updated 2/10/2005 8:24:39 PM ET 2005-02-11T01:24:39

TRUSTe, the business community's guarantor of Internet privacy, abruptly ended on Wednesday its relationship with the company operating FreeiPods.com and other Web sites, alleging unspecified violations of privacy promises to consumers.

TRUSTe said Gratis Internet LLC of Washington no longer could display on any of its Internet properties the industry's broadly recognized seal intended to assure consumers that a Web site complies with privacy-protection guidelines.

It was the first such revocation in at least two years under the industry's own regulatory program. "It is rare," said Carolyn Hodge, a spokeswoman for San Francisco-based TRUSTe. "It is really a last resort for us."

Officials from Gratis Internet could not be reached for comment. Its founders, Peter Martin and Rob Jewell, did not return telephone messages left with their offices on Wednesday.

Gratis runs several Web sites that purport to offer free products, from condoms to iPod music players, in exchange for customers' agreement to accept trial offers from other companies and refer friends to the sites.

TRUSTe said Gratis violated promises involving the protection of children's information and changed how it managed the private information of its customers without adequately notifying them. But TRUSTe said that, due to a confidentiality agreement, it could not disclose exactly how Gratis had violated any agreements.

In a statement, TRUSTe said Gratis had agreed to some changes in its business policies as requested but "did not complete the entire process."

Some privacy advocates said potential victims were left puzzled in the case.

"What do these users need to know that they don't know? Consumers whose personal information may have been inappropriately obtained or disclosed are left in the dark," said Marc Rotenberg, head of the Washington-based Electronic Privacy Information Center.

Hodge said TRUSTe determined it was not necessary to report Gratis' behavior to the Federal Trade Commission, which typically investigates Internet privacy violations. She said aggrieved consumers can file complaints with the FTC or state attorneys general.

Internet merchants popularized privacy-seal programs in the late 1990s as a regulatory alternative to new federal laws that would protect the online privacy of consumers.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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