The Michigan Attorney General, Jennifer Granholm, issued a Notice of Intended Action under the Michigan Consumer Protection Act to Pennsylvania-based eGames in September 2000, alleging that eGames had not adequately warned consumers that its games software also included a spyware program which enabled a third-party advertiser to secretly interact with eGames' customers' computers.
The spyware program specifically enabled an advertising company called Conducent to make use of consumers' Internet connections to interact with consumers' computers. Granholm also alleged that eGames permitted third parties to monitor consumers' browsing behavior at eGames' web site without disclosing this fact to consumers.
Granholm said:
“eGames has committed itself to not only obtaining consumers' consent before collecting their personal information and informing consumers how it handles their information but has also agreed to go one step further and revise its software to address its customers' concerns. eGames is setting a new standard in respecting and observing consumers' privacy interests - one that other companies operating on the internet should emulate."
Under the agreement, eGames will remove the undisclosed third-party advertising software from all future versions of its computer games. Conducent advertising software contained in demo games that are downloaded from eGames' web site will be removed within two weeks, while full versions of eGames' software packages will be free of the advertising software by 31st March this year.
To address the concerns of consumers who have already downloaded games or purchased eGames products, eGames has developed a free software patch to remove the Conducent software from consumers' computers.
eGames has also prepared and posted a new, expanded privacy policy on its web site designed to disclose all material facts regarding the collection and use of consumers' personal information. eGames' new privacy policy identifies how information is collected and used by eGames and its service providers, explains the use of cookies and how they are used at eGames' web site, and gives consumers instructions for accessing and correcting information collected by eGames.
Among other significant terms of the agreement, eGames will not gather personally identifiable information unless consumers have consented to the collection of the information and have had a meaningful opportunity to review eGames' privacy policy. eGames' current policy states that eGames does not share personally identifiable information without the user's affirmative consent.
The settlement will be filed in court which will mean that the Attorney General may enforce its terms if necessary.