While the FTC has focused a great deal of attention on consumer privacy in the digital space, and targeted online marketing is nothing new, the FTC's case against Nomi involves a less familiar form of consumer tracking. Nomi's service allows retailers to follow consumers' movements around their stores by tracking signals on consumers' smartphones. The technology picks up media access control (MAC) addresses that are broadcast by the WiFi interface on shoppers' phones, so as shoppers move throughout a store, the Nomi sensors detect signals from shoppers' phones. While Nomi's technology does not capture personal identification information, by detecting and aggregating consumers' MAC addresses as they move around a store, Nomi is able to provide information to the retailer about a consumer's shopping patterns-including how long a visitor stayed in the store and whether that person has ever visited another location, if the retailer has more locations. In addition, the complaint noted that Nomi also tracked people who passed by stores that were using the technology, even if they never entered it, giving stores information about how many people passed by the store rather than entering.
Under the terms of the proposed consent order, Nomi will be prohibited from misrepresenting consumers' options for controlling whether information is collected, used, disclosed, or shared about them or their computers or other devices, as well as the extent to which consumers will be notified about information practices.
Commissioners Ramirez, Brill and McSweeny, in their statement approving the enforcement action, focused on the "express" promise to provide an in-store opt-out mechanism, as well as the implied promise that customers would be notified whether a particular store was using tracking technology. The majority rejected the argument put forth by the dissenters that the deception was immaterial. In the majority's view, a presumption of materiality could not be overcome given the absence of sound evidence about how many customers would have opted out had they actually been able to avail themselves of an in-store opt-out mechanism.
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