An increasing number of companies are making use of the massive quantities of data available online to predict consumer behavior, boost sales and otherwise anticipate trends. To be sure, data mining itself is not a new concept. But what is new is the application to consumer-provided data aggregated by Web 2.0 companies such as Google Inc. and Facebook Inc. As these data mining practices have grown, so, too, have concerns about how this data is being gathered and used. The federal government has taken notice, and calls for increased data privacy protections have not gone unanswered.

Indeed, two key developments have occurred in the past few months. In February, the White House released a Consumer Privacy Bill of Rights, which defined the president’s goals in this area. The Federal Trade Commission then issued a report on March 26, entitled “Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers.” The FTC privacy report, which expands on a preliminary report the FTC issued in December 2010, outlines voluntary “best practices” for businesses to protect the privacy of consumers and to give them greater control over the collection and use of their personal data. Attorneys should take note of both the Consumer Privacy Bill of Rights and the FTC privacy report and keep an eye out for future legislative action in this area.

The Consumer Privacy Bill of Rights

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