How Should Hyperlocal Sites Handle User Information?

Information about a hyperlocal site’s users is valuable, but should be handled with care. While Congress continues to mull over bills intended to add protection to consumer privacy, Federal Trade Commissioner Julie Brill warns that the FTC will remain active in scrutinizing the privacy practice of the online industry.

In a speech before the National Cyber Security Alliance on January 26, 2012 in Washington, Commissioner Brill insisted that greater transparency must be provided to users about what is being done with their personal information. “One way of putting this principle into practice is providing consumers with access to the information about them that a company processes,” Commissioner Brill pointed out in her speech. She recommends that data brokers “develop a user friendly one-stop shop where consumers can gain access to information that brokers have amassed about them and, in appropriate circumstances, can correct that information.”

Commissioner Brill was concerned about reports that information collected from online users may be used by insurance companies to set life insurance rates, or used by employers to assess whether “a person is a ‘good’ or ‘trustworthy’ employee.”  The FTC remains watchful on whether current industry initiatives to provide consumers with choices about their privacy are adequate. Such current initiatives mentioned by Commissioner Brill include the “do not track” mechanisms incorporated into some Web browsers, and the industry’s self-regulatory program for online behavioral advertising. Commissioner Brill warned that the success of these initiatives “hinges on a critical mass of players … participating and fully honoring the choices that consumers make.”

Commissioner Brill’s speech is a poignant reminder that hyperlocal online news publishers should be transparent on their information practices with their users. Such transparency should include what information publishers collect from their users, how the information may be used, whether publishers may share such information, what choices users have with their information, and keeping such data secure. Organizations such as the Electronic Frontier Foundation, the Direct Marketing Association and the Consumer Privacy Guide offer suggestions on privacy practices.

Disclosures and choices about user information typically are provided with a privacy policy. Users should have an opportunity to review and approve such information practices before they provide personal information about themselves. Hyperlocal news publishers should be mindful in honoring the promises they make with their users about their information practices and review their policies with their counsel.  Veering from these fundamental principles can lead to trouble, as it happened with Facebook when the FTC accused Facebook of sharing information about its users contrary to the promises made by Facebook in its privacy policy. Facebook settled with the FTC recently under a 20-year consent order in which it must take corrective measures with its users, such as obtaining users’ affirmative consent before Facebook makes changes to its privacy practices.

Brian Dengler is an attorney with Vorys Legal Counsel and journalist who covers legal issues in eMedia. He is a former vice-president of AOL, Inc., a former newspaperman, and an EMMY-winning TV journalist. He teaches new media issues as an adjunct at Kent State University and formerly at Otterbein University.