A proposed settlement between the Federal Trade Commission (FTC) and Sears Holdings Corp. could establish new standards for companies that collect consumer information online and prove a bellwether for future enforcement of consumer protection laws. The FTC contends that Sears improperly collected consumer data through user-downloaded tracking software. The FTC further alleged that the terms of use of the software did not adequately disclose the nature of the data being collected. The proposed settlement terms include Sears destroying all collected data. As with past consent orders involving consumer privacy and data security, the FTC's action likely signals a shift in how it will monitor and regulate companies engaged in online transactions involving the collection of customer information in the future. In addition, the FTC's action may encourage plaintiffs' lawyers to pursue class action lawsuits against businesses that collect consumer information.

Presenters discussed:

  • How will the FTC's approach affect the web collection (including cookies and so-called spyware) of consumer information going forward?
  • What can companies do to ensure compliance with consumer protection laws and the FTC's expectations?
  • Should companies that collect information online be concerned that they could be a target for the FTC or private litigation?

John Nadolenco
Archis A. Parasharami
Jeffrey P. Taft

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