The attorney general also released a top ten list of consumer complaints for the past year, and, for the first time ever, e-commerce topped it.
Granholm had issued a Notice of Intended Action under the Consumer Protection Act against eGames last September.
She accused the firm of not adequately warning consumers that its games included a program that allowed Conducent Inc., an advertising company, to secretly track and interact with the computers that ran the eGames products.
The attorney general also alleged that eGames covertly permitted third parties to monitor the browsing behavior of consumers who went to the company’s Web site.
But now as a result of the settlement, Granholm announced “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,” she added.
Under the agreement, eGames must remove the third-party advertising software from all future versions of its computer games.
The ad program contained in the demo games that are downloaded from its Web site was to have been removed by last week, while the full versions of eGames software are to be free of that program by March 31.
The eGames product can be purchased online and is sold at Wal-Mart, Kmart, Target and CompUSA.
The attorney general said poor e-commerce business practices, like those of eGames, headed the list of Michigan consumer complaints last year. The formal gripes included online auction fraud, privacy issues, junk e-mail, Internet-provider billing and service problems, and fraudulent online retail sales.
“It’s official; low-tech scams have truly gone high tech,” said Granholm. “Internet-related crimes and frauds are now the most complained about consumer problems in Michigan.”
This is the first time that sweepstakes or telemarketing didn’t top the attorney general’s Consumer Protection Division complaint list.
Sweepstakes fell to fifth and telemarketing to seventh on the 2000 list, which was based on more than 70,000 complaints.
“Privacy concerns on the Internet are inhibiting the growth of this wonderful new medium,” said Granholm.
“If consumer use of the Internet for business and for recreation is to continue to grow, consumers must be able to feel confident about the privacy and the security of their interactions with the Web.”