Washington: The Federal Trade Commission (FTC) announced settlements with two consumer data brokers accused of exploiting sensitive location data to track individuals’ political and religious beliefs, pregnancy status, and other personal information. The settlements, which include measures to curb such practices, are part of the Biden administration’s ongoing efforts to address privacy concerns in the data brokerage industry.
Mobilewalla and Gravy Analytics, the two companies at the center of the FTC investigation, were accused of gathering location data without proper consent and using it to create user profiles based on visits to sensitive locations, such as places of worship and political events.
Restrictions and Industry Impact
The settlements include provisions requiring both companies to cease using sensitive location data and to implement opt-out mechanisms for consumers. Notably, this marks the first FTC settlement to prohibit the collection of location data through online advertising auctions, a prevalent practice in the digital advertising ecosystem.
FTC Chair Lina Khan emphasized the broader implications of such practices, stating that the targeted advertising industry’s reliance on sensitive consumer data leaves Americans vulnerable to exploitation. “The multi-billion-dollar industry built around targeted advertising may presently leave Americans’ sensitive data extraordinarily exposed,” she said.
Gravy Analytics, owned by Unacast, did not comment on the settlement. Mobilewalla, in a statement, disagreed with many of the FTC’s allegations but acknowledged the settlement as a step toward continuing its operations while respecting consumer privacy.
Constitutional Concerns Raised
The FTC’s Democratic commissioners raised concerns about Gravy Analytics selling location data to government contractors through its subsidiary, Venntel. They argued that such practices could infringe on constitutional rights, including protections against unlawful surveillance.
Commissioner Melissa Holyoak expressed particular concern, stating that selling location data to U.S. government agencies could violate individuals’ constitutional rights. However, Commissioner Andrew Ferguson noted that attendance at public protests should not necessarily be considered sensitive information.
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A Crackdown on Data Brokers
This settlement follows the Consumer Financial Protection Bureau’s (CFPB) announcement of proposed rules to regulate the data brokerage industry. Data brokers play a significant role in the digital economy, with websites, mobile applications, and devices collecting vast amounts of user data that is bought and sold in secondary markets.
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The FTC warns that such data could be misused for harmful purposes, including stalking, blackmail, espionage, and unauthorized government surveillance. The agency views this settlement as a pivotal step in addressing these risks while signaling the need for policymakers to focus on the practices of online advertising auctions.
