Consumers’ money isn’t the only thing that needs protecting, at least if you ask the new head of the Bureau of Consumer Protection at the Federal Trade Commission. David Vladeck, former Georgetown law professor and attorney with the Public Citizen Litigation Group, thinks the FTC should protect consumers’ dignity, not just their money, and he may have a good point.
In an article for the ABA Journal, Debra Cassens Weiss discusses the FTC’s complaint against Sears Holding Management Company. In the complaint, the FTC alleges that Sears disseminated software to consumers that ran in the background on the consumers’ computers and transmitted tracked information to Sears. The software, which was purported to “confidentially track [the consumers’] online browsing,” went much further than what the consumers were led to believe (at least according to the FTC).
By downloading the software, the consumers allowed Sears to collect information on the configuration of their computer hardware and software, as well as on internet browsing activity. That’s where the problem arises. The FTC says that Sears did not do a good enough job of disclosing the types of information it would be gathering, and I agree.
Sears was not just tracking which store websites consumers were choosing, or which advertisements they were clicking–it was observing “both . . . normal web browsing and the activity . . . undertake[n] during secure sessions, such as filling a shopping basket, completing an application form or checking . . . online accounts, which may include personal financial or health information.”
To be fair, consumers sign long, complicated contracts all the time, often without reading them (or at least reading them very carefully). Sears could argue that it is not doing anything new here. Courts have long considered how far companies must go in disclosing contractual provisions, and what is expected of consumers in reading and understanding them. There are many cases in which the consumers were expected to honor the contracts they signed. But I think there is a pretty big difference between adequate disclosure regarding something that might happen in the future (e.g., having to arbitrate a disagreement in Florida), which a consumer can (perhaps unhappily) choose to avoid, vs. disclosure regarding gathering private information which the consumer believes is protected.
I can imagine the arguments against the FTC action. If you don’t ever let consumers get burned by the contracts they sign without reading, they’ll never learn to be more careful. But that’s assuming consumers will ever decide that it’s in their interests to read contracts carefully before accepting them. I don’t think that’s likely, and I think to a certain degree that’s ok. Customers expect low prices, and companies continue to look for ways to provide them, and if consumers are willing to give a little on the back end to save some money on the front end then who’s to say we should stop them?
But I think this is different. My first thought upon seeing Weiss’s article was, “Is that even legal?” I consider myself pretty Internet-savvy and, though I probably wouldn’t have accepted Sears’ agreement in the first place, if I did I certainly wouldn’t have thought that Sears could gather private information from my secure browsing. I think most consumers would feel the same way, and I’m glad Vladeck is keeping an eye out for us.