Dozens of US tech firms violate EU privacy promises

Advocacy group Center for Digital Democracy calls on the FTC to investigate 30 companies for their handling of personal information

Thirty U.S. data brokers and data management firms, including Adobe Systems, AOL, and Salesforce.com, are violating privacy promises they've made regarding their handling of the personal information of EU residents, a privacy group said in a complaint to be filed Thursday.

The 30 companies have all voluntarily committed to supporting the EU Safe Harbor framework, a set of standards for protecting the privacy of EU residents, but have failed to live up to those promises, the Center for Digital Democracy said in the complaint.

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The failure to honor EU Safe Harbor commitments constitutes a deceptive business practice, the CDD said in its complaint to the U.S. Federal Trade Commission. "The commercial surveillance of EU consumers by U.S. companies, without consumer awareness or meaningful consent, contradicts the fundamental rights of EU citizens and European data protection law," the complaint said.

The CDD called on U.S. and EU officials to suspend the program pending an investigation by the FTC, the U.S. agency responsible for enforcing the safe harbor provisions.

The 30 companies named in the complaint also include digital profiling firm Datalogix, marketing software maker Marketo, Oracle-owned data management firm BlueKai, and Neustar, a DNS and callrouting service that, after a recent acquisition, has also become a targeted advertising provider.

The companies in the complaint "create detailed digital dossiers" of EU residents, the CDD complaint said. The companies combine public records with online tracking technologies, mobile tracking and other sources, and can collect addresses, purchase histories, income and family structure, the CDD said.

In many cases, companies listed in the complaint are collecting more personal information from EU residents than described in their Safe Harbor statements, according to the CDD.

The CDD's investigation found that several digital tracking companies have "pervasive problems" with the Safe Harbor program, said Jeffrey Chester, the group's executive director. Many of the companies fail to provide "accurate and meaningful information" to EU residents and don't provide them the ability to opt out of data collection, he said.

Another problem is a "lack of candor on what data is actually collected," he said.

The CDD also criticized the FTC and the U.S. Department of Commerce, which helped to develop the Safe Harbor framework, for a lack of enforcement. The FTC settled Safe Harbor complaints with 14 companies in June. The Safe Harbor framework has been in place since 2000.

Neither agency "has put enough pressure on these companies to assure compliance," said Hudson Kingston, the CDD's legal director.

The European Commission is reviewing the Safe Harbor framework after questions from European lawmakers about whether it is strong enough. The framework "has not been operating as intended," Kingston said. "The Safe Harbor has not stopped American companies from deceiving EU consumers, using personal information in ways that have not been explained or consented to."

An FTC spokesman declined to comment on the CDD complaint. FTC Chairwoman Edith Ramirez, in an October speech, said the agency is "strongly committed to vigilant enforcement" of the Safe Harbor rules.

A representative of Oracle declined to comment on the complaint. Representatives of Adobe and AOL also declined to comment, saying they had not yet seen the complaint.

Representatives of several other companies named in the CDD complaint didn't return messages seeking comment.

Neustar disputed the report, saying the company and recently acquired marketing analytics subsidiary Aggregate Knowledge adhere to the company's privacy policies.

The Safe Harbor principles govern Neustar's use of personal information from the EU, said Becky Burr, the company's chief privacy officer. "We have great respect for the work of the Center for Digital Democracy, but they seem to be missing key facts here," she added by email.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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