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Toysrus.com faces online privacy inquiry

Computerworld

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(IDG) -- Toysrus.com Inc. today confirmed that New Jersey's Division of Consumer Affairs has launched an investigation of the online retailer's data privacy policies, although a Toysrus.com spokeswoman said the company's understanding is that the inquiry is also focusing on other e-commerce ventures.

Officials at the New Jersey consumer affairs agency, which is part of the attorney general's office in that state, couldn't be reached for comment on the matter this morning. But Toysrus.com spokeswoman Jeanne Meyer said the Paramus, N.J.-based e-commerce division of Toys R Us Inc. has already turned over "thousands of records" to the agency.

"They asked us [for the information] several weeks ago, and we are cooperating with them regarding Internet privacy," Meyer said. "We want to help anyone in the consumer protection area enforce privacy policies. Privacy is of utmost importance to us, and we do not sell or rent personal information about our customers."

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Online privacy has become a hot-button topic this year, with advocacy groups pushing Congress to pass privacy-related legislation and industry groups trying to promote self-regulation policies as an alternative step.

Toysrus.com last summer was hit with several class-action lawsuits that charged the company with violating its privacy policy by sending personal information collected from online shoppers to Coremetrics Inc., a San Francisco-based company that provides data analysis services (see "Toys R Us hit with two online privacy lawsuits," link below).

The lawyers who filed the suits alleged that Coremetrics is a third party, making the arrangement between the two companies a violation of Toysrus.com's promise not to share personal data with other businesses. But Coremetrics said the information it receives is only used to prepare reports on Web site usage for individual corporate clients and isn't shared with any other companies.

At the time it hired Coremetrics, Toysrus.com's privacy policy didn't specifically mention the online retailer's relationship with the data analysis firm. However, the policy did state that Toysrus.com may "utilize a service provider to assist us in aggregating guest information."

Meyer said Toysrus.com, which now operates a co-branded online toy store with Amazon.com Inc. (see "Amazon, Toysrus.com teaming up to sell toys online," link below), severed its relationship with Coremetrics in August. According to a statement posted on the Toys R Us corporate Web site, the data-sharing deal with Coremetrics was "a trial arrangement" that was in effect for only "a short period of time."

The statement added, though, that Internet cookies may have been placed on the computers of some Toysrus.com shoppers while the online retailer was using the Coremetrics service. That period lasted from late April into early August, Toys R Us said.




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