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In the Matter of Sears Holding Management Corp.

2009 WL 2979770 (2009)

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In the Matter of Sears Holding Management Corp.

Federal Trade Commission

2009 WL 2979770 (2009)

Facts

The Federal Trade Commission (FTC) (plaintiff) instituted an administrative complaint against Sears Holding Management Corporation (Sears) (defendant) regarding a computer application Sears used. The FTC alleged the following. Sears invited select users of Sears.com to participate in an online program called My SHC Community. A pop-up box on the Sears website solicited participation and invited users to enter their email addresses to learn more. The box did not mention the application. The pop-up box contained a hyperlink labeled Privacy Policy, but this policy also did not mention the application. Upon clicking the pop-up box, consumers received an email stating that as part of the program they would download and install an application on their computers. The email stated that the application would “confidentially track [users’] online browsing.” The email also stated that the application would “collect information on [users’] internet usage.” Consumers who agreed to this would click a button that took them to a registration page. The registration page contained a Privacy Statement and User License Agreement (PSULA). The PSULA appeared in a scroll box showing 10 lines at a time. On approximately the seventy-fifth line, the PSULA gave additional information on the information that the application would track, including but not limited to (1) the user’s internet-browsing activity, including that undertaken in secure sessions, (2) the text on secure webpages, including bank accounts, (3) drug-prescription records, (4) email subject headers, and (5) certain non-internet-related activities. The FTC alleged that Sears failed to adequately disclose the true extent of the application’s monitoring and use of users’ personal information. The FTC alleged that the inadequacy of disclosure violated § 5 of the Federal Trade Commission Act.

Rule of Law

Issue

Holding and Reasoning

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