Three Companies Agree to Settle FTC Charges Over False Claims of EU-U.S. Privacy Shield Framework Participation

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Written By ESR News Blog Editor Thomas Ahearn

Three companies have agreed to settle Federal Trade Commission (FTC) charges that they misled consumers about their participation in the EU-U.S. Privacy Shield Framework designed by the U.S. Department of Commerce and European Commission to allow companies to transfer consumer data from the European Union (EU) to the United States (U.S.) in compliance with EU law, according to a FTC press release.

In separate complaints against human resources software company Decusoft, LLC, printing services company Tru Communication, Inc. (doing business as TCPrinting.net), and manager of real estate leases for wireless companies Md7, LLC, the FTC alleged that the companies violated the FTC Act by falsely claiming that they were certified to participate in the EU-U.S. Privacy Shield at www.privacyshield.gov.

“Today’s actions highlight the FTC’s commitment to aggressively enforce the Privacy Shield frameworks, which are important tools in enabling transatlantic commerce,” Acting FTC Chairman Maureen K. Ohlhausen stated in the press release about the charges. “Companies that want to benefit from these agreements must keep their promises or we will hold them accountable.”

The actions against the three companies are the first cases the FTC has brought to enforce the EU-U.S. Privacy Shield framework, which was put in place in 2016 to replace the U.S.-EU Safe Harbor framework. Like the Safe Harbor, the Privacy Shield is aimed at providing companies a mechanism to comply with EU data protection requirements when transferring consumer data between the EU and the United States.

Companies wishing to join the Privacy Shield must be subject to the jurisdiction of the FTC or the U.S. Department of Transportation, and certify to the U.S. Department of Commerce that they comply with the Privacy Shield Principles. The Department of Commerce maintains the list of companies that have joined the framework, while the FTC enforces the promises companies make in joining the Privacy Shield.

As part of their settlements with the FTC, Decusoft, LLC, Tru Communication, Inc., and Md7, LLC also are prohibited from misrepresenting the extent to which they participate in any privacy or data security program such as Privacy Shield sponsored by the government or any self-regulatory or standard-setting organization and must comply with FTC reporting requirements.

The agreements will be subject to public comment until October 10, 2017, after which the FTC will decide whether to make the proposed consent orders final. Comments may be submitted electronically by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section for Decusoft, LLC, Tru Communication, Inc., and Md7, LLC.

The FTC also alleged that Decusoft falsely claimed participation in the Swiss-U.S. Privacy Shield Framework. Despite these claims, all three companies failed to complete the certification process for the Privacy Shield, according to the FTC complaints. The FTC press release is at www.ftc.gov/news-events/press-releases/2017/09/three-companies-agree-settle-ftc-charges-they-falsely-claimed.

NOTE: The FTC issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the FTC that a proceeding is in the public interest. When the FTC issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $40,654.

ESR Completes Annual EU-U.S. Privacy Shield Re-Certification

Employment Screening Resources® (ESR) – a leading global background check firm – has received notification from the U.S. Department of Commerce’s International Trade Administration (ITA) that its annual submission for self-certification of adherence to the EU-U.S. Privacy Shield Framework has been finalized and is effective as of September 22, 2017. To learn more about ESR, visit www.esrcheck.com.

Related ESR News Blog: Employment Screening Resources (ESR) Completes Annual EU-U.S. Privacy Shield Re-Certification

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