FTC Settles Another Claim of Misrepresentation of US-EU Safe Harbor Compliance: In re Fantage.com, Inc. | Practical Law

FTC Settles Another Claim of Misrepresentation of US-EU Safe Harbor Compliance: In re Fantage.com, Inc. | Practical Law

The FTC announced it has reached a settlement with Fantage.com, Inc., which, the FTC alleged, violated Section 5(a) of the FTC Act by falsely claiming to have a current certification of compliance with the US-EU Safe Harbor Privacy Framework.

FTC Settles Another Claim of Misrepresentation of US-EU Safe Harbor Compliance: In re Fantage.com, Inc.

by Practical Law Intellectual Property & Technology
Published on 12 Feb 2014 • USA (National/Federal)
The FTC announced it has reached a settlement with Fantage.com, Inc., which, the FTC alleged, violated Section 5(a) of the FTC Act by falsely claiming to have a current certification of compliance with the US-EU Safe Harbor Privacy Framework.
On February 11, 2014 the FTC issued a press release announcing it had reached a settlement with Fantage.com, a children's online entertainment company, which allegedly falsely claimed it "follow[s] the privacy principles of the U.S.-EU Safe Harbor Privacy Framework" (79 Fed. Reg. 9465-03, (Feb. 19, 2014)).
According to the FTC's complaint:
  • Fantage.com stated repeatedly in its website privacy policy and elsewhere on the www.fantage.com website, that the company follows US-EU Safe Harbor principles.
  • These statements falsely and misleadingly represented, expressly or by implication, that Fantage.com held a current US-EU Safe Harbor compliance certification when, in fact, Fantage.com had let its certification lapse.
  • Fantage.com's false and misleading representations constituted deceptive acts or practices in violation of Section 5(a) of the FTC Act.
However, the FTC's press release specially notes that the FTC's claims against Fantage.com were limited to the company's misstatements of Safe Harbor compliance certification, and did not necessarily suggest that Fantage.com committed any substantive violation of either:
  • Safe Harbor privacy principles.
  • Other privacy laws.
The proposed settlement, which is subject to public comment, prohibits Fantage.com from misrepresenting the extent to which it is a member of, adheres to, complies with, is certified by, is endorsed by, or otherwise participates in any privacy or data security program sponsored by the US government or any other self-regulatory or standard-setting organization. Interested parties may comment through March 13, 2014.
The FTC's complaint against Fantage.com and its proposed settlement underscore the extent to which the FTC currently holds website holders and content providers accountable, not only for compliance with the terms of their own online privacy policies, but also for the truth of any representations they make concerning their:
  • Compliance with Safe Harbor or other privacy standards.
  • Certification of Safe Harbor or other privacy standards compliance.