Trade groups representing tech companies and app developers say they are opposed to the Federal Trade Commission's proposed consent decree with retail tracking firm Nomi Technologies, which allegedly misrepresented its privacy practices.
But Nomi didn't require its 45 retail clients to disclose whether they used the technology, and most of its clients didn't voluntarily do so, the FTC alleged in a complaint unveiled last month. The result was that consumers who might have chosen to opt out at retail locations weren't able to, according to the agency.
This week, trade groups including NetChoice (which counts Google, AOL, eBay, Facebook and Yahoo as members) and the Application Developers Alliance weighed in against the consent decree, arguing that the FTC's decision to prosecute Nomi could backfire.
But Commissioners Edith Ramirez, Julie Brill and Terrell McSweeny, who voted in favor of the decision, said that even though the FTC encourages companies to offer privacy choices, the agency “must take action in appropriate cases to stop companies from providing false choices.”
“If this occurs then consumer information and consumer choices will diminish,” the developers' group says.
The U.S. Chamber of Commerce writes that the FTC should take a less aggressive approach with startups like Nomi. “Taking into consideration such factors as good faith efforts to comply with the law and allowing small entities to correct mistakes within a reasonable time frame regarding their privacy statements makes good policy sense,” the organization says.
Like other retail tracking companies, Nomi provides data about shoppers' traffic patterns, such as the percentage of people who enter a store after walking by it. Between January and October of 2013 (the time period covered by the FTC's complaint) Nomi gathered tracking data via 12-digit “media access control” (MAC) addresses -- identifiers that mobile devices broadcast when users turn on WiFi or Bluetooth.
Nomi attempted to anonymize the MAC addresses by replacing the actual series of characters with alternate, but persistent, identifiers, according to the FTC.
Last year, Apple moved to prevent tracking via MAC addresses by reconfiguring its software. Now, iOS 8's WiFi scanning uses random, locally administered MAC addresses, instead of the permanent MAC addresses.