Retail Tracker Nomi Settles FTC Privacy Charges

US-based retail tracking firm Nomi Technologies has agreed to settle Federal Trade Commission (FTC) charges that it failed to provide consumers with an in-store mechanism to opt out of tracking, and to inform them when locations were using its tracking services.

Nomi, which recently merged with location-based behavioral intelligence firm Brickstream places sensors in its clients' stores that collect the MAC addresses of consumers' mobile devices as they search for WiFi networks. MACs are unique twelve-digit identifiers assigned to individual mobile devices, and while Nomi 'hashes' the addresses prior to storing them, the process still results in an identifier that is unique to a consumer's mobile device, and which can be tracked over time.

In 2012, Nomi's privacy policy promised that the company would provide an opt-out mechanism at stores using its services, and implied that consumers would be informed when stores were using its tracking technology. The FTC's complaint alleges that neither of these promises was kept.

According to the FTC, Nomi collected information on about nine million mobile devices within the first nine months of 2013 - tracking consumers both inside and outside clients' stores, and logging the MAC address, device type, date and time the device was observed, and its signal strength. In reports to clients, Nomi provided aggregated information on how many consumers passed by the store instead of entering, how long consumers stayed in the store, the types of devices used by consumers, how many repeat customers entered a store in a given period, and how many customers had visited another location in a particular chain of stores.

The settlement includes specific ongoing requirements for Nomi to accurately explain consumers' options for controlling the collection, use and sharing of their information. Jessica Rich, Director of the FTC's Bureau of Consumer Protection, commented: 'It's vital that companies keep their privacy promises to consumers when working with emerging technologies, just as it is in any other context. If you tell a consumer that they will have choices about their privacy, you should make sure all of those choices are actually available to them.'

Web sites: www.ftc.gov and www.nomi.com .