US regulator sues data broker for selling location information

The US Federal Trade Commission has sued adtech group Kochava for allegedly selling location data from “hundreds of millions of mobile devices” that could be used to track individuals’ movements, sending a warning shot to other data brokers and the digital advertising industry as a whole.

The FTC said Kochava, an Idaho-based data broker that measures mobile marketing effectiveness, violated its policies by acquiring and then selling precise geolocation data from smartphone users, which could be used to track users to and from sensitive locations. including abortion clinics, other medical locations and religious institutions.

“Kochava enables others to identify individuals and exposes them to threats of stigma, harassment, discrimination, job loss and even physical violence,” the agency said in a press release.

He seeks to prevent Kochava from selling sensitive data and to force him to delete any information that has already been located.

The U.S. agency’s lawsuit, which is being led by prominent Big Tech critic Lina Khan, is part of “a landmark shift in how policymakers, law enforcement and the tech industry approach cybercriminals.” data and consumer privacy,” said Cory Munchbach, president of Customer Data Platform BlueConic.

She pointed out that over the past two weeks, the FTC announced that it was exploring a rulemaking process to “crack down on harmful commercial surveillance” related to lax data security. Separately, the California attorney general last week announced a $1.2 million settlement with Sephora, the beauty store chain, for allegedly failing to notify consumers that it was selling their personal information.

“I expect we’ll see a lot of pearl from the data brokerage and advertising industries, where the majority of the scrutiny and impact will occur, and a lot of contrite no-apologies from the share of violators on the publisher’s and distributor’s side,” Munchbach said.

Kochava, which purchases location data from third-party companies and then makes it available to advertisers to help measure the effect of ads, said in a statement that the FTC “has a fundamental misunderstanding” of how its market works. Datas.

“Kochava operates consistently and proactively in compliance with all rules and laws, including those specific to privacy,” said Brian Cox, Chief Executive Officer of Kochava. He said “100%” of geolocation data on the Kochava Collective marketplace comes from third-party data brokers via “consenting consumers”.

Mike Audi, founder of Tiki, which helps users take control of their data, said by suing a relatively small company where it has a good chance of winning, the FTC is setting a precedent that could have wide ramifications. in the area.

“The disheartening reality is how widespread these pseudonymous data practices are,” he said.

Zach Edwards, an independent cybertech researcher, said the FTC’s action is likely just “the tip of the iceberg” and he applauded the agency for taking this big step.

“It is crucial for the FTC to begin approaching its advertising investigations from the perspective of the data supply chain – where data about people often flows from one company to many data broker vendors and then everything additional sharing by these providers creates an almost limitless proliferation of non-compliant user data sharing,” he said.

Earlier this month, Kochava took preemptive action as the FTC prepared its case, announcing on August 10 a “new privacy-focused approach” that it said would prevent the sharing of health service location data. on its data marketplace, unless consumers explicitly consent. first. On August 18, he sued the FTC in an attempt to block the case, accusing the agency of overreaching.

US regulator sues data broker for selling location information

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