Senate Panel Queries 16 Cos On Ties To 3 E-Marketing Firms

   By Fawn Johnson 
   Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)

The Senate Commerce Committee is querying 16 companies that conduct sales over the Internet about their business relationships with three marketing companies that are under investigation by the panel.

In letters sent Thursday to the likes of 1-800-FLOWERS.com Inc. (FLWS), Orbitz Worldwide Inc. (OWW) and priceline.com Inc. (PCLN), committee Chairman John D. Rockefeller (D., W.Va.) asked whether the companies use a "data pass" process to transfer their customers' billing information to one of the three marketing companies.

For the better part of the year, the committee has been investigating marketing practices at Vertrue Inc. (VTRU), Webloyalty Inc. and Affinion Group Inc.

The most recent set of letters went to companies that allow at least one of those firms to advertise on their Web sites.

The 16 companies receiving the letters from Rockefeller represent a sampling of Web companies that could be sharing customers' billing information with third-party marketing firms, according to committee aides.

Rockefeller wants to know how online consumers find themselves charged on an ongoing basis for unwanted club memberships offered by the marketing companies or their subsidiaries.

Customers on e-commerce Web sites sometimes incur charges after a pop-up window appears offering cash-back rewards if they sign up for an online membership service.

Thousands of consumers have complained that they didn't authorize monthly charges to their credit cards for the memberships, according to the committee.

The three marketing firms under investigation all say they adopt high marketing standards and are upfront with customers about discount club membership terms.

Rockefeller sent letters to the following companies: 1-800-FLOWERS.com, AirTran Holdings Inc. (AAI), Classmates Online Inc., Continental Airlines Inc. (CAL), FTD, Fandango Inc., Hotwire Inc., Intelius Inc., MovieTickets.com Inc., Orbitz, Pizza Hut, priceline, Redcats USA, Shutterfly Inc. (SFLY), US Airways Group Inc. (LCC) and Vistaprint USA Inc.

FTD and Classmates are both units of United Online Inc. (UNTD).

The letters ask the companies how many of their customers have enrolled in memberships through Affinion, Vertrue or Webloyalty and whether they have received complaints from customers about the club memberships.

Rockefeller also wants to know whether Affinion, Vertrue or Webloyalty supply the e-commerce Web companies with data on customers who sign up or cancel club memberships.

Rockefeller has asked the companies to respond by Nov. 14.

A priceline spokesman said his company has received the letter and is reviewing it. Officials from the other 15 companies weren't immediately available for comment.

-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com