Friday, 27 January 2012

FTC settles over use of flash cookies

The US Federal Trade Commission (FTC) has reached a settlement with advertising network ScanScout Inc. over the online advertising network's use of Flash cookies which consumers' web browser settings could not opt out of, contrary to the company's privacy policy.

ScanScout - which was acquired by Tremor Media during the process - used Flash cookies to collect consumer data for the period between April 2007 and September 2009.

Although its privacy policy stated that consumers could block the cookies by changing their browser settings, the FTC found that the Flash cookies were unaffected by users' browser settings since they were not controlled through a computer's browser, unlike HTTP cookies.
Consequently, the FTC found the practice constituted 'deceptive acts or practices in or affecting commerce' and in violation of the Federal Trade Commission Act.

"The failure to properly disclose the use of Flash cookies can result in FTC enforcement", said Dana Rosenfeld, Partner at Kelley Drye & Warren LLP.

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