SAN FRANCISCO — A class-action lawsuit has been filed alleging that Toys R Us Inc. allows market researchers access to consumer data obtained from its Web site in violation of its own privacy policy.
The suit, filed in U.S. District Court on Wednesday, says Toys R Us allows a marketing firm to build personal profiles of its consumers even though a message on the Web site says personal information is kept "completely confidential." Plaintiffs are seeking to recover damages for customers who made purchases from the site.
Toys R Us spokeswoman Tuesday Yhland denied the allegations. "We do not sell, rent or trade visitor information to other parties," she said.
Yhland said the company hired the San Francisco-based marketing firm Coremetrics Inc. to analyze its customers' data "to enhance the customer shopping experience."
The lawsuit claims, however, that Coremetrics tracks Web surfers' movements on the toy giants' online site, calling the practice a "gross abuse of the trust parents and their children have placed in Toys R Us."
The filing came days after Interhack Corp., a Columbus, Ohio, company that develops online security and privacy tools, posted a report on its online site claiming that www.toysrus.com, its www.babiesrus.com affiliate and online sportswear retailers www.lucy.com and www.fusion.com are sending personal data to Coremetrics despite policies promising they won't share such information with third parties.
Wednesday's suit, brought by well-know law firm Milberg Weiss Bershad Hynes & Lerach in San Diego, is among the latest scuttles about Internet privacy. Two weeks ago, 39 attorneys general filed an objection to defunct www.toysmart.com's proposed sale of its customer-information list in what the government said was a violation of the online retailer's stated privacy policy.
This is also the second suit brought against the company. Another class action suit was filed in New Jersey on Wednesday by Finkelstein, Thompson & Loughran. The complaint alleges breach of contract, invasion of privacy and violation of federal law designed to protect electronic transmissions. The suit seeks to recover damages on behalf of customers who made purchases between August 5, 1998 and the present.
As Internet marketing explodes, privacy has become an increasing concern of both consumers and the government. The Federal Trade Commission is working with members of the online advertising industry to protect information such as the buying habits and credit information of Web surfers. The FTC may make legislative recommendations to Congress.
Coremetrics spokesman Dan Dement said the firm is contractually precluded from reselling or using data it analyzes for any of its clients.
"Coremetrics acts as an agent for its clients so it neither owns nor has rights to the data it collects," Dement said. "Any data Coremetrics tracks or reports is owned solely by our clients and we are contractually precluded from reselling or using this data."