In defending the FTC’s jurisdiction and record on privacy matters, Commissioner Ohlhausen recently argued that the FTC has a long history in policing privacy–it brought cases even pre-internet.
Commercial espionage was among the turn-of-the-century problems that the FTC was created to address. The FTC brought several matters in the 1910s, including a 1918 matter where it issued a cease and desist order against a company that dealt with nosy competitors by crashing delivery trucks into them. The FTC issued a narrow order, telling the company to stop “causing any of [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][its] trucks…to collide with automobiles owned and operated by any competitor…at times when the automobiles of such competitor may be following the trucks of…The Brown Co.”[1] In another matter, it ordered a company to not employ detectives in order to discover competitors’ customer lists.[2]
But these efforts concerned protecting companies from competitors’ aggressive behavior. It was not until 1951 that the FTC intervened to protect consumers from unfair collections of personal information. In the Gen-O-Pak matter, the FTC brought an administrative proceeding against a company that helped creditors locate debtors by sending debtors postcards promising a free gift in exchange for their personal information. One card read, “Dear Friend: We have on hand a package, which we will send to you if you will completely fill out the return card, giving sufficient identification to warrant our sending this package to you…There are no charges whatsoever and the package will be sent to you all charges prepaid. Yours very truly, The Gen-O-Pak Co.” The cards and surveys were sent on behalf of creditors, and solicited extensive personal information. The FTC found this practice both unfair and deceptive.[3]
Note that Gen-O-Pak designed the cards, sold them to creditors, sent them to debtors, and collected information on behalf of the creditors. The matter is thus similar to recent Commission efforts against malware where it has used a “means and instrumentalities” rationale for pursuing companies that create software than enables invasions of privacy.
[1] FTC v. American Agricultural Chemical Co. and the Brown Co., 1 FTC 226 (1918).
[2] In the Matter of the Oakes Company, 3 FTC 36 (1920).
[3] Lester Rothschild, Trading As Gen-O-Pak Co., 49 FTC 1673 (1952); Rothschild v. FTC, 200 F.2d 39 (7th Cir. 1952).
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