FTC Focuses On Data Collection And Consumer Privacy: Settles Charges With Data Analytics Company And Announces Workshop On Consumer Data Collection

The Federal Trade Commission made two recent announcements in support of its ongoing initiative to protect consumer privacy, settling an enforcement action against a data analytics company that allegedly failed to disclose adequately its consumer data collection practices and announcing that it will conduct a workshop on consumer data collection practices on December 6, 2012, in Washington, D.C.

Company Resolves FTC Claims Regarding Its Data Collection Practices

The FTC announced last week that analytics company Compete Inc. has settled charges that it violated federal law by using its web-tracking software to collect personal data without disclosing to consumers the extent of the information that it was collecting and that the company failed to honor promises it made to protect the personal data it collected. The proposed settlement requires that the company obtain express consent before collecting any data through software downloaded onto consumers' computers, that the company delete or anonymize the use of any data it already has collected, and that it provide directions to consumers for uninstalling its software. This is the latest in a string of enforcement actions alleging unfair and deceptive trade practices related to data collection and reflects the agency's continued focus on consumer online privacy.

Compete allegedly used tracking software to collect data on the browsing habits of consumers and sold reports on the data to clients to help improve website traffic and sales. The FTC's complaint alleged that the company convinced consumers to download its tracking software using deceptive methods, including by urging them to join a "Consumer Input Panel" and promising rewards for sharing their opinions about products and services. The company also allegedly promised that consumers who installed its Compete Toolbar, another type of software, would have "instant access" to data about the websites they visited. Once installed, the tracking component of the software allegedly operated in the background, automatically collecting information about consumers' online activity, including usernames, passwords, search terms, and sensitive information such as credit card and financial account information, security codes and expiration dates, and Social Security numbers.

The FTC charged that Compete's business practices were unfair or deceptive in 1) failing to disclose that Compete would collect detailed information consumers provided in making...