In re Sears Holdings Management Corp.

2009 WL 2979770 (2009)

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In re Sears Holdings Management Corp.

Federal Trade Commission
2009 WL 2979770 (2009)

Facts

Sears Holdings Management Corp. (SHMC) (defendant) operated the retail websites for Sears and Kmart. SHMC began inviting website users to participate in an online program called My SHC Community. Participation ultimately involved the download of a data-tracking application. A pop-up box on the stores’ websites invited users to enter their email addresses to learn more about My SHC. Neither the pop-up nor the hyperlinked privacy policy mentioned the application. Upon clicking the pop-up box, consumers received an email stating that the program involved the installation of an application that would “confidentially track [users’] online browsing” and “collect information on [users’] internet usage.” Consumers who agreed would click a link in the email that took them to a registration page. The registration page contained a Privacy Statement and User License Agreement (PSULA) that appeared in a scroll box showing 10 lines at a time. Around the seventy-fifth line, the PSULA referenced the application and described the information it would track, including (1) computer-configuration settings; (2) internet-browsing activity, even on secure sites; and (3) the pace and style of inputted information. Users were required to click a checkbox on the registration page indicating assent to the PSULA’s terms. Users were then directed to install the application. Once installed, the application ran continually, transmitting data to SHMC. There was no visible indication to users that the application was running. The application transmitted data that included not only what websites users visited, but also the text on secure pages, including online bank statements, drug-prescription records, and more. The Federal Trade Commission (FTC) (plaintiff) filed a complaint against SHMC, alleging that SHMC failed to adequately disclose the full extent of its application’s monitoring and that such disclosure was material to users’ decisions on whether to install the software. The FTC believed SHMC’s conduct violated the FTC Act.

Rule of Law

Issue

Holding and Reasoning ()

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