FTC Tracking Company Settlement Highlights Importance of Keeping Privacy Promises

It has long been the Federal Trade Commission’s (FTC) position that if you make a privacy promise to consumers you should expect to be held to that promise.  The FTC’s complaint and its proposed settlement, announced on April 23, 2015, with Nomi Technologies, Inc. (Nomi) highlights this.

Nomi’s tracking applications allow retailers to capture the unique media access control address (and other information) of mobile devices of persons who enter a retailer’s physical store as well as persons within a certain distance from the stores. Nomi then made this information available to its retailer customers for analytics purposes. Nomi promised that it would provide an opt-out mechanism for consumers and that consumers would be informed when they were being tracked. Nomi’s privacy policy stated, in part, that Nomi pledged to “always allow consumers to opt out of Nomi’s service on its website, as well as at any retailer using Nomi’s technology.” However, Nomi did not have a mechanism that allowed an opt-out at the retailer locations nor were consumers informed that they were being tracked.

The proposed settlement consent order, which is still subject to public comment, prohibits Nomi from further misrepresentations of its privacy practices.

For more information on this topic, contact your Cybersecurity and Data Privacy counsel at Smith, Gambrell and Russell.

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