The Federal Trade Commission Feb. 28 granted Sears Holding Management Corp.’s petition to update the definition of tracking applications in a 2009 settlement order so it can better compete in the mobile application industry.
The FTC decision to allow Sears to track more user data highlights how consumer privacy expectations grow with changing technology. As cited in the modifying order, changed market conditions and public interest in mobile and online tracking apps led to the approval of the definition update.
In the 2009 settlement with the FTC, Sears was restricted from using mobile tracking apps without express consumer consent and clear notice of the types of information it collects. Although Sears must still follow the settlement, the tracking apps definition will now allow the retail giant to conduct tracking in ways consumers now expect—such as gathering technical information to improve app performance and storing items in online shopping carts—without added notice and consent.
“In the context of mobile applications that engage in the types of information collection that consumers expect, the Commission believes that the notice and consent requirements” laid out in the 2009 settlement “are burdensome and counterproductive, both for consumers and Sears,” according to the order.
The settlement stemmed from FTC claims that Sears failed to disclose to consumers that it’s tracking software not only tracked consumer online browsing but also “tracked nearly all internet activity on consumers computers; monitored their activity in online secure sessions with other websites; and collected sensitive personal information,” according to the modifying order.
The move was open to public comment before it was finalized. The agency received generally negative feedback from privacy advocates, including the Consumer Federation of America and the Center for Digital Democracy, which said in a joint letter that the new exemptions were “ambiguous and potentially over-broad.”
The FTC recognized “that the mobile ecosystem has changed dramatically since 2009,” Howard Riefs, Sears’ director of corporate communications, told Bloomberg Law. The update to the settlement “will help allow the many mobile apps provided by Sears to compete on an equal footing with others in the marketplace,” he said.
(Updates with comments from Sears )
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