Online Advertiser Settles FTC Charges ScanScout Deceptively Used Flash Cookies to Track Consumers Online
The Federal Trade Commission announced a settlement concerning online privacy and tracking of consumers’ Web use:
Online advertiser ScanScout has agreed to settle Federal Trade Commission charges that it deceptively claimed that consumers could opt out of receiving targeted ads by changing their computerâ€™s web browser settings to block cookies. In fact, ScanScout used Flash cookies, which browser settings could not block. The proposed settlement bars misrepresentations about the companyâ€™s data-collection practices and consumersâ€™ ability to control collection of their data. It also requires that ScanScout take steps to improve disclosure of their data collection practices and to provide a user-friendly mechanism that allows consumers to opt out of being tracked. […]
ScanScout is an advertising network that places video ads on websites for advertisers. ScanScout engages in behavioral advertising â€“ it collects information about consumersâ€™ online activities and then serves video ads targeted to their interests.
The proposed settlement will bar ScanScout from misrepresenting the extent to which consumersâ€™ data is collected, used, shared, or disclosed. Within 30 days after the settlement order becomes effective, ScanScout must place a prominent notice on its home page stating,â€œWe collect information about your activities on certain websites to send you targeted ads. To opt out of our targeted advertisements, click here.â€ The hyperlink must take consumers to a mechanism that allows them to prevent the company from collecting information that can identify them or their computer; redirecting their browser to third parties that collect data without their approval; and associating any previously collected data with them. The consumerâ€™s choice must last for at least five years, unless the consumer changes it.
The proposed order also requires that, within close proximity to the consumer opt-out mechanism, the company must disclose that it collects consumer data to send targeted ads; that opting out will halt the collection; the current status of the consumerâ€™s choice â€“ for example, whether he or she had opted in or opted out; and circumstances â€“ such as changing the browser a consumer uses â€“ that could automatically change their choice. […]
During the FTCâ€™s investigation, ScanScout merged with Tremor Video, Inc. Tremor also subject to the settlement order.