FTC finds Amazon practices 'deceptive' but won't act

Wednesday, May 30th 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ Bookseller Amazon and its Alexa Internet subsidiary probably deceived consumers when their Internet software secretly passed on personal information to the company, the Federal Trade Commission said.

But the FTC said it will not take any action against the online bookseller because one of the software programs in question _ the comparison shopping service zBubbles _ is no longer operational and Alexa has changed its stated privacy policy.

``Our review indicated that certain of Amazon.com's and Alexa Internet's practices likely were deceptive in violation of Section 5 of the FTC Act,'' FTC advertising practices official C. Lee Peeler wrote to Amazon's lawyers. ``Nevertheless, we have decided not to recommend enforcement action at this time.''

The letter was released on the FTC Web site this week. Amazon referred questions to Alexa founder Brewster Kahle. Kahle did not immediately return a call for comment Wednesday.

Alexa's and zBubbles' privacy statements had claimed that the tracking information was anonymous, and could not be correlated with an individual person. Now Alexa's policy states that personal information sometimes is collected, but that the company doesn't try to identify the user.

The letter also cited the settlement of a related class-action suit against Amazon that calls for the deletion of previously collected personal information collected by the company.

Privacy advocate Richard Smith, now with the University of Denver's Privacy Foundation, discovered the practice in late 1999. Alexa and zBubbles sent Smith's Web browsing habits, address, phone number, e-mail address and other information back to Amazon.

Smith said he was disappointed with the decision, and that Amazon should have acted differently.

``I think they needed to come down harder in this case,'' Smith said. ``I found (Amazon's response) kind of strange. They should have just changed their software to work how the privacy policy said it worked.''

In response to the FTC decision, privacy advocate Jason Catlett sent a letter Wednesday to incoming FTC chairman Timothy Muris asking him to take action against Amazon and Alexa.