FTC Approves Final Consent Order Requiring Sears to Disclose the
Installation of Tracking Software Placed on Consumers’ Computers; FTC
Approves Final Consent Order in Matter Concerning Enhanced Vision
Systems, Inc.
http://www.ftc.gov/opa/2009/09/sears.shtm
The convergence of brands and information privacy is just starting to emerge. I
am going to venture this one will play out in the papers and television
in an even more escalated fashion than the disruption and disintermediation of the music industry.
Next week to kick off
Advertising Week, Mediapost / OMMA will publish a larger piece I have
penned on the impact of certain behavioral targeting practices on brands. If you know me it all, I will not be going on
about the virtues of the practice and how self-regulation is the answer.
Brands–if you are paying attention at all. one word TRUST. Without it, you’re borked and will pay the price in
a way that matters: your earnings and revenues. After
I left SonyMusic, they in embarked on a similar program affectionately
know as root kit. This was not only brand damaging, it was costly in
lawsuits, settlements, and ultimately their market share and bottom
line. Literally, “Epic” fail.
Last week the FCC shut down malware practices of two major brands. I will spare you the
incredulous paragraphs and let the FTC press release speak for itself.
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.
Why would Sears would
ever need to breach personal and sensitive information on their
customers in this matter? What possible good could come of this? The
downside is so much larger, forget the lack of any real transparency
(this is akin to the “it’s okay, we put it in our privacy policy.” The
criminal world calls similar behavior ‘premeditated’.
The
stakes of these brands –> consumer quid pro quo over data are far higher then we realize and do
not belong at the bottom of “a lengthy user license agreement,
available to consumers at the end of a multi-step registration process.”
This is only the beginning of the “you’re doing it wrong” (and it cost you your reputation and earnings) phase of information privacy,
advertising and brands.
Stay tuned to this space as I would like to be addressing the obvious answers and tactics for brands to be winning vs. publishing a civil libertarian consumer and brand information service.