Case Detail
| Case Title | CENTER FOR DIGITAL DEMOCRACY v. FEDERAL TRADE COMMISSION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| District | District of Columbia | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | Washington, DC | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Case Number | 1:2014cv02084 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Date Filed | 2014-12-11 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Date Closed | 2016-06-01 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Judge | Judge Amit P. Mehta | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plaintiff | CENTER FOR DIGITAL DEMOCRACY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Case Description | The Center for Digital Democracy submitted a FOIA request to the Federal Trade Commission for records concerning annual reports submitted under the Children's Online Privacy Protection Act rule, such as reports on safe harbor programs. The Center also requested a fee waiver. The agency acknowledged receipt of the request and indicated that it would not be able to respond within 20 days. After hearing nothing further from the agency, the Center filed suit. Complaint issues: Failure to respond within statutory time limit, Litigation - Attorney's fees | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Defendant | FEDERAL TRADE COMMISSION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Documents | Docket Complaint Complaint attachment 1 Complaint attachment 2 Complaint attachment 3 Complaint attachment 4 Complaint attachment 5 Opinion/Order [15] FOIA Project Annotation: Judge Amit Mehta has ruled that disclosure of most of the information contained in annual reports submitted to the Federal Trade Commission by companies that offer safe harbor programs for websites and online services directed at young children that are required to comply with the Children's Online Privacy Protection Act is protected under both the competitive harm and impairment prongs of Exemption 4. Although Congress gave the FTC the authority to promulgate a Children's Online Privacy Protection Rule, once that rule was established, the online privacy policies were to be largely self-enforced. In 2013, the FTC began to require that safe harbor programs submit annual reports "to better ensure that all safe harbor programs keep sufficient records and that the Commission is routinely apprised of key information about the safe harbors' programs and membership oversight." In requiring the annual reports, the FTC also noted that they would be useful in "informing the Commission of the emergence of new feasible parental consent mechanisms for operators." The Center for Digital Democracy requested the first batch of annual reports submitted in 2014. The agency located six annual reports that had been submittedâ€"a total of 88 pagesâ€"disclosed two pages in full, 36 pages with redactions, and withheld 56 pages entirely. The agency claimed Exemption 4 (confidential business information) and Exemption 3 (other statutes), citing Section 6(f) of the Federal Trade Commission Act, which largely parallels Exemption 4's coverage. The agency identified eight categories of information it considered exempt, but the Center for Digital Democracy only challenged three of those categoriesâ€"(1) interpretations and analyses of the COPPA Rule; (2) membership statistics and market shares; and (3) remediation and disciplinary rates. The agency argued that disclosure of the withheld portions would both impair the agency's ability to obtain information in the future and would likely cause competitive harm to the safe harbor program operators. Mehta agreed the agency had shown that both prongs of the National Parks test applied to the withheld records. First addressing the impairment claim, Mehta indicated that "the potential for impairment in gathering information is not limited to the question whether an agency has power to compel disclosure in the future." Although case precedent on impairment has frequently concluded that an agency's access to information cannot be impaired if it can compel a submitter to provide the information, Mehta explained that "rather, it encompasses the possibility that suppliers of information, as a consequence of public disclosure, will narrowly construe the government's request and thereby seriously impair the government's information-gathering ability." This is an argument that has frequently been used by submitters to suggest that the quality of information is just as important as the quantity, but has usually been discounted because submitters have their own incentive to provide a sufficient amount of information to satisfy government regulators. But under these unique circumstances, Mehta's observation is probably apt. He noted that both the quality and quantity of the reports varied dramatically, largely because the FTC's reporting requirements were so vague and open to interpretation. Coupled with the fact that these reports were the first of their kind, the quality and quantity of data reported by the safe harbor operators likely would reflect on the ability of the companies to interpret the reporting requirements. Indeed, Mehta explained that "it is reasonable to conclude that the prospect of public disclosure provides a disincentive to safe harbor programs to provide information to the FTC." He added that "it is not difficult to fathom that, in the future, in order to avoid public disclosure of information that they consider proprietary or confidential, safe harbor programs would reduce the amount and kind of information that they provide to the FTC." The Center argued that if the FTC found it was not getting sufficient information, it could just revise the reporting requirements. Mehta found this solution impractical and indicated that "Congress set up a largely self-regulating marketplace, driven by industry standard-setting, to promote compliance with COPPA. No doubt Congress knew that information from private enterprises would be more difficult for the public to obtain under FOIA. But that is the balance it struck." He observed that "the nonpublic analyses, if revealed, at most would disclose the inner workings of private safe harbor programs. It would tell the public little, if anything, about how the FTC itself operates." The Center did not contest the agency's claims as much as it argued that disclosure of the data would be in the public interest because it would allow safe harbor program operators to learn from each others' experiences. But Mehta pointed out that in Public Citizen Health Research Group v. FDA, 185 F.3d 898 (D.C. Cir. 1999), the D.C. Circuit had rejected the argument that disclosure was in the public interest because it might improve the way companies conducted clinical trials. Instead, the D.C. Circuit emphasized that the only public interest balance in FOIA was to shed light on government activities or operations. Mehta noted that "so it is here. Plaintiff's argument that the COPPA Rule would function better if safe harbor programs' interpretations of the Rule were made public does not bolster the case for disclosure. Indeed, the impact that public disclosure would have on the efficacy of the COPPA Rule is irrelevant." The Center also argued that disclosure would not cause competitive harm because much of the information was publicly available online. Dismissing that argument, Mehta indicated that "the fact that the safe harbor programs' guidelines and commentary are public does not divest a company's specific application of those guidelines of commercial value. In a marketplace where companies compete. . .how a company interprets the COPPA Rule in a specific setting may well give it a competitive advantage." Mehta found that membership statistics and remediation and disciplinary rates could cause competitive harm if disclosed. He agreed with the agency's determination that "the disclosure of discipline rates is likely to cause substantial competitive harm because competitors could use that information to convince potential customers that a rival is too strict or too lenient."
Issues: Exemption 4 - Competitive harm, Exemption 4 - Impairment of agency | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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