Once again, the Federal Trade Commission (FTC) has issued a warning to companies with online privacy policies: if your privacy policy misrepresents protection of users’ personal information either directly or indirectly, you risk being charged with unfair and deceptive business practices under the FTC Act. Most recently, the FTC entered into an agreement with Myspace and issued a consent order to settle a complaint it filed against the social networking website. This alert will examine the important components of the FTC complaint, focusing on how Myspace indirectly shares its users’ personally identifiable information (PII) in violation of its own privacy policy, and the FTC consent order, which provides yet another road map for companies to stay on the “right” side of the privacy road.

The Complaint

Specifically, the FTC alleged that Myspace’s actions contradicted its own privacy policy in the following ways...