Sears’ Online Snooping Nets Fed Smackdown

Written by Fred J. Aun
June 7th, 2009

Under a proposed settlement with the U.S. Federal Trade Commission, Sears has agreed to destroy incredibly detailed and personal information it collected about the activities of people who signed-up to become members of an online “community” between April 2007 and January 2008.

The FTC has accused Sears Holdings Management Corp. of failing to adequately explain to participants in the “My SHC Community” the extent of its data-collection spyware program. (See the full text of the FTC complaint.) The information was gathered by an application voluntarily downloaded onto participants’ computers. Operating in the background, the program delved deep into the lives of participants, tracking their every online move and more, said the commission.

The FTC said the highly intrusive application would “monitor consumers’ online secure sessions–including sessions on third parties’ Web sites–and collect information transmitted in those sessions, such as the contents of shopping carts, online bank statements, drug prescription records, video rental records, library borrowing histories, and the sender, recipient, subject, and size for web-based E-mails. The software would also track some computer activities that were not related to the Internet.”

In addition to ordering the destruction of all information collected by the effort, the settlement directs Sears, should it decide to advertise or disseminate any tracking software in the future, to “clearly and prominently disclose the types of data the software will monitor, record, or transmit.” (See the full text of the FTC settlement.) Sears also must make those disclosures “prior to installation and separate from any user license agreement” and must also disclose “whether any of the data will be used by a third party,” the FTC said.

Sears spokesman Tom Aiello provided reporters with this comment: “Sears Holdings takes the safety and security of our customers’ private information very seriously. The company conducted a research project nearly two years ago with a small panel of consumers who were recruited online to better understand the surfing behavior of U.S. retail customers. The panelists were informed upfront of the nature of the work being conducted and were paid for their participation in the study. At all times, Sears Holdings ensured the privacy and security of the personal information of all participants who enrolled in the program. We also worked to ensure best practices of its disclosures and notifications to panelists.”


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