Written by Cynthia and Michele
So you thought that if you made "full disclosure" in your online agreements with customers, you'd be OK -- well, it's time to think again.
Requiring online service providers to obtain express consent before employing marketing software is nothing new. For example, in a consent order reached with a company called Zango, the FTC said that express consent is required before employing tracking software with pop-ups --- and tagged Zango for $3 million. In another case, In re DirectRevenue LLC, the FTC required express consent before installing what they called “lureware,” along with a fine of $1.5 million.
What is notable about Sears, however, is the shift in focus from the completeness of disclosure itself to its completeness in light of all other representations. While a EULA disclosure may be complete in itself, it is now clear that even a full and complete disclosure will correct other representations if the overall impression is misleading. In short, service providers will not get a second chance to make a good first impression.
Practical advice -- take another look at your EULA or TOS and make sure that it is not just complete, but it is accurate.