Consumer Law & Policy Blog

Corey Ciocchetti Paper on the Future of Privacy Policies

Corey Ciocchetti has written The Future of Privacy Policies: A Privacy Nutrition Label Filled with Fair Information Practices, 26 John Marshall Journal of Computer and Information Law.  Here's the abstract:

E-commerce continues to blossom as evidenced by online retail sales in excess of $33 billion over the first quarter 2008. This growth helps spur the staggering economy but also magnifies the serious threats surrounding personally identifying information (PII) submitted during e-commerce transactions. The most common threats, such as identity theft and aggregated data files, do the most damage when companies are careless (i.e., losing laptops filled with unencrypted data) or callous (selling data on the open market) with the PII they collect. The first line of defense against these threats is the electronic privacy policy. In theory, privacy policies are supposed to force companies to analyze and strengthen their privacy practices and then provide Web surfers with a detailed picture of what happens to their information upon submission. Privacy policies are most effective when Web site visitors can locate, read and comprehend their terms. Armed with this knowledge, individuals are supposed to make accurate privacy assessments before submitting information online. Problematically, contemporary privacy policies fail to live up to their promise because they are posted inconspicuously, purposefully vague and filled with legalese. This inaccessibility leads Web surfers to ignore privacy practices completely while they continue to submit PII blindly.

Privacy policies can be effective if companies clearly and conspicuously discuss how their privacy terms relate to fair information practices (FIPs). FIPs are widely agreed upon guidelines covering the most important areas of the data trade - PII collection, use, storage and dissemination. The Federal Trade Commission has designated the five core FIPs to be notice, choice, access, integrity and enforcement. This article argues that a standardized privacy nutrition label - similar to the labels required by the Nutrition Labeling and Education Act - posted conspicuously on all e-commerce homepages can increase policy effectiveness. These federally mandated labels require companies to discuss their privacy practices in relation to each Key FIP. Although companies need not adopt specific policy terms or run their practices through a governmental clearinghouse, they must honestly disclose their practices. This is true of even the most unpopular practices such as external PII dissemination. Over time, consumers will become aware of these standardized labels, begin to understand FIPs, differentiate between privacy-protective and privacy-invasive practices and make better decisions before submitting PII.

Is "ambush marketing" a form of trademark infringement?

by Paul Alan Levy

Another example of trademark law getting too big for its britches is provided by a lawsuit by Major League Soccer and “Soccer United Marketing”, MLS’s affiliated marketing arm.  They claim that Black & Decker has infringed the trademarks of MLS and other soccer teams playing in games that MLS and SUM were promoting.  These games involved Mexican teams (and thus were of interest to Mexican-American consumers to which Black and Decker wanted to sell its tools).  Black and Decker was not overtly claiming any endorsement by the Mexican teams in question, but was offering tickets and soccer jerseys that Black and Decker had purchased in order to encourage fans to buy its DeWalt line of power tools, and was setting up its logo-laden tents and placing its logo-laden trucks in the stadium parking lots.   Apparently, MLS and the Mexican National Team already have an “official power tool” (Makita), and MLS objects to Black and Decker’s effort to use its games to market a different set of tools.

This is not the first time that companies have used “ambush marketing” to promote themselves, but calling that trademark infringement seems to be a dangerous stretch.  If Black and Decker has bought the tickets and the jerseys, why shouldn’t it be allowed to give them out on their own terms? 

Study of Medical Causes of Home Mortgage Foreclosures

Christopher T. Robertson of Harvard, Richard Egelhof , and Michael Hoke have co-authored Get Sick, Get Out: The Medical Causes of Home Mortgage Foreclosures, 18 Health-Matrix Journal of Law and Medicine.  Here's the abstract:

In recent years, there has been national alarm about the rising rate of home foreclosures, which now strike one in every 92 households in America and which contribute to even broader macroeconomic effects. The "standard account" of home foreclosure attributes this spike to loose lending practices, irresponsible borrowers, a flat real estate market, and rising interest rates. Based on our study of homeowners going through foreclosures in four states, we find that the standard account fails to represent the facts and thus makes a poor guide for policy. In contrast, we find that half of all foreclosures have medical causes, and we estimate that medical crises put 1.5 million Americans in jeopardy of losing their homes last year.

Half of all respondents (49%) indicated that their foreclosure was caused in part by a medical problem, including illness or injuries (32%), unmanageable medical bills (23%), lost work due to a medical problem (27%), or caring for sick family members (14%). We also examined objective indicia of medical disruptions in the previous two years, including those respondents paying more than $2,000 of medical bills out of pocket (37%), those losing two or more weeks of work because of injury or illness (30%), those currently disabled and unable to work (8%), and those who used their home equity to pay medical bills (13%). Altogether, seven in ten respondents (69%) reported at least one of these factors.

If these findings can be replicated in more comprehensive studies, they will suggest critical policy reforms. We lay out one approach, focusing on an insurance-model, which would help homeowners bridge temporary gaps caused by medical crises. We also present a legal proposal for staying foreclosure proceedings during verifiable medical crises, as a way to protect homeowners and to minimize the negative externalities of foreclosure.

Pay walls for news media web sites?

by Paul Alan Levy

The New York Times carries a story today about prospects for the news industry to obtain a revenue stream to support its content by erecting pay walls around their content.  Rupert Murdoch, who has long proclaimed his intention to establish a pay wall for all his papers (as he now has for the Wall Street Journal) is said to be trying to strike a deal with a search engine (apparently Microsoft’s Bing) whereby that one search engine would be given exclusive access to crawl its various sites and include their contents in its search results.  Apparently, no one news entity wants to go first with pay walls, because the pay walls do not provide enough revenue to have a substantial impact on their profit picture, and each entity fears that others will continue to provide free content and readers (and hence advertising dollars) will go elsewhere. 

Alan Mutter is quoted at the end of the story as offering this tongue-in-cheek diagnosis:  “One of the problems is newspapers fired so many journalists and turned them loose to start so many blogs . . .  They should have executed them. They wouldn’t have had competition. But they foolishly let them out alive.”

Discipline of Nurses Woefully Inadequate According to LA Times Expose

The LA Times reports today that the states' systems for disciplining nurses is broken. Among other things, it allows nurses whose care (or lack of care) may have killed or injured patients in one state to practice in another state without fear of discipline. Moreover, some states' disciplinary processes are beset by long delays. Public Citizen has for years ranked the states' systems for disciplining doctors. But nurses provide much of the care that patients receive in hospitals. Worth reading.

More on Vincent DiLorenzo's Mortgage Market Article and the CFPA

by Jeff Sovern

In October, I posted a link to my colleague Vince DiLorenzo's article Mortgage Market Deregulation and Moral Hazard: Equity Stripping Under Sanction of Law.  I've since had a chance to read the article, and wanted to post an additional comment. The article demonstrates the gulf between Congress's intent in enacting various consumer protection measures--generally, to protect consumers--and the philosophy that underlies the actions of administrative agencies in interpreting and implementing those measures--generally, a much more pro-business, anti-regulatory approach.  Though the article never mentions the idea of a Consumer Financial Protection Agency, it offers considerable support for such an agency by documenting how dramatically existing agencies failed to live up to the legislative intent. 

AALS Conference and Consumer Protection

It's a little tricky sometimes to figure out from the descriptions which sessions at the AALS Conference will touch on consumer protection; sometimes the blurbs refer to topics which are not covered in the sessions.  I'm listing the ones I can identify here, and if anyone knows of any others, please mention them in the comments.  Pat McCoy of Connecticut and I are speaking at the Financial Institutions and Consumer Financial Services Breakfast which runs from 7:00 a.m. to 8:30 on Friday the eighth.  We'll be talking about the case for the Consumer Financial Protection Agency. Pat, of course, is a leading writer on predatory lending. I plan to argue that the Fed failed to implement Truth in Lending in such a way as to help subprime borrowers understand what they were getting into in that the disclosure forms for many of the loans were misleading and essentially useless.  I believe a CFPA could have done better.   That event requires a ticket which has to be purchased in advance.  The description of the main meeting of that section (Friday 10:30 to 12:14) mentions regulation of consumer financial products, so perhaps it will touch on consumer law as well.  The description of the Section on Real Estate Transactions (Thursday, 2:00 to 5:00)  refers to the mortgage foreclosure and credit crises.  The Defamation and Privacy Section (Friday 4:00 to 5:45) lists as its topic "Fusion Centers and Beyond: New Challenges to Privacy."  The Remedies Section (Friday 4:00 to 5:45) includes in its blurb a reference to the subprime securitization crisis.  The Section on Commercial and Related Consumer Law (Saturday 10:30 to 12:15) will focus on software contracts.  Did I miss anything?

Bailed-Out AIG Execs Promised to Pay Back Bonuses But Largely Have Not

Check it out.

More on the CFPA, Credit Card Issuers, and Car Dealers

For more on Brian's post of yesterday about how credit card issuers are finding new ways to generate revenue, notwithstanding the Credit CARD Act, and how the CFPA could stop such actions, here's Jeff Gelles's take, In related news, BusinessWeek weighs in on the exclusion for car dealers in the House's  CFPA bill.  The headline: A Green Light for Car Dealers to Rip Off Buyers?  Anyone see a theme on what we expect of the CFPA? 

Will new North Face trademark lawsuit come back to bite it in the butt?

by Paul Alan Levy

North Face has sued a company called “South Butt,” whose slogan “Never Stop Relaxing” is a deliberate poke at the fashionable outdoors clothing company's "never stop exploring."  South Butt's logo comes close to being a mirror image of North Face’s logo.  South Butt has a Facebook application that invites users to distinguish between a face and a butt, a nice reflection of its legal defense.  Ht the Patent Law Blog  and Ronald Riley.