FTC Signals Tougher Standard for Online Tracking Disclosures

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On June 4, 2009, the Federal Trade Commission (“FTC” or “Commission”) announced a proposed consent agreement with Sears Holdings Management Corporation (“SHMC”).[1] The settlement is not final and does not include any finding of wrongdoing by SHMC, but it sends a strong signal that the FTC will subject online tracking of consumer behavior to a stringent standard of disclosure. Firms that offer or rely upon behavioral advertising or other online data collection activities should be aware of the proposed settlement, and should assess the prominence and completeness of the disclosures they make to consumers in light of the SHMC proceeding.

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