FTC: Sears agrees to settle claims over personal data company collected by tracking Web use

Sears, FTC to settle personal data allegations

HOFFMAN ESTATES, Ill. — The Federal Trade Commission announced a preliminary settlement Thursday with retailer Sears Holdings Corp. over allegations the merchant failed to disclose how much personal information it was collecting from a group of consumers. The finding, which resolves a complaint against Sears Holdings Management Corp., isn’t an admission that the retailer broke any laws.

At issue was software that Sears paid a small number of select Sears.com and Kmart.com consumers $10 to download during what the company said was a research effort aimed at learning about consumers’ online shopping behavior.

In addition to recording all of a participant’s Web use, the FTC said, the software monitored secure online sessions, including those on other Web sites, and collected information about what consumers were buying from other online retailers along with their prescription drug records, online bank statements, library browsing histories, film rental records and some e-mail activity.

If finalized after a 30-day comment period, the settlement would require the parent of Sears and Kmart stores to destroy any information it obtained through the software. Sears must also “clearly and prominently” disclose the scope of any data its software monitors in the future, what it records and transmits and whether any information will be used by a third party.

“Sears Holdings takes the safety and security of our customers’ private information very seriously,” spokesman Christian Brathwaite said in a statement Thursday.

Brathwaite said research effort ended a year ago and no similar studies are planned. The company also said no tracking software currently is being used by any Sears Web sites.

But the FTC said Sears customers who opted to download research software from the suburban Chicago-based company’s Web site may not have been aware how much data the company recorded because of a “lengthy” and “multistep” registration process.

The ailing retailer plans to expand its online presence, offering more than 3 million products for sale online in 2009, up from 500,000 in 2008. Sears also has launched a site where homeowners can solicit bids for service and maintenance projects, and it is experimenting with online ordering that allows customers to pick up goods at nearby stores.

Sears shares rose $3.18, or 4.8 percent, to $68.76 in midday trading Thursday.