Do Companies Need to Change the Way They Use Online Consumer Data?


The FTC recently entered into an agreement with Internet advertising company Chitika, Inc., settling charges that the company deceptively tracked consumers’ online activities. At issue in the FTC’s complaint was that Chitika’s privacy policy gave consumers the ability to opt out of being tracked by the company’s use of online “cookies,” but that – unbeknownst to consumers who chose to exercise this option – the opt-out lasted for only 10 days. After that, the company would resume tracking consumers’ online activity.

The FTC alleged that the short duration of the opt-out period was deceptive and violated federal law, since the company’s privacy policy did not specify an end to the period. (The company claims the 10-day opt-out duration was a technical glitch.)

One possible take-away from the FTC’s action is that, to avoid interest from government regulators, companies with privacy policies should ensure that those policies are not promising more than they can effectively deliver. After all, Chitika’s alleged violation was that it did not live up to its own privacy policy standards.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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