Nov 302010
 November 30, 2010  Posted by  Business, Featured News, Online, Youth & Schools

EchoMetrix, Inc., has settled Federal Trade Commission charges that it failed to adequately inform parents using its web monitoring software that information collected about their children would be disclosed to third-party marketers.

EchoMetrix sells its Sentry software to parents to allow them to monitor their children’s online activities. When Sentry is installed on a computer, parents can log in to their Sentry account and view the activity taking place on the target computer, including chat conversations, instant messaging and the web history.

According to the FTC, EchoMetrix also advertised Pulse, a web-based market research software program that it claimed would allow marketers to see “unbiased, unfiltered, anonymous” content from social media websites, blogs, forums, chats and message boards. One source of content available to Pulse users, the FTC alleged, was portions of the online activity of children recorded by the Sentry software.

The FTC charged that EchoMetrix violated federal law by failing to adequately disclose to parents, the Sentry subscribers, that it would share the information it gathered from their children through the use of its Sentry monitoring program with third-party marketers through Pulse. The only disclosure made to parents about this practice was a vague statement approximately 30 paragraphs into a multi-page end user license agreement.

To settle this case, EchoMetrix has agreed not to use or share the information it obtained through its Sentry program – or any similar program – for any purpose other than allowing a registered user to access his or her account. The settlement order also requires the company to destroy the information it had transferred from the Sentry program to its Pulse database of marketing information.

“Companies need to make clear disclosures about how they are going to use and share personal information they collect online – even more so when that information relates to children,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “In this case – because selling children’s information to marketers is completely contrary to the purpose of the parental monitoring software used to collect it – EchoMetrix agreed to an order that simply prohibits the company from using or sharing Sentry information for other purposes.”

The settlement also contains standard reporting and record-keeping provisions to allow the FTC to monitor compliance.

Complaints filed by both the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD) helped bring this matter to the FTC’s attention.

Source:  Federal Trade Commission

Documents related to this case can be found on FTC’s site.

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