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FTC charges American Apparel with deceptive claims on privacy compliance


Clothing manufacturer American Apparel Inc. has agreed to settle Federal Trade Commission charges that it falsely claimed it was abiding by a privacy framework that enables U.S. companies to transfer consumer data from the European Union to the United States in compliance with E.U. law, the agency said.

The Los Angeles-based clothing manufacturer was charged with violating the U.S.-E.U. Safe Harbor framework.

The Safe Harbor was developed by the U.S. Department of Commerce in consultation with the European Commission to reconcile the European Union's standard for privacy protection, which is based on comprehensive legislation, with the different approach taken by the United States, which relies on a mix of legislation, regulation and self-regulation, according to the U.S. Department of Commerce. It was approved by the European Union in 2000.

To participate in the voluntary program, firms self-certify annually to the Department of Commerce.

The FTC charged that American Apparel deceptively claimed it held current certifications under the U.S.-E.U. framework and the separate U.S.-Swiss Safe Harbor framework.

The FTC said that American Apparel represented through statements in its privacy policy that the company held current Safe Harbor certifications, even though it had allowed its certifications to lapse. The FTC said; however, this does not necessarily mean the company committed any substantive violations of the Safe Harbor framework's privacy principles.


Under the proposed settlement agreement, American Apparel is prohibited form misrepresenting the extent to which it participates in any privacy or data security program sponsored by the government or any other self-regulatory or standard-setting organization, the FTC said Friday in a statement.

The proposed settlement agreement, which was approved by the commission 4-0, with one commissioner not participating, will be subject to public comment until June 9, 2014, after which the commission will decide whether to make the proposed consent order final.

Once it is final, each violation is subject to civil penalty of up to $16,000.

“The FTC is committed to making sure that when companies claim they're participating in the U.S.-E.U. Safe Harbor Framework, they're abiding by the terms of the program,” said Jessica Rich, director of the FTC Bureau of Consumer Protection, in a statement.

An American Apparel spokesman could not immediately be reached for comment.