NEWS10 November 2011

Online video ad network settles with FTC over Flash cookies

Legal North America

US— Online video ad network ScanScout has agreed to settle Federal Trade Commission (FTC) charges that it deceptively used Flash cookies to track consumers online.

The company’s privacy policy told consumers that they could opt out of receiving cookies by changing their browser settings, but that method neither blocked nor removed the Flash local shared objects (LSOs) that ScanScout employed, the FTC said.

Flash developer Adobe included a browser opt-out setting for LSOs in the most recent release of its Flash Player, but before that LSOs could only be managed through a dedicated settings menu that many web users found difficult to locate (it required a right-click on Flash content and selecting ‘global settings’ from a menu).

The FTC’s complaint covered the period April 2007 to December 2010. The proposed settlement agreement bars ScanScout from misrepresenting the extent to which consumers’ data is collected, used, shared or disclosed and requires the company to make it simpler for consumers to opt out of all tracking and targeting activities.

In the course of the FTC’s investigation ScanScout merged with Tremor Video, which is also subject to the settlement order.