Michigan A.G. goes after Web cookies

Michigan Attorney General Jennifer Granholm has threatened legal action

against four World Wide Web publishers, alleging that each site fails to

warn customers that they are being tracked by a third party.

Granholm said these sites fail to tell customers that a third-party company

is placing "cookies," or small programs that automatically upload on the

individual's computer that track the visitor's surfing.

"I think it is clear that these invisible tracking devices are following

where people are going online, and the consumer is not warned," said Tracy

Sonneborn, assistant attorney general in the Consumer Protection Division.

The Notices of Intended Action were issued June 12, alleging a violation

of the Consumer Protection Act, against Procrit.com, a medical site which

provides information including for AIDS patients; Babygear.com, targeting

young parents and babies; Stockpoint.com, a financial site; and Internet

Friends Network, an adult site.

The Attorney General targeted the sites specifically for their sensitive

subject matter and to reach consumers. "We gathered the sites that represented

different content specifically aimed at different audiences for the purpose

of raising consumer awareness," Sonneborn said.

In each case, the companies do not provide an adequate privacy policy stating

that the consumer is being tracked by a third party company or do not provide

a policy at all, the state said.

Companies such as Amazon.com, which use cookies to track users' favorite

books, for example, are not in violation of the law, Sonneborn said, because

consumer's willingly go to the site and know they are tracked, he said.

The sites have 10 days to contact the Attorney General's office and work

out "middle ground," Sonneborn said. That would most likely include a better

privacy statement and possible other disclosures. If the companies do not

respond, then a civil lawsuit will be filed, and the companies could be

forced to stop using cookies without proper disclosure and fined up to $25,000.