Sears Holdings Settles FTC Behavioral Tracking Complaint
Sears Holdings Corp. has settled with the Federal Trade Commission on a complaint that it persuaded consumers to agree to the collection of data about their online activities without giving them a full warning about the scope of the collection effort.
The charges relate to a complaint by the FTC against online market research SHC conducted from April 2007 through January 2008. During that time, according to the commission, Sears delivered pop-up ads to 15 of every 100 visitors to its Web site, inviting them to submit their e-mail address. Those who did so were then invited to join “My SHC Community” by downloading software that would monitor “online browsing.”
Users were allegedly told that joining the community would help them keep track of items such as warranties on their Sears-bought appliances. They were also offered $10 as an inducement to opt in.
According to the FTC, the Web tracking Sears then engaged in extended to non-Sears sites and included online banking transactions, names and addresses of e-mail correspondents, online video rentals and health and prescription information users had stored on the Internet.
Most users did not realize the real scope of this monitoring at sign-up, the commission alleged. While the software license produced at download explained that the program would track all Web activity, the offering e-mail did not make it sufficiently clear that the program would follow and retain data on “nearly all of the Internet behavior that occurs on consumers computers,” the FTC complaint said.
Without admitting wrongdoing in the settlement, Sears said it had agreed to destroy the data collected in the research and to make disclosures fuller and more explicit in any future behavioral tracking initiatives.
The FTC did not disclose how many consumers were tracked or how much data was collected. But a Philadelphia Inquirer report quoted an e-mail from Sears vice president Chris Braithwaite as saying that the campaign enrolled fewer than 5,000 people and that the data gathered had in fact already been destroyed.
Interestingly, while the complaint involved consumer data obtained without informed consent, the FTC did not allege that the data was either misused or improperly released. Nor did it suggest the software, provided to Sears Holdings by an unnamed third party, was being used to hijack users’ browsers or commit other classic adware/spyware abuses.
Instead, the FTC seemed to be signaling its will to pursue complaints in which marketers are simply crossing the limits of behavioral tracking without paying proper attention to disclosure.
