Sears Settles FTC Charges Regarding Tracking Software
Sears Failed to Disclose Adequately that Software Collected Consumers’ Sensitive Personal Information
Sears Holdings Management Corporation – owned by Sears, Roebuck and Company and Kmart Management Corporation – has agreed to settle Federal Trade Commission charges that it failed to disclose adequately the scope of consumers’ personal information it collected via a downloadable software application. According to the FTC’s administrative complaint, Sears represented to consumers that the software would track their “online browsing.” The FTC charges that the software would also monitor consumers’ online secure sessions – including sessions on third parties’ Web sites – and collect information transmitted in those sessions, such as the contents of shopping carts, online bank statements, drug prescription records, video rental records, library borrowing histories, and the sender, recipient, subject, and size for web-based e-mails. The software would also track some computer activities that were not related to the Internet. The proposed settlement calls for Sears to stop collecting data from the consumers who downloaded the software and to destroy all data it had previously collected.
Under the proposed settlement, in addition to destroying information previously collected, if Sears advertises or disseminates any tracking software in the future, it must clearly and prominently disclose the types of data the software will monitor, record, or transmit. This disclosure must be made prior to installation and separate from any user license agreement. Sears must also disclose whether any of the data will be used by a third party.
The Commission vote to approve the administrative complaint and proposed settlement agreement was 4-0. The settlement contains standard reporting and record-keeping provisions to allow the agency to monitor compliance. The FTC will publish an announcement regarding the agreement in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through July 6, 2009, after which the Commission will decide whether to make it final. To file a public comment, please click on the following hyperlink: http://www.ftc.gov/os/2009/06/0823099publiccomment.pdf and follow the instructions at that site.
http://www.ftc.gov/opa/2009/06/sears.shtm