Web analytics company Compete, Inc. has settled with the Federal Trade Commission over charges that the company collected detailed personal information on users — without first gaining their consent. According to the FTC, Compete used promotions and advertisements to encourage people to install its Compete Toolbar product, which the company said would collect anonymized information about "the web pages you visit." Instead, however, the charges state that the software collected personal information people entered into said websites — including login information, passwords, and both credit card and social security numbers.

While Compete assured users that "All data is stripped of personally identifiable information before it is transmitted to our servers," the FTC states that this was not the case — even alleging that the company transmitted the information in readable text instead of using more secure means. Under the proposed settlement agreement — the FTC will make it available for public comment for 30 days before it becomes final — Compete will disclose all types of information it collects and obtain user authorization before doing so.

According to a notice on Compete site Consumer Input, however, the problem wasn't intentional. The notice attributes the situation to a "privacy filter" on earlier versions of the software failing to strip personal information before sending it back — thought the fact that Toolbar was collecting this data in the first place is no doubt cause for concern. The statement goes on to say that "Compete did not knowingly use any such inadvertently collected information in its services." In any case, it looks like Compete will have some help moving forward: the company is agreeing to set up its own in-house security program that will be subject to third-party audits for the next 20 years.