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FTC: Sears Must Destroy Tracking Data
In the US, the Federal Trade Commission has finalised a settlement with retailer Sears Holdings Management Corporation over its use of browser tracking software between April 2007 and January 2008.
Sears showed pop-up ads to 15 out of every 100 visitors, asking for their email addresses, and then emailed invites to download the tracking software and use it for a month in exchange for $10. The retail giant said in a statement that when they downloaded the software, consumers were 'informed upfront of the nature of the work being conducted and were paid for their participation'.
Sears, which must now destroy all the data collected in the period, has promised to 'clearly and prominently' notify Web users about any tracking applications in the future, but says it did so in this case anyhow.
This week's settlement, initially proposed in June, has surprised US legal experts who say it moves the goalposts regarding potential online privacy violations, requiring companies to err on the side of caution. Privacy lawyer Alan Charles Raul of Sidley Austin, in an item submitted to the FTC for the case and reported on www.mediapost.com , commented: 'Before this case, one would likely have considered Sears's disclosures both legally valid and commonplace... 'The proposed Sears settlement is at odds with established industry and regulatory practice allowing consumers to opt in to contracts of their choice.'
However, the FTC has underlined its commitment to keeping an eye on behavioral targeting, in a letter to the New York Consumer Protection Board, noting: 'The Commission is concerned about the privacy implications of online tracking data, particularly in the context of online behavioral advertising... The Commission continues to encourage industry to do a better job of disclosing infornation collection practices to consumers.'
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