Parents' Monitoring Software Maker That Sold Kids' Data Settles With FTC

a kid and a dad look at a computer -- sold kids dataA maker of child-monitoring software has agreed to stop selling information it gathers about the online behavior of kids.

EchoMetrix Inc. of New York agreed to settle with the Federal Trade Commission, which said the company failed to clearly disclose to parents using its web monitoring software that information collected about their children would be sold to third-party marketers.EchoMetrix's Sentry software allows parents to monitor their children's online behavior. Once installed, the software enables parents to log in to a Sentry account and view activity taking place on their child's computer, including chat conversations, instant messaging and Web surfing history.

According to the FTC, EchoMetrix also sold Pulse, a web-based market research software program it promoted for its ability to let marketers see "unbiased, unfiltered, anonymous" content from social media websites, blogs, forums, chats and message boards. One source of content available to Pulse users, the FTC said, were portions of the online activity of children recorded by Sentry software.

The FTC charged that EchoMetrix violated federal law by failing to adequately disclose to parents that it would sell information gathered from their children via its Sentry software to third-party marketers through Pulse. A disclosure made to parents about the practice was found in a statement approximately 30 paragraphs into a multi-page end user license agreement.

"Companies need to make clear disclosures about how they are going to use and share personal information they collect online -- even more so when that information relates to children," said David Vladeck, Director of the FTC's Bureau of Consumer Protection, in a statement.

"In this case -- because selling children's information to marketers is completely contrary to the purpose of the parental monitoring software used to collect it -- EchoMetrix agreed to an order that simply prohibits the company from using or sharing Sentry information for other purposes," Vladeck added

EchoMetrix has agreed not to use or sell the information it obtains through its Sentry program -- or any similar program -- for any purpose other than allowing a registered user to access his or her account. The settlement also requires the company to destroy all information it had transferred from the Sentry program to its Pulse database of marketing information.

The settlement also includes reporting and record-keeping provisions to allow the FTC to monitor EchoMetrix's compliance.

Pulse also landed EchoMetrix in hot water with New York State Attorney General Andrew Cuomo. As Consumer Ally reported, under a settlement with New York State, EchoMetrix agreed to pay a $100,000 fine.

Complaints filed by the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD) helped bring the issue to the FTC's attention.

EchoMetrix says it has since discontinued its Pulse product.
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