Question 27
UnclassifiedWhich choice best reflects an unfairness concern under the FTC Act rather than merely a notice-quality issue?
Correct answer: A
Explanation
Section 5 of the FTC Act reaches practices that are "unfair" when they cause substantial consumer injury that is not reasonably avoidable and is not outweighed by benefits. A hidden data practice that causes "substantial unavoidable consumer harm with little offsetting benefit" fits that unfairness standard, while a mere notice-quality issue concerns disclosure, not injury and balancing.
Why each option is right or wrong
A. A hidden data practice causes substantial unavoidable consumer harm with little offsetting benefit
Section 5 of the FTC Act, 15 U.S.C. § 45(n), defines an unfair act or practice by three elements: the injury must be substantial, it must not be reasonably avoidable by consumers, and it must not be outweighed by countervailing benefits to consumers or competition. A concealed data practice that produces real consumer injury and leaves consumers no practical way to avoid it fits that statutory unfairness test; a complaint about the adequacy of notice alone goes to disclosure quality, not the injury-and-benefit analysis required by § 45(n).
B. A privacy notice uses a slightly smaller font on one page
C. A vendor prefers annual rather than quarterly meetings
D. A company writes its retention schedule in legal terms