taken for granted, particularly when the FTC is willing to join the fight to protect consumers.

Internet Lawyer: Consumer Advocate or Devil’s Advocate?

By Internet Lawyer

grandparentsSome cannot understand how one can simultaneously represent some of the biggest Internet info product marketers while attacking others for unethical conduct. A public relations stunt? Loose cannon? What the heck is going on?

To understand the what, you’ll need to learn the why I’m about to share with you for the first time.

My grandparents and great-aunt instilled old-fashioned ethics in me from childhood. They grew up during the Great Depression and spent their working lives as blue collar employees. To them, “get-rich-quick” meant the stock market crash of 1929, massive unemployment, and doing without.

If I could sum up their views on how to live, it would be these words: “Do what is right.”

Have I always done the right thing? Of course not.

Like you, I’m human and have made mistakes (and hopefully learned enough not to repeat them).

But doing what is right is the goal post that I aim for each and every day.

Is there a conflict between representing “big gurus” and doing what is right? Not if the goal of those gurus is also to do the right thing.

Do these clients make mistakes? Of course. They’re human too.

And if there comes a time where a business decision is made to profit from knowingly doing wrong to clients, that’s where the attorney-client relationship quickly comes to an end.

Some claim that I’ve been too harsh on certain marketers who have engaged in fraudulent and deceptive business practices. But there is a difference. Those marketers who I’ve publicly criticized for such misconduct have not made a mistake. They’ve chosen a way of doing business that is designed to profit by taking advantage of others.

Exposing these Internet scams is done because it is the right thing both for consumers and honest online business owners who shouldn’t be tarnished by association with the so-called “guru” marketers.

This holiday season will be a tough one for me. My grandparents have passed away. In recent years, my great-aunt has been the sounding board that invariably answers “do the right thing.” Now terminally ill, I’ll be visiting with her for the last time this Thanksgiving.

I hope that in the coming years, I live up to her expectations to do what’s right. If that means offending some scam artists masquerading online as gurus, so be it.

Do old-fashioned ethics have a place in the way we do business with each other on the Internet? Absolutely.

That’s why a group of Internet marketers committed to doing the right thing has just formed the Internet Ethics Council. If you’re truly committed to treating your clients with courtesy and respect, you’ll want to join us.

Facebook Privacy: Privacy Lawsuit Accuses Facebook of Data Collection Misconduct

By Internet Lawyer

facebook-privacySome Facebook users have filed suit in a California state court claiming that Facebook violates state privacy laws. Since at least 2005, California has been on the cutting edge for protecting consumer data online. From an Internet law standpoint, state laws create a mass of confusion that really should be trumped by federal law. Why should a website owner based in New York, for example, be required to keep up to date on online privacy laws in 49 other states? That’s about as ridiculous as making the site owner collect state and local taxes wherever a purchaser happens to be located and remit it to the taxing authority.

Although ripe for federal preemption because of interstate commerce issues, be careful what you wish for. The power to legislate is the power to control those legislated. If you’re doing business in an Internet-friendly state like Texas, you may not be too happy with what Congress passes as an omnibus Internet privacy law…plus the regulations to go with it. Expect at a minimum a requirement that data collection occur only after afbusinessative opt-in to the collection process by site visitors, users, and clients. In other words, informed consent.

As for the particular Facebook suit, regardless of the outcome, expect user privacy protections to increase so that Facebook can continue to do business in other countries that are even more protective of privacy rights than the United States.

Hat tip: Jessica Vascellaro at WSJ

Should Affiliate Marketers Be Liable For What They Promote?

By Internet Lawyer

affiliate marketers hanging togetherShady Internet marketers continue to push the envelope when promoting continuity programs. A typical example from last week involves a marketer who wraps himself in his religion* as a way to dupe prospective clients and affiliates into thinking that he’s an honest guy.

This particular marketer is smart but don’t confuse intelligence with ethics. He’s the moral equivalent of a spammer.

What did he do? Read More