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FTC sides with Amazon.com in privacy dispute

FTC sides with Amazon.com in privacy dispute

The US Federal Trade Commission (FTC) sided with Amazon.com in a dispute with two privacy groups that accused the online retailer of deceiving its customers by changing its privacy policy to permit disclosure of personal information to third parties.

In a two-page letter to the Electronic Privacy Information Center (EPIC) and Junkbusters Corp. on Thursday, the FTC said Amazon.com didn't violate federal trade practices when it altered its privacy policy. The FTC noted that "despite the ambiguity of its revised policy on this issue," Amazon said it wouldn't release private information to third parties from consumers who previously selected "never" in an opt-out clause on its Web site.

In addition, the FTC stated: "Amazon has informed the FTC that it has never sold, traded or rented the personal information of any of its customers ... and it will not do so without notice to its customers and an opportunity for them to choose not to have their information shared."

In December, EPIC and Junkbusters asked the FTC to determine whether Amazon.com had deceived the public by changing its privacy policy in violation of Section 5 of the Federal Trade Commission Act. The organisations maintained that the changed privacy policy is inconsistent with its previous policy, which said the company would never disclose customer information to third parties.

In September, Amazon.com changed its privacy policy to allow disclosure of personal customer information under certain circumstances, including if the company were purchased or if it sells one of its units.

The groups had asked the FTC to prohibit Amazon from disclosing information about its customers without their prior consent. They also requested the FTC to require the retailer to offer its customers the option to delete all information about their identity and purchases, to tell each customer on request exactly what information it has disclosed or exchanged with other companies and to provide complete access to their customer profiles.

Officials at Amazon.com couldn't be reached for comment before deadline.

Mark Rotenberg, executive director of EPIC, said during a conference call today that he appreciated the FTC's investigation as well as a 10-page response by Amazon.com, but that the FTC interpreted the two groups' complaint too narrowly. Rotenberg said their complaint focused on Amazon's change in policy, not whether it had sold information to third parties.

"From our perspective, whether or not [Amazon.com] may have disclosed [information] is not as critical as what they are allowed to do in the future," he said. "Our view is that this is not a good signal to send to the online community."

Jason Catlett, president of Junkbusters, added that privacy laws need to be more specific and must target the selling of information between unrelated businesses, such as a bookseller and a telemarketing company. "If one bookseller buys another bookseller, there's no violation in my opinion," he said. "The consent should be needed before information is used for a secondary purpose."

Rotenberg said his organisation is reviewing its options. He said EPIC may file a formal complaint in federal court or seek congressional action.

"Our view is that there is fairly broad support for stronger privacy regulations," Rotenberg said. "I think that's where most people are right now with personal information disclosure on the Internet. I think most people would be uncomfortable with the books they buy being freely disclosed."


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