ScanScout Settles With FTC About Flash Cookies Used For Tracking Consumers

ScanScout has agreed to settle with the U.S. Federal Trade Commission (FTC) about charges the company used deceptive marketing with a website privacy policy that claimed consumers could opt-out of online tracking, when they couldn't opt-out because the company's website used the Flash cookie technology to collect data which browser settings couldn't block. An FTC press release summarized the terms of the proposed settlement:

"... bars misrepresentations about the company’s data-collection practices and consumers’ 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."

During the lawsuit and before the settlement agreement, ScanScout merged with Tremor Video. The consent order (PDF), which applies to the merged company and its subsidiaries, stated:

"... officers, agents, representatives, and employees and all other persons in active concert or participation with any of them, who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any entity, in connection with the online advertising, marketing, promotion, offering for sale, sale, or dissemination of any product or service, in or affecting commerce, shall not misrepresent in any manner, expressly or by implication: (A) the extent to which data from or about a particular user or the user’s online activities is collected, used, disclosed, or shared; or (B) the extent to which users may exercise control over the collection, use, disclosure, or sharing of data collected from or about them, their computers or devices, or their online activities."

The consent order also stated that within 30 days of the approved consent order, the company:

"... place a clear and prominent notice, including a hyperlink, on the homepage(s) of its website(s), which states, “We collect information about your activities on certain websites to send you targeted ads. To opt out of our targeted advertisements click here.” When selected, the hyperlink shall take consumers directly to the mechanism... that enables users to prevent respondent: from collecting data that can be associated with a particular user, or that contains any unique identifier, including user ID or Internet Protocol (IP) address; from redirecting users’ browsers to third parties that collect data, absent a click or other affirmative action by such user; and from associating any previously collected data with the user..."

For five years after the approved consent order, the companies must save and forward to the FTC both complaints from consumers and all company documentation proving compliance with the consent order.

During the summer of 2011, a class-action lawsuit was filed against AOL, Brightcove, and ScanScout about the use of the Flash cookies technology to secretly track consumers' online usage.

The proposed settlement agreement is open for comment by the public until December 8, 2011, after which the FTC will decide whether to make it final. To submit comments, follow the online comment instructions at this website. Comments submitted via postal mail should be sent to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

To learn more about the various tracking technologies, browse posts in this blog about browser cookies, "zombie cookies," Flash cookies, "super cookies," and etags. The FTC OnGuard Online website also contains a section about the various online cookies technologies.