FTC Recent Focus on Tech: Digital Advertising, Cloud
Increasing scrutiny of technology adoption and use
KPMG Regulatory Insights
Increasing scrutiny of technology adoption and use (e.g., cloud, AI) against effective risk management and consumer protections, including:
- Modern technology risk management, technology resiliency and operational resiliency
- Risk management and governance, data collection and privacy (see 2023 Regulatory Challenges: Technology and Resiliency; Data and Cybersecurity)
March 2023
The Federal Trade Commission (FTC) announces:
- Orders to social media and video streaming companies seeking information on corporate oversight of commercial advertising and efforts to mitigate potential “deception, fraud, and abuse”.
- A Request for Information (RFI) on business practices of cloud service providers and potential impacts on competition and data security.
These actions are highlighted in detail below:
Digital Advertising Information Collection Orders
In February 2023, the FTC released its annual Data Book Report finding that eleven (11) percent of frauds reported in 2022 noted “social media” as a contact method as well as associated consumer losses of $1.2 billion. (See KPMG Regulatory Alert, here.)
The FTC has now released orders seeking detailed information covering the calendar year 2019 through the information submission date from eight (8) companies regarding their policies, procedures, and practices to detect, prevent, and reduce potential deceptive commercial advertising and online shopping fraud. The FTC intends to use the information to better understand the potential for deceptive advertising on social media and video streaming platforms, associated consumers who “may be harmed”, and the effectiveness of companies’ oversight.
In summary, the information requested in the orders includes:
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Compliance Period. Companies subject to the orders are expected to file the requested information and documents within 45 days of the “date of service”.
RFI on Cloud Service Providers
The RFI seeks information on the business practices of cloud service providers and their impact on end users, customers, companies, and other businesses across the economy. The FTC is seeking this information as part of its study on market power, competition, and security risks; it is also seeking information about the impact of cloud computing on specific industries including healthcare, finance, transportation, eCommerce, and defense.
The RFI poses twenty (20) questions for public comment, covering multiple topics, including (as summarized by the FTC):
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Comment Period. The deadline for public comment on the RFI is May 22, 2023.
Note: The Department of the Treasury recently released a report on the adoption of cloud services in the financial services sector. (See KPMG Regulatory Alert, here.)
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FTC Recent Focus on Tech: Digital Advertising, Cloud
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