FTC settles charges with Web analytics company Compete

According to the proposed settlement, the FTC said Compete has agreed to get consumers' consent before using its software to collect data from them and will also take steps to delete or remove personal information from the data it has already procured.

The settlement also bars Compete from making false statements about its privacy and security practices, and the company must implement an information security program that will be audited by a third party every two years for the next 20 years.

In a statement, Compete said it is committed to protecting consumers' privacy and had rectified a previous security issue found in its software.

"When we learned in January 2010 that there was a potential security issue, we immediately disabled data collection from affected versions of the software and deleted from our servers information that may have been inadvertently collected," the company said in a statement. "We also implemented new data filters and security measures. We will continue to develop and uphold new standards for transparency and security."

Compete is largely known for providing data about the number of visitors a website receives. The FTC said the company had incentivized consumers to download its Web-tracking software via the website consumerinput.com by offering cash rewards and gift cards, among other methods.

The software collects data about the websites they visit and their activity online. The company then uses that data to compile reports for clients on how much traffic a website or search term gets, and provides other type of metrics.

Once people downloaded Compete's Web-tracking software onto their computers, the FTC said it would track their activity online and "captured information consumers entered into websites, including consumers' usernames, passwords and search terms," as well as some more sensitive information like credit card and financial account information, Social Security numbers and security codes.

The FTC alleged that Compete told people that its software would collect information about the webpages they visited, yet failed to disclose it would also collect other types of data, such as "information they provided in making purchases."

Four of the five FTC commissioners voted to accept the agreement, while Republican Commissioner J. Thomas Rosch abstained from the vote.