Web tracker Compete Inc. has settled with the Federal Trade
Commission over charges that it broke the law by tracking online users,
collecting their personal data, and not disclosing how much it was collecting
or honoring its promises to protect the data.
The company, which sold the data to clients trying to boost Web
traffic and sales, has agreed to obtain consumers' express consent before
collecting any data from software downloaded onto their computers.
Compete got consumers to download the software by saying
they would be part of a consumer panel and could win rewards while sharing
their opinions. The software collected usernames, passwords, search terms and
even credit card info, security codes and Social Security numbers, according to
While the company claimed all data was stripped of personal
info and it took reasonable security measures, the FTC said those claims were
false and deceptive because the company "failed to remove personal data
before transmitting it; failed to provide reasonable and appropriate data
security; transmitted sensitive information from secure websites in readable
text; failed to design and implement reasonable safeguards to protect
consumers' data; and failed to use readily available measures to mitigate the
risk to consumers' data."
The company will have to submit to a third-party audit of
its information security practices for the next 20 years.