The Federal Trade Commission has approved a final consent order in the matter of Sears Holdings Management Corporation, following a public comment period, and authorized the staff to provide responses to the commenters of record. According to the FTC’s administrative complaint, Sears represented to consumers that software it was placing on their computers would track their “online browsing.” The FTC charged, however, that the software also monitored consumers’ online secure sessions – including sessions on third parties’ Web sites – and collected consumers’ personal 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.
According to the Commission, the software also tracked some computer activities that were not related to the Internet. Only in a lengthy user license agreement, available to consumers at the end of a multi-step registration process, did Sears disclose the full extent of the information the software tracked. The complaint charged that Sears’s failure to adequately disclose the scope of the tracking software’s data collection was deceptive and violates the FTC Act.
Under the consent order settling the charges, 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 also must disclose whether any data will be used by a third party.
The Commission vote approving the final order was 4-0. (FTC File No. 082-3099)