Posted: 11 Oct 2009 Last revised: 1 Feb 2014
Date Written: September 16, 2009
In September 2009, the Federal Trade Commission ("FTC") approved a final consent order in the matter of Sears Holdings Management Corp. ("Sears"), regarding the FTC’s charges that Sears violated Section 5 of the FTC Act in connection with a software application it offered as part of its "My SHC Community Program." The software application (the "Tracking Application") allowed Sears to track consumers’ online behavior, as well as some offline activities.
Furthermore, the fact that a prominent "brick and mortar" retailer now employs online behavioral tracking technologies without providing adequate disclosures has intensified concerns in the current behavioral tracking/advertising dialogue (industry self-regulation v. federal legislation) in which Congress and the FTC remain very concerned regarding behavioral advertising/tracking. Yet, industry pundits and others claim that privacy concerns are overrated. Moreover, studies show that previous attempts to educate consumers about risks have been fruitless. However, a 2009 study and recent events indicate that consumers become very concerned about online privacy when they become aware of companies' uses of their personal information. The author affirms Congressional/FTC concerns but urges Congress to postpone legislation that would regulate behavioral advertising and instead favors allowing new self-regulatory initiatives time to work, while encouraging the FTC to bring enforcement actions against those companies which overstep the behavioral advertising boundaries.
Keywords: privacy, consumer protection, administrative law, legislation, advertising, contracts
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