Retail Tracking Firm Settles FTC Charges it Misled Consumers About Opt Out Choices

Nomi Technologies, a company whose technology allows retailers to track consumers’ movements through their stores, has agreed to settle Federal Trade Commission charges that it misled consumers with promises that it would provide an in-store mechanism for consumers to opt out of tracking and that consumers would be informed when locations were using Nomi’s tracking services. The Federal Trade Commission’s complaint against Nomi states that beginning in late 2012, the company’s privacy policy promised that Nomi would provide an opt-out mechanism at stores using its services. This promise implied that consumers would be informed when stores were using Nomi’s tracking technology. The complaint alleges that these promises were not true because no in-store opt-out mechanism was available, and consumers were not informed when the tracking was taking place. The complaint alleges that Nomi collected information on about nine million mobile devices within the first nine months of 2013.

The complaint is the FTC’s first against a retail tracking company. “It’s vital that companies keep their privacy promises to consumers when working with emerging technologies, just as it is in any other context,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “If you tell a consumer that they will have choices about their privacy, you should make sure all of those choices are actually available to them.” Under the terms of the settlement with the FTC, 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.