Cross-posted by at On The Docket

Last July, The Legal Pulse expressed its concern over the piecemeal nature of online consumer privacy regulation in the U.S.  Indicative of this disarray, we noted, was the response to Google Inc.’s acknowledgment that in the course of collecting information for its Google Maps Street View project, its roving vehicles inadvertently collected data, such as bits of web pages and email messages, over public, unsecured Wi-Fi networks.  The Federal Trade Commission was looking into it, Congressional heavyweights had rattled their sabres, and, of course, class action lawyers were circling.  On July 21, a band of America’s newest national regulators – state attorneys general – entered the fray, demanding answers from Google.  Now, yet another regulator has reportedly joined the fray – the Federal Communications Commission – but more on that in a moment.

On October 27, FTC formally ended its inquiry of the Google data collection, explaining that while it was troubled by Google’s “internal policies and procedures that gave rise to this data collection,” the Commission was satisfied by Google’s assurances that the data would not be used and that it would be deleted.  On the very same day, lest anyone think he or other state AGs had dropped the ball, Connecticut’s Richard Blumenthal released this statement (still available on his office’s home page):

Our investigation is continuing into Google’s alleged invasion of privacy through wireless networks until all the facts are verified. . . .Google’s story has changed during the course of our multistate investigation – demonstrating the need for sustained scrutiny. Rather than rely on Google’s explanations and assurances, our multistate coalition, led by Connecticut, will work to confirm the facts about how this happened and how consumers will be protected going forward.

Seizing upon a request by the Electronic Privacy Information Center to investigate, FCC this week injected itself into the Google Street View matter and, if we may extrapolate, the larger issue of internet privacy.  The Commission has been openly pursuing a larger role in regulating the online space, an effort which has run into resistance from regulated entities as well as the federal courts.  FCC’s authority to investigate the Street View matter is certainly open to question, but it is no surprise that the (Federal) Communications Commission has stepped into a regulatory space after the (Federal) Trade Commission has declined to take action.  It’s happened before.

In 2003, activist group Commercial Alert petitioned the FTC and FCC to develop regulations that mandate a warning for all instances of “product placement” (Home Depot vans bringing supplies on Trading Spaces; American Idol judges drinking branded soda) on television.  WLF was the only public interest group to file comments with the agencies in opposition to new regulations.  In February 2005, FTC announced it would not be developing new rules.  In June 2008, FCC released a Notice of Proposed Rulemaking suggesting rules which would significantly enhance its preexisting authority over product placement and micromanage how and when sponsorship disclosures would be made.  FCC has not yet issued final rules, but the initiative remains on its regulatory agenda.

FCC’s willingness to issue proposed rules on a matter on which another federal agency declined action should be rather discomforting to Google and others who might be affected by the agency’s interest in being a privacy regulator.  For those who create jobs and wealth through online commerce and the consumers who benefit from such commerce, FCC’s move could further exacerbate the disarray and discontinuity that characterizes online privacy regulation in America.