Sears settles with FTC over Web-tracking software

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The Federal Trade Commission is reporting a settlement with Sears Holdings Management Corp. over charges the retailer failed to adequately disclose the scope of consumers' personal information it collected via a downloadable software application.
According to the FTC's complaint, Sears invited certain consumers visiting the Sears.com and Kmart.com Web sites to become members of the “My SHC Community” and paid them $10 to participate in on-going interactions with the retailer. In order to do so, consumers were asked to download software the retailer said would track their online browsing. According to the complaint, it was only in a lengthy user license agreement that Sears disclosed the full extent of the information the software tracked, which included consumers' secure online sessions. These included sessions with third-party Web sites such as other retailers, banks, pharmacies, video rental services, libraries as well as e-mail sender, recipient and subject information.
In a statement from Sears, the company said it conducted a research project nearly two years ago with a small panel of consumers to better understand the surfing behavior of US retail customers.
“The panelists were informed upfront of the nature of the work being conducted and were paid for their participation in the study. At all times, Sears Holdings ensured the privacy and security of the personal information of all participants who enrolled in the program,” according to the statement.
The company also said that no tracking software is currently being deployed on any of Sears' sites or communities and no further similar studies are planned.
The proposed settlement calls for Sears to stop collecting data from the consumers who downloaded the software in question and to destroy any data previously collected. In addition, 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. This disclosure must be made prior to installation and separate from any user license agreement. Sears must also disclose whether any of the data will be used by a third party.
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