The FTC data security and privacy update explained

Staying up to date with government regulations is essential for overall business success, as federal agencies like the FTC (Federal Trade Commission) have handed out fines worth billions. These FTC data privacy fines could mean the end of many non-compliant businesses.

In this mini guide, we’ll talk about the new FTC privacy and data security update so you can make preparations and protect yourself and your customer data.

What does the FTC do, and how does it propose rules?

Founded in 1914, the FTC is a federal agency that prevents unfair, anti-competitive, and deceptive business practices. For example, they pass laws telling businesses to protect customer data, preventing it from landing in the hands of criminals.

The FTC privacy rulemaking process involves publishing a notice with the proposed text on its website and explaining the reasoning behind it. Keeping current with FTC data privacy updates is necessary because any prohibited practices can prompt hefty fines.

A famous example of this is Facebook. In 2012, Facebook ignored an FTC order by deceiving users about their ability to control personal information. As a result, Facebook was hit with a $5 billion fine.

Why should I care about FTC rulemaking?

FTC rulemaking can impact your business and community in multiple ways. For instance, FTC rulemaking will protect children’s data and ensure you aren’t taken advantage of by companies that collect data about your health and financial situation.

The FTC’s latest update

There are two main FTC data security and privacy updates that you want to watch out for in 2022:

• Commercial surveillance
• Advanced Notice of Proposed Rulemaking (ANPRM)

1. Commercial surveillance

The primary area of concern for businesses is commercial surveillance. The FTC is starting to crack down on companies collecting, analyzing, and selling structured data for a profit. This is because increased surveillance and lax data security heighten the risk of breaches, manipulation, and other forms of abuse.

2. Advanced Notice of Proposed Rulemaking (ANPRM)

The FTC also announced an initiative called the Advanced Notice of Proposed Rulemaking (ANPRM). This allows anyone to propose new rules and ideas that’ll suppress unethical customer data practices. This means that as business owners, we can expect to see more privacy bills introduced shortly.

So, what does this mean for businesses?

The new FTC data privacy enforcement rules may seem all doom and gloom. But these updates can help your business stand out. In a nutshell, you’ll want to consider three factors:

• You must keep up to date with new government regulations
• Protecting customer data is essential for business success
• The days of buying third-party information are over

1. You must keep up to date with new government regulations

Since the FTC and other government agencies release privacy updates frequently, it’s more important than ever to stay up to date.

Fortunately, if you’re following the Lytics blog and other websites covering data privacy and security, you’ll be notified about all updates. This makes it super convenient to introduce the appropriate changes to your business processes.

2. Protecting customer data is essential for business success

As a rule of thumb, if you put effort into protecting customer data and don’t use unethical business practices, you should be fine. The problem is that many businesses don’t protect their customers’ information. Instead, they’ll store it in a simple spreadsheet; anyone with a link to this spreadsheet can access sensitive data.

So we suggest using a secure customer data platform and limiting who has access to this data.

We also recommend only collecting data that’s absolutely necessary for you to personalize the customer experience. If a piece of information doesn’t offer value, don’t ask for it, as it’ll increase the likelihood of data breaches.

3. The days of buying third-party data are over

If you’re still buying third-party data to make marketing decisions, you’ll have to start collecting your own data. Most government privacy regulations discourage—or even outright ban—buying customer data.

Also, buying third-party data isn’t effective. Most of the time, third-party data is low-quality because providers aren’t concerned with the accuracy of the data; they just want a large database.

Instead, focus on collecting first-party data. Not only is it cheaper in the long run, but it’ll also take your marketing campaigns to the next level, as it’s more accurate.