Brief: Uber probed by US trade watchdog over privacy issues

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The news:

• The US Federal Trade Commission (FTC) – one of the country’s major regulatory agencies – is conducting an inquiry into Uber’s business practices, according to sources quoted by Recode.
• The probe is reportedly zeroing in on various privacy-related matters, such as the company’s handling of consumer data and its “God view” tool which allows it to track drivers and customers without their prior permission.

Why it matters:

• At this stage, it seems that the FTC inquiry is informal, with sources telling Recode that the watchdog regularly questions companies over consumer-protection concerns and often opts against the pursuit of legal penalties if it feels such action is unnecessary.
• However, if the FTC thinks that Uber is violating any laws or regulations, it may decide to open a more formal investigation and file a legal complaint against the company.
• Such legal proceedings can result in hefty fines and requirements to overhaul business practices. Uber itself has already been the subject of an FTC complaint. Earlier this year, it settled with the agency over charges it recruited drivers with exaggerated claims about their potential earnings. As part of its settlement with the FTC, Uber agreed to pay US$20 million to refund affected drivers.

Source: Recode.