A Web analytics firm has agreed to settle a U.S. Federal Trade Commission complaint accusing it of violating federal law when using its tracking software to collect personal data -- including credit card information and Social Security numbers -- without disclosing how much information it was collecting.
The FTC also charged the Boston-based Compete with failing to honor promises it made to protect the personal data it collected, the agency said in a press release.
A proposed settlement will require Compete to obtain consumers' express consent before collecting data from its software downloaded onto consumer computers. The settlement also will require the company to delete or anonymize the consumer data it has collected and to provide consumers with instructions for uninstalling the software.
Compete, in a statement, said it is committed to consumer privacy. "When we learned in January 2010 that there was a potential security issue, we immediately disabled data collection from affected versions of the software and deleted from our servers information that may have been inadvertently collected," the company said. "We also implemented new data filters and security measures."
The company continues to develop new standards for transparency and security, it added.
Compete uses tracking software to collect data on the browsing behavior of millions of consumers, the FTC said. Compete uses that tracking data to generate reports it sells to website operators who want to improve their traffic and sales.
Compete used several strategies to get consumers to download its tracking software, including asking Web users to join a consumer input panel at Consumerinput.com, the agency said. Compete told consumers they could win rewards while sharing their opinions about products and services. Compete also promoted the Compete Toolbar and told consumers they would have instant access to data about websites they visited, the agency alleged.
After consumers downloaded the software, the tracking service operated in the background, the FTC said. The tracking software captured more information than the company told consumers including usernames, passwords, credit card information and Social Security numbers, the agency alleged.
Compete also licensed its Web-tracking software to other companies, the FTC alleged. Upromise, which licensed the software, settled similar FTC charges earlier this year.
The FTC also alleged that Compete made false and deceptive assurances to consumers that their personal information would be removed from the data it collected.
The company's promises included: "All data is stripped of personally identifiable information before it is transmitted to our servers," and, "We take reasonable security measures to protect against unauthorized access to or unauthorized alteration, disclosure or destruction of personal information."
However, Compete failed to remove personal data before transmitting it and failed to provide reasonable and appropriate data security, the FTC said. The company transmitted sensitive information from secure websites in readable text, the agency said.
Several of Compete's business practices were unfair or deceptive and violated U.S. law, the FTC alleged. The company failed to disclose to consumers that it would collect detailed information such as information they provided in making purchases, not just the Web pages they visited, the agency said.
The proposed settlement bars the company from making misrepresentations about its privacy and data security practices and requires that it implement a comprehensive information security program with independent third-party audits every two years for 20 years.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is [email protected]