Today the FTC announced that Compete, a popular web analytics company, has agreed to a settlement over business practices that the governmental commission alleged ran afoul of good taste, and much more. Putting it succinctly, the FTC alleged that Compete’s business practices were in certain cases “unfair or deceptive and violated the law.”

Following the settlement, Compete will have to “obtain consumers’ express consent before collecting any data from Compete software downloaded onto consumers’ computers.” If that sounds like a bit of a no-brainer, what Compete was supposedly up to will make your socks curl.

The company sent people to a “Consumer Input Panel” that it set up, enticing them with promised “rewards.” However, once the consumer – often brought to the website via paid advertising – downloaded Compete’s software, things went right off the rails.

Try this on for size:

Once installed, the Compete tracking component operated in the background, automatically collecting information about consumers’ online activity.  It captured information consumers entered into websites, including consumers’ usernames, passwords, and search terms, and also some sensitive information such as credit card and financial account information, security codes and expiration dates, and Social Security Numbers, according to the FTC.

As you might expect, you aren’t exactly allowed to do that.

Even more, Compete made promises regarding data anonymity that it simply did not keep. Compete: We’ll strip your data of “personally identifiable information” before it lands on our servers. FTC: They didn’t. Compete: We’ll take care of your data, and keep it safe! FTC: They didn’t. Oh, well then.

In fact, according to the FTC, not only did Compete fail to ”provide reasonable and appropriate data security,” the company “transmitted sensitive information from secure websites in readable text.” You almost want to laugh. Adding to all of this is the fact that Compete licensed its technology, so others were up the same tricks.

The final tally is that Compete is now banned from lying – “ settlement bars misrepresentations about the company’s privacy and data security practices” – and will be audited every two years for the next twenty years by a third-party. The final vote at the FTC was four to zero, with a single vote in abstention.

For shame, Compete.

Top Image Credit: Cliff