FTC Approves Sears Holdings Management Corporation Petition to Reopen and Modify Commission Order Concerning Tracking Software

Following a public comment period, the Federal Trade Commission has approved a petition by Sears Holding Management requesting that the FTC reopen and modify a 2009 FTC order settling charges that Sears failed to disclose adequately the scope of consumers’ personal information it collected via a downloadable software app.

According to the administrative complaint leading to the 2009 order, Sears offered $10 to consumers to install a market research software application on their personal computers. The complaint alleges that Sears deceptively failed to disclose the full extent of the software’s data collection. The settlement order, among other things, requires Sears to provide clear and prominent notice to consumers of the full collection practices of any “Tracking Application,” as defined in the order, and obtain consumers’ express consent to that data collection before they download or install the software.

In its petition Sears requested that, as a result of changing circumstances and in the public interest, the FTC reopen and modify the order to update its definition of “Tracking Application,” which the company said unnecessarily restricts its ability to compete in the mobile app marketplace. A modification would enable the company to “keep step with current market practices” related to retail online tracking applications, Sears stated.

The Commission has determined that changed conditions of fact require that the order be reopened, and has modified the Order as proposed by Sears. While mobile applications are still covered under the modified Order, the Commission added exceptions to the definition of “Tracking Application” that exclude software that tracks only the configuration of the software program or application itself; information regarding whether the software program or application is functioning as represented; or information regarding consumers’ use of the program or application itself.

The Commission vote approving Sears’s petition, and responses to members of the public who submitted comments, was 2-0. (The staff contact is Jarad Brown, Bureau of Consumer Protection, 202-326-2927)

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