Artificial Intelligence (AI) companies often rely on their user databases as a primary source to drive tech and business innovation. However, they also have privacy policies to safeguard user information, leading to a conflict between business goals and privacy commitments.
Companies may attempt to address this conflict by altering their privacy policies to expand data usage, potentially without informing users. They adopt more lenient data practices, such as sharing consumer data with third parties or using it for AI training, without transparently informing consumers through updated terms of service or privacy policies. However, such actions could lead to legal consequences if companies fail to uphold their privacy commitments.
The FTC has a history of challenging deceptive practices related to privacy policies that breach promises made to consumers. For example:
—20 years ago, the FTC charged Gateway Learning Corporation, the maker of “Hooked on Phonics,” for violating the FTC Act. This was due to changes in its privacy policy that allowed sharing consumer data with third parties without informing or obtaining consent from consumers.
—Last summer, the FTC accused a genetic testing firm of breaking the law by revising its privacy policy to widen the types of third parties with whom it could share consumers’ personal data retroactively. The FTC stated that the company did so without informing or obtaining consent from consumers who had previously shared personal data.
The FTC remains committed to taking action against companies involved in unfair or deceptive practices, including those that covertly alter their privacy policies or terms of service to gain unrestricted access to consumer data for product development.
Read more here: https://lnkd.in/eeBbXHKa
Need help making sure your business’ privacy policy is in compliance with the law? Contact us at Aspire Law
