The Federal Trade Commission is seeking public comment on two different topics: an upcoming workshop addressing the Internet of Things and a staff report with recommended changes to the Mail or Telephone Order Merchandise Rule.
On Nov. 21, the agency will host a public workshop to discuss the privacy and security issues posed by the “Internet of Things” which refers to the growing connectivity of consumer devices like cars, appliances, and medical devices – using a smartphone to adjust a thermostat or check vital signs, for example. “In the not too distant future, consumers approaching a grocery store might receive messages from their refrigerator reminding them that they are running out of milk,” the FTC cautioned.
Because connected devices can compile data – some of which could be sensitive – and share it with third parties, consumers face security and privacy risks, the FTC said. The agency presented several lines of inquiry for comment, including any information on the prevalence of use of such services and products, information about the various technologies that enable this connectivity and types of companies that are involved in the ecosystem, as well as any predictions about the future use of smart technology.
Additional questions included what privacy and security concerns are associated with the technology and the data involved, and what companies can do to prevent devices from becoming targets for malware or adware. The agency also wondered how to weigh privacy risks against the potential societal benefits of the technology.
The FTC will accept comments until June 1.
Turning to more traditional matters, the agency released a staff report recommending that the Commission adopt four changes to the 1975 Mail or Telephone Order Merchandise Rule.
The Rule currently requires sellers who solicit buyers via phone or mail to ship purchases within 30 days or a specifically advertised time frame; a buyer must consent to a delay in shipping or receive a refund for unshipped merchandise.
In 2007, the FTC accepted an initial round of public comment to update the Rule for the 21st Century. The proposed staff report now recommends four amendments to the Rule, including a name change. The Rule should be clarified to make explicit that it applies to orders placed over the Internet, the agency said. Therefore, the name should be updated to the “Mail, Internet or Telephone Order Merchandise Rule.”
Other changes include a requirement that refunds be made within 7 working days for purchases made with third-party credit; a revision to allow sellers to provide refunds and refund notices to buyers “by any means” at least as fast and reliable as first-class mail; and an update about a seller’s various obligations when buyers use payment methods not addressed in the original Rule, such as debit cards or prepaid gift cards.
Public comment will be accepted by the agency until July 15.
For more information about the Internet of Things workshop or to make a comment, click here.
To read the staff report on the recommended changes to the Mail or Telephone Order Merchandise Rule, click here.
Why it matters: The two opportunities for public comment provide a snapshot of the agency’s regulatory scope – from mail and telephone orders (now to include the Internet) to the technologically advanced Internet of Things, a topic new FTC Chairperson Edith Ramirez indicated she wanted to investigate.