On June 29, 2016, the Federal Trade Commission (FTC) announced it had approved a final order resolving the complaint against Vipvape, a manufacturer of hand-held vaporizers. The complaint alleged Vipvape misrepresented its practices on the website related to Vipvape’s participation in the Asia-Pacific Economic Cooperation (APEC) Cross-Border Privacy Rules (CBPR) system when, if fact, Vipvape was not certified to participate in the APEC CBPR system.
In the Analysis of Proposed Consent Order to Aid Public Comment, the FTC explained that the APEC CBPR system is a voluntary, enforceable mechanism that certifies a company’s compliance with the principles in the CBPR and facilitates privacy-respecting transfers of data among APEC member economies. Companies seeking to participate in the APEC CBPR system must undergo a review by an APEC-recognized accountability agent, which certifies companies that meets the standards. The FTC alleged that Vipvape falsely represented it was a participant in the APEC CBPR system when it never sought or obtained certification from APEC CBPR and that Vipvape’s deceptive statement was a violation of Section 5 of the FTC Act.
FTC’s final order prohibits Vipvape from misrepresenting Vipvape is a member of, adheres to, complies with, is certified by, is endorsed by, or otherwise participates in any privacy or security program sponsored by a government or any self-regulatory or standard-setting organization, including APEC CBPR.
The FTC Chairwoman Edith Ramirez reportedly expressed “We are committed to vigorously enforcing cross-border privacy commitments” and “Consumers should be able to rely on a company’s claim that it is a certified participant in an international program designed to protect their personal information.”
The APEC CBPR system was developed by participating APEC economies after seeking the views of industry and civil society, to build consumer, business and regulator trust in cross border flows of personal information and endorsed by APEC Leaders in 2011. See more information on the APEC CBPR at http://www.cbprs.org/GeneralPages/About.aspx.