Michigan A.G. Goes After Web Cookies

WASHINGTON (06/14/2000) - Michigan Attorney General Jennifer Granholm has threatened legal action against four World Wide Web publishers, alleging that each site fails to warn customers that they are being tracked by a third party.

Granholm said these sites fail to tell customers that a third-party company is placing "cookies," or small programs that automatically upload on the individual's computer that track the visitor's surfing.

"I think it is clear that these invisible tracking devices are following where people are going online, and the consumer is not warned," said Tracy Sonneborn, assistant attorney general in the Consumer Protection Division.

The Notices of Intended Action were issued June 12, alleging a violation of the Consumer Protection Act, against Ortho Biotech Inc.'s Procrit.com, a medical site which provides information including for AIDS patients; Babygear.com, targeting young parents and babies; Stockpoint Inc., a financial site; and Internet Friends Network, an adult site.

The Attorney General targeted the sites specifically for their sensitive subject matter and to reach consumers. "We gathered the sites that represented different content specifically aimed at different audiences for the purpose of raising consumer awareness," Sonneborn said.

In each case, the companies do not provide an adequate privacy policy stating that the consumer is being tracked by a third party company or do not provide a policy at all, the state said.

Companies such as Amazon.com Inc., which use cookies to track users' favorite books, for example, are not in violation of the law, Sonneborn said, because consumer's willingly go to the site and know they are tracked, he said.

The sites have 10 days to contact the Attorney General's office and work out "middle ground," Sonneborn said. That would most likely include a better privacy statement and possible other disclosures. If the companies do not respond, then a civil lawsuit will be filed, and the companies could be forced to stop using cookies without proper disclosure and fined up to US$25,000.

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