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American Apparel Settles U.S. Consumer Privacy Claims

May 9 (Bloomberg) -- American Apparel Inc. settled a U.S. Federal Trade Commission case accusing the retailer of falsely claiming it was abiding by an international privacy program for transferring consumer data.

The company deceptively claimed it held a current certification under the safe harbor privacy framework between the U.S. and the European Union, the FTC said in a statement today. The framework is a voluntary program that allows U.S companies to transfer consumer data from the EU in compliance with EU law.

“The FTC is committed to making sure that when companies claim they’re participating in the U.S.-EU safe-harbor framework, they’re abiding by the terms of the program,” said Jessica Rich, the director of the FTC’s bureau of consumer protection.

The FTC’s effort to crack down on privacy violations by companies includes settlements with technology giants Google Inc. and Facebook Inc. Yesterday the agency settled claims that Snapchat Inc. deceived users by falsely promising its photo messages disappeared and misrepresented its data collection practices.

American Apparel, based in Los Angeles, is again in full compliance with the program, Peter Schey, a lawyer for the company, said in a statement.

“No customer was harmed in any way during the brief period when the company’s annual certification unintentionally lapsed but the company’s website indicated it was current,” he said.

The retailer also falsely claimed it was current with the U.S.-Swiss safe-harbor framework, the FTC said. Under the settlement, the company agreed not to misrepresent its participation in any privacy or data security program sponsored by the government.

To contact the reporter on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net Anthony Gnoffo

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