Analysis of Proposed Consent Order to Aid Public Comment

In the Matter of American Apparel, Inc., File No. 1423036

The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final 

approval, a consent agreement applicable to American Apparel, Inc. (“American Apparel”). 

The proposed consent order has been placed on the public record for thirty (30) days for 

receipt of comments by interested persons. Comments received during this period will become 

part of the public record. After thirty (30) days, the Commission will again review the 

agreement and the comments received, and will decide whether it should withdraw from the 

agreement and take appropriate action or make final the agreement’s proposed order. 

This matter concerns alleged false or misleading representations that American Apparel

made to consumers concerning its participation in the Safe Harbor privacy frameworks agreed 

upon by the U.S. and the European Union (“EU”) (“U.S.-EU Safe Harbor Framework”) and the 

U.S. and Switzerland (“U.S.-Swiss Safe Harbor Framework”). It is among several actions the 

Commission is bringing to enforce the promises that companies make when they certify that they 

participate in the U.S.-EU Safe Harbor Framework and/or the U.S.-Swiss Safe Harbor 

Framework (“Safe Harbor Frameworks”). The Safe Harbor Frameworks allow U.S. companies 

to transfer data outside the EU and Switzerland consistent with European law. To join the Safe 

Harbor frameworks, a company must self-certify to the U.S. Department of Commerce 

(“Commerce”) that it complies with a set of principles and related requirements that have been 

deemed by the European Commission and Switzerland as providing “adequate” privacy 

protection. These principles include notice, choice, onward transfer, security, data integrity, 

access, and enforcement. Commerce maintains a public website, www.export.gov/safeharbor, 

where it posts the names of companies that have self-certified to the Safe Harbor frameworks. 

The listing of companies indicates whether their self-certification is “current” or “not current.” 

Companies are required to re-certify every year in order to retain their status as “current” 

members of the Safe Harbor frameworks. 

American Apparel is a clothing manufacturer and retailer with more than 200 stores 

worldwide. According to the Commission’s complaint, since at least June 2012, American 

Apparel has set forth on its website, www.americanapparel.net, privacy policies and statements 

about its practices, including statements related to its participation in the U.S-EU Safe Harbor 

Framework and the U.S.-Swiss Safe Harbor Framework. 

The Commission’s complaint alleges that American Apparel falsely represented that it 

was a “current” participant in the Safe Harbor Frameworks when, in fact, from June 2013 until 

December 2013, American Apparel was not a “current” participant in the Safe Harbor

Frameworks. The Commission’s complaint alleges that in June 2012, American Apparel

submitted self-certification to the Safe Harbor Frameworks. American Apparel did not renew its 

self-certification in June 2013 and Commerce subsequently updated American Apparel’s status

to “not current” on its public website. In December 2013, American Apparel renewed its selfcertification to the Safe Harbor Frameworks and its status was changed to “current” on 

Commerce’s website. 
Part I of the proposed order prohibits American Apparel from making misrepresentations 

about its membership in any privacy or security program sponsored by the government or any 

other self-regulatory or standard-setting organization, including, but not limited to, the U.S.-EU 

Safe Harbor Framework and the U.S.-Swiss Safe Harbor Framework.

Parts II through VI of the proposed order are reporting and compliance provisions. Part 

II requires American Apparel to retain documents relating to its compliance with the order for a 

five-year period. Part III requires dissemination of the order now and in the future to persons 

with responsibilities relating to the subject matter of the order. Part IV ensures notification to the 

FTC of changes in corporate status. Part V mandates that American Apparel submit an initial 

compliance report to the FTC, and make available to the FTC subsequent reports. Part VI is a 

provision “sunsetting” the order after twenty (20) years, with certain exceptions. 

The purpose of this analysis is to facilitate public comment on the proposed order. It is 

not intended to constitute an official interpretation of the proposed complaint or order or to 

modify the order’s terms in any way.