FTC cracks down on company that tracks shoppers
A maker of technology that lets retailers follow the movement of people in their stores has agreed to settle charges it misled consumers with phony promises they'd be informed of the tracking and allowed to opt out, the Federal Trade Commission said on Thursday.
Starting in late 2012, Nomi Technologies told consumers it would provide an in-store option of blocking the tracking, when no such mechanism was available, the FTC said.
FTC spokesman Jay Mayfield told CBS MoneyWatch the agency could not disclose what retailers had used the company's technology, but said the fact the company had collected information on about 9 million mobile devices within the first nine months of 2013 says something about its reach.
The complaint, the FTC's first against a retail tracking company, resulted in a settlement by which Nomi will be prohibited from misrepresenting consumers' options for controlling whether data is collected, used, disclosed, or shared about them or their computers and other devices.
"It's vital that companies keep their privacy promises to consumers when working with emerging technologies, just as it is in any other context," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "If you tell a consumer that they will have choices about their privacy, you should make sure all of those choices are actually available to them."
The commission voted 3-2 to issue the complaint and accept the consent order, with Commissioners Maureen Ohlhausen and Joshua Wright dissenting.
"We are pleased to reach this agreement. We continually review our privacy policies to ensure that they follow best practices and had already made the recommended changes in pursuit of that goal by updating our privacy policy over a year and a half ago," Nomi said in a statement.
Wesley Barrow, a spokesman for the company, declined to elaborate further.