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FTC Signals Tougher Standard For Online Tracking Disclosures

By Charles Kennedy

On June 4, the Federal Trade Commission (“FTC”) announced a proposed consent agreement with Sears Holdings Management Corporation (“SHMC”) (see, Federal Trade Commission Press Release, “Sears Settles FTC Charges Regarding Tracking Software” (June 4, 2009), available at www.ftc.gov/opa/2009/06/sears.shtm).

The government makes note that the settlement is not final and does not include any finding of wrongdoing by SHMC, but that the working settlement sends a strong signal that the FTC will subject online tracking of consumer behavior to a stringent standard of disclosure. Company personnel ' and inside and outside counsel ' involved with addressing and fielding issues related to behavioral advertising or other online data-collection activities that are important to an enterprise's success should be aware of the proposed settlement, and should assess the prominence and completeness of the disclosures they make to consumers in light of the SHMC proceeding.

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