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8 Nw. J. Tech. & Intell. Prop. 1 (2009-2010)
Nobody Reads Your Privacy Policy or Online Contract: Lessons Learned and Questions Raised by the FTC's Action against Sears

handle is hein.journals/nwteintp8 and id is 3 raw text is: Copyright 2009 by Northwestern University School of Law                  Volume 8, Number 1 (Fall 2009)
Northwestern Journal of Technology and Intellectual Property
Nobody Reads Your Privacy Policy or Online
Contract? Lessons Learned and Questions Raised
by the FTC's Action Against Sears
Susan E. Gindin*
In September 2009, the Federal Trade Commission (FTC) issued a final consent
order in the matter of Sears Holdings Management Corp. (Sears) regarding the FTC's
charges that Sears violated Section 5 of the FTC Act' in connection with a software
application it offered as part of its My SHC Community Program.2          The software
application (the Tracking Application) allowed Sears to track consumers' online
behavior, as well as some offline activities. When installed, the Tracking Application ran
in the background on consumers' computers and transmitted tracked information to
servers maintained on behalf of Sears. Information collected and transmitted included all
of the consumers' web browsing (not just on Sears' sites), online purchases, business
transacted during secure sessions, completion of online application forms, online
checking accounts, and some of the consumers' web-based email and instant messages.
In most respects, Sears did what nearly fifteen years of legal decisions, with only
a few exceptions, have indicated make an enforceable online contract and privacy policy,
namely, that the consumer is given a reasonable opportunity to review the terms of the
agreement and that the user indicates assent to the agreement.3 For example, Sears
included a Privacy Statement and User License Agreement (PSULA) that described the
Tracking Application in detail,' and before a consumer could install the Tracking
Application, the consumer was required to check a box stating:
* Practitioner, Denver, Colorado, B.A., UCLA; M.S., Drexel University College of Information Science;
J.D., State University of New York at Buffalo. I appreciate the helpful comments of Eric Goldman,
Katherine Strandburg, Lee Tien, and Rebecca Tushnet. 0 2009 by Susan E. Gindin
1 15 U.S.C. §§ 41 et seq. (2006).
2 Sears Holdings Mgmt. Corp., File No. 082 3099 (Fed. Trade Comm'n June 4, 2009),
http://www.ftc.gov/os/caselist/0823099/index.shtm. The final consent order was issued on September 9,
2009. On June 4, 2009, the FTC announced that Sears agreed to enter into a settlement. Press Release, Fed.
Trade Comm'n, Sears Settles FTC Charges Regarding Tracking Software (June 4, 2009),
http://www.ftc.gov/opa/2009/06/sears.shtm. The FTC also announced the agreement in the Federal
Register and opened the matter to public comment. The four comments that the FTC received are available
on the FTC website at http://www.ftc.gov/os/publicomments.shtm.
3 See infra Part III, for a review of court decisions regarding digital contracts.
4 The description of the functions of the Tracking Application in the PSULA read:
Computer hardware, software, and other configuration information: Our application may
collect certain basic hardware, software, computer configuration and application usage
information about the computer on which you install our application, including such data
as the speed of the computer processor, its memory capacities and Internet connection
speed. In addition, our application may report on devices connected to your computer,
such as the type of printer or router you may be using.


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