(Credit: Getty Images)
It’s common for companies to revise their privacy policies and terms of service agreements. But quietly making such changes could break law if the goal is to harness user data, according to the Federal Trade Commission.
“Market participants should be on notice that any firm that reneges on its user privacy commitments risks running afoul of the law,” the FTC wrote in a blog post.
The federal regulator issued the warning on Tuesday when the tech industry has been focused on collecting data from across the internet to train new AI algorithms. For many of these companies, the most readily available data comes from their own users. But mining and sharing such information for AI development can violate existing privacy policies—unless the company tries to alter the deal, the FTC notes.
“Companies might be tempted to resolve this conflict by simply changing the terms of their privacy policy so that they are no longer restricted in the ways they can use their customers’ data,” the commission wrote. “And to avoid backlash from users who are concerned about their privacy, companies may try to make these changes surreptitiously.”
However, the FTC says it can be illegal for companies to flip-flop on their data-collection policies because doing so could be seen as an unfair and deceptive trade act against consumers.
“A business that collects user data based on one set of privacy commitments cannot then unilaterally renege on those commitments after collecting users’ data,” the FTC said. Making such changes can also give users little recourse especially “once a firm has used attractive privacy commitments to lure them to the product only to turn around and then back out of those commitments,” the Commission added.
The FTC is signaling it’ll crack down on offenders. Hence, the warning could compel companies to be more upfront when asking users for permission to tap their data for AI training purposes. Back in August, Twitter/X introduced a privacy policy change about how the company could harness user data to train its AI models. But not everyone may have been aware of the revision since people rarely read through privacy policies.