NEWS5 June 2009

FTC raps Sears over website tracking software

Government Legal North America Privacy

US— Retail group Sears Holding Management, which owns Sears and K-Mart, has fallen foul of the Federal Trade Commission (FTC) after failing to properly notify customers who signed up to a research community that it was installing tracking software on their computers.

People signing up to the community were shown a message explaining the terms and conditions, but the notice that their browsing would be tracked was tucked away in the 75th line of the text.

The FTC said that this did not sufficiently explain the software or give it enough prominence and so has ordered the firm to “destroy any collected information” within five days as part of a settlement between the two. Sears must also stop collecting data within three days of the agreement being signed.

The complaint described Sears’ actions as “unfair or deceptive acts” which violated Section 5 of the Federal Trade Commission Act.

Sears must “clearly and prominently” inform customers that their browsing habits may be tracked in the future and “obtain express consent” before beginning any monitoring. The firm must also remove the software from affected customers’ computers within 30 days.

The software was installed on computers between April 2007 and January 2008. The FTC said Sears was working with a research agency, but did not reveal which one. However, according to Harvard Business School professor Ben Edelman, who investigated the technology, the agency was ComScore.