The Federal Trade Commission announced that it has reached a proposed settlement with TRUSTe, a provider of privacy certifications for online businesses, over its privacy seal program. TRUSTe faced charges “that it deceived consumers about its recertification program for company’s privacy practices, as well as perpetuated its misrepresentation as a non-profit entity.” The FTC said:
TRUSTe provides seals to businesses that meet specific requirements for consumer privacy programs that it administers. TRUSTe seals assure consumers that businesses’ privacy practices are in compliance with specific privacy standards like the Children’s Online Privacy Protection Act (COPPA) and the U.S.-EU Safe Harbor Framework. […]
The FTC’s complaint alleges that from 2006 until January 2013, TRUSTe failed to conduct annual recertifications of companies holding TRUSTe privacy seals in over 1,000 incidences, despite providing information on its website that companies holding TRUSTe Certified Privacy Seals receive recertification every year. […]
The proposed order announced today will help ensure that TRUSTe maintains a high standard of consumer protection going forward. Under the terms of its settlement with the FTC, TRUSTe will be prohibited from making misrepresentations about its certification process or timeline, as well as being barred from misrepresenting its corporate status or whether an entity participates in its program. In addition, TRUSTe must not provide other companies or entities the means to make misrepresentations about these facts, such as through incorrect or inaccurate model language.
The settlement also requires the company in its role as a COPPA safe harbor to provide detailed information about its COPPA-related activities in its annual filing to the FTC, as well as maintaining comprehensive records about its COPPA safe harbor activities for ten years. Each of these provisions represents an increase in the reporting requirements laid out under the COPPA rule for safe harbor programs. The company must also pay $200,000 as part of the settlement.
If you wish to comment on the proposed settlement, you have until Dec. 17 to do so. More information on how to comment is available in the FTC’s announcement.