October 23, 2012
Web Analytics Firm Settles With FTC Over Deceptive Data Collection Practices
redOrbit Staff & Wire Reports - Your Universe Online
The Federal Trade Commission (FTC) announced on Monday that it has agreed to settle with Web analytics firm Compete Inc. over charges that the company engaged in “unfair or deceptive” personal data collection practices.
The agreement settles a complaint the FTC filed against Compete accusing the company of collecting detailed personal information of users without their consent.
Compete uses tracking software to collect data on the browsing behavior of millions of consumers, then uses the data to generate reports, which it sells to clients who want to boost their website traffic and sales.
In its complaint, the FTC said Compete had used ads and promotions to encourage people to install its ℠Compete Toolbar´ product, which it told users would collect anonymized data about the websites they visit.
The company touted the product as a way for users to get "instant access" to information about the websites they visited.
But the tracking software actually collected much more detailed personal information than the company disclosed to users, including passwords, credit card numbers and social security numbers entered into the websites users visited, the FTC lawyers wrote in their civil complaint.
The FTC claims that Compete did not inform consumers that it would collect that kind of information, and falsely promised that any information collected would be stripped of consumers' identities. Furthermore, the company failed to provide reasonable security on the data it collected.
"It collected extensive information about consumers' online activities and transmitted the information in clear readable text to Compete's servers,” the FTC said.
“The data collected included information about all websites visited, all links followed, and the advertisements displayed with the consumer was on a given webpage.”
The second product involved in the complaint was a software package dubbed “Consumer Input Panel,” which Compete described as a way for users to win rewards while giving their opinions about products and services.
The terms of the proposed settlement require Compete to obtain user consent before collecting any data, and to delete or anonymize the data it has already collected. The company must also show users how to uninstall its software from their computers, and must enact an information security program with independent audits every two years for 20 years, the FTC said.
The commission voted 4-0, with one commissioner abstaining, to accept the proposed settlement, which will be subject to public comment through Nov. 19, when the commission will decide whether to make the agreement final.