https://www.ftc.gov/business-guidance/resources/fighting-identity-theft-red-flags-rule-how-guide-business#who

Privacy by Design is a concept that the FTC endorsed in its 2012 report on protecting consumer privacy1. It seeks to deliver the maximum degree of privacy by ensuring that personal data are automatically protected in any given IT system or business practice2. It asserts that data held by an organization ultimately belongs to the consumer and organizations should ensure that data subjects are properly informed about how their data is collected and used3. Privacy by Design requires companies to build in consumers' privacy protections at every stage in developing their products, including reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy1. References: 1: FTC Report of
2012, p. 22-23; 2: Global Data Review3; 3: Termly4.

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Explanation

The FTC's privacy report, titled "Protecting Consumer Privacy in an Era of Rapid Change", proposed a framework for companies that collect and use consumer data. The framework consisted of three core principles: privacy by design, simplified consumer choice, and greater transparency. Privacy by design means that companies should incorporate privacy protections into their everyday business practices, such as data security, reasonable collection limits, sound retention practices, and data accuracy. Simplified consumer choice means that companies should provide consumers with clear and easy-to-understand choices about the collection and use of their data, and respect their preferences. Greater transparency means that companies should increase the visibility and accessibility of their data practices, such as providing clear and concise privacy notices, educating consumers about the commercial datapractices, and providing consumers with access to their data. Enhancing security measures is not one of the core principles of the FTC's privacy framework, although it is a component of the privacy by design principle. References:
* IAPP CIPP/US Body of Knowledge, Section I.A.1.a
* IAPP CIPP/US Textbook, Chapter 1, pp. 13-15
* FTC Privacy Report, Executive Summary, pp. i-vii