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Sears Abandons Customer Spyware Program

Sears’ current tagline “Where Shopping Revolves Around You 24/7” might be better phrased as “Where We Spy On You 24/7.”

Under a Federal Trade Commission (FTC) consent order, Sears Holdings Management Corporation (SHMC), owned by Sears, Roebuck and Company and Kmart Management Corporation, agreed that it failed to adequately disclose that a computer tracking program it installed on customers’ personal computers collected information on just about every activity conducted by customers on the computers and immediately sent the information to SHMC’s servers.

The tracking program was installed when customers agreed to participate in SHMC’s “My SHC Community” market research program. In return for $10, the customers allowed SHMC to install a tracking program. In the User Agreement for the program, beginning at line 75, it was disclosed that the program monitors “both your normal web browsing and the activity that you undertake during secure sessions, such as filling a shopping basket, completing an application form or checking your online accounts, which may include personal financial or health information.”

The FTC said in its complaint against SHMC that the program in fact “transmitted in real time, tracked information to servers maintained on behalf of respondents. The tracked information included not only information about websites consumers visited and links that they clicked, but also the text of secure pages, such as online banking statements, video rental transactions, library borrowing histories, online drug prescription records, and select header fields that could show the sender, recipient, subject, and size of web-based email messages.” In addition, the program tracked and transmitted back to SHMC certain non-Internet related activities taking place on the computers.

The FTC charged that the disclosure did not adequately describe the information the application tracked and made the disclosure in such a way as to “constitute unfair or deceptive acts or practices” in violation of the Federal Trade Commission Act.

SHMC touted the application to consumers as “a place where your voice is heard and your opinion matters, and what you want and need counts!”

As part of the consent order, Sears agreed to cease collecting the information from the program and to destroy the information it collected using the tracking program.

Sears Holdings Management Corp., Federal Trade Commission File No. 082 3099, issued June 4, 2009.

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