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How To Defend Against a Cookie Monster

Written by Mark Rasch
May 2nd, 2013

Attorney Mark D. Rasch is the former head of the U.S. Justice Department’s computer crime unit and today is a lawyer in Bethesda, Md., specializing in privacy and security law.

A new U.S. Federal Trade Commission (FTC) case illustrates how retail chains can get in serious legal troubles when they use third parties to help mine shopper data. Although the FTC did not, in that case, go after the retailers who either provided the marketing company with access to the data or who purchased the analyzed data, we can expect that, in the future, either the FTC or consumers themselves will go after those chains.

Retailers routinely hire technology companies or marketing companies to help them better know their customers. These outside vendors can help retailers comb through mountains of data to determine the profiles of their customers, their wants and desires.

But if retailers want to avoid liability for unfair and deceptive trade practices, they had better ask not only what these companies can do, but also how they plan to do it. Even buying aggregated data from an untrustworthy source, or allowing a third party to mine your consumer data, can lead to big trouble.

Cookies are a problem for consumers because they have to read the privacy policies of every single website they visit to find out not only whether cookies are sent, but also what kind of cookies they are, what kind of data they collect, and with whom the data is shared.

But consumers are not powerless. They have the ability, within their browser settings, to decide what kind of cookies to accept, and with whom they want to share them.

A consumer may have no problem with sending a cookie back to the originating site (telling Target that they have been there before) but may take issue with sending the same information to Walmart, or worse, to some Chinese hacking site. They can control—at least to some extent—their own privacy settings. Or at least they thought so.


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