The National Law Forum

The Blog of the The National Law Review

Unlucky 13: FTC Settles Charges under International Safe Harbor Framework

Thirteen companies have agreed to settle with the Federal Trade Commission (FTC) charges relating to their participation in the U.S.–EU and U.S.–Swiss Safe Harbor Frameworks. Seven companies allegedly failed to renew their Safe Harbor self-certifications, including a sports marketing firm, two software developers, a research organization, a business information firm, a security consulting firm, and an e-discovery service provider. Another six allegedly failed to seek certification under the Frameworks, but nevertheless claimed in their privacy policies to be certified, including an amusement park, two sporting companies, a medical waste service provider, a food manufacturer, and an e-mail marketing firm. Last year, fourteen companies settled with the FTC over similar claims, and advocacy group named 30 companies in a complaint alleging that they were out of compliance with the Safe Harbor Frameworks.

The European Commission’s Directive on Data Protection prohibits the transfer of personal data to non-EU countries that do not meet the EU standard for privacy protection, so the U.S. Department of Commerce (DOC) negotiated the Safe Harbor Frameworks to allow U.S entities to receive such data provided that they comply with the Directive. To participate in the Safe Harbor Frameworks, companies must annually self-certify that they comply with seven key privacy principles for meeting EU’s adequacy standard: notice, choice, onward transfer, security, data integrity, access, and enforcement. Only appropriately self-certified companies may display the Safe Harbor certification mark on their websites, and the FTC is charged with enforcing violations.

This enforcement action is a reminder of the importance of maintaining current Safe Harbor status for those who elect to participate the program. It is also a reminder that companies must act in accordance with their published privacy policies, and periodically review their privacy policies to ensure that they remain current and reflect companies’ actual practices.

© 2015 Keller and Heckman LLP

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