The Federal Trade Commission has successfully kept its first federal court case against a location data broker accused of illegally selling large amounts of data in violation of the FTC Act.
On Saturday, U.S. District Judge Lynn Winmill made a plausible argument that “Cochava’s data sales violate consumer privacy and expose them to the risk of collateral damage by third parties,” as amended. Denied Kochava’s motion to dismiss the FTC complaint.
The Winmill decision builds on the FTC’s original complaint, which the court previously said failed to make a sufficient allegation that Kochava’s data sales caused or were likely to cause “substantial” harm to consumers. This overturned the rejection.
The FTC alleges that Mr. Kochava sold “substantial amounts of data obtained from millions of mobile devices around the world” without users’ knowledge or informed consent, and used precise geolocation data and “an alarming amount of He was accused of combining “confidential information and personally identifiable information.” The FTC claimed that this data is not anonymized and is “linked or easily linkable to individual consumers” without mining “other data sources.”
Cochava’s data sales allegedly allow customers (who the FTC notes often pay tens of thousands of dollars a month) to target specific individuals by combining Kochava’s data sets. Using only Kochava’s data, marketers can determine which women visit a particular building, such as the woman’s name, her email address, her home address, and whether she is African American or a parent. You can create a “highly detailed” portrait of your ad targets. If so, how many children do you have?) or have an app on your phone that identifies cancer symptoms. ” One of Mr. Kochava’s databases includes a “comprehensive profile of an individual consumer” containing up to “300 points of data” on “over 300 million unique individuals.” Contains,” his FTC reported.
This can be done in “two different ways” by violating consumers’ privacy and by creating “an increased risk of secondary harm, such as prejudice, discrimination, physical violence, and psychological distress.” The FTC argued that it caused harm.
In its amended complaint, the FTC overcomes deficiencies in the original complaint by citing specific examples of consumers known to have been harmed by brokers who shared sensitive data without their consent. That includes a Catholic priest who resigned after being busted by a group that used precise mobile geolocation data to track his personal use of Grindr and his travels to “LGBTQ+-related locations.” It is. The FTC also found that journalists used precise mobile geolocation data to identify and track military and law enforcement officers over time, and that “women considering abortion” visited reproductive health clinics. ” by data brokers to target abortion advertisements is also an infringement. and alternatives to abortion.
“Kochava’s conduct intrudes into the most private areas of consumers’ lives and has caused or is likely to cause significant harm to consumers,” the FTC’s amended complaint states. It is being
The FTC is seeking a permanent injunction against Kochava for allegedly selling sensitive data without users’ consent.
Kochava believes the examples of consumer harm in the FTC’s amended complaint are “anecdotal” and separate from the agency’s own activities. The data broker seemed so confident that Winmill would agree to dismiss the FTC’s amended complaint that the company filed a lawsuit against the FTC for what the FTC deemed “unsubstantiated” filings. demanded sanctions. Many of the FTC’s claims were “intentionally false,” Kochava said.
Ultimately, the court found no evidence that the FTC’s claims were frivolous. Instead of dismissing the case and ordering the FTC to pay sanctions, Winmill argued that Kochava’s motion to dismiss would “likely” cause Kochava’s data sales to cause harm. This misses the point,” he wrote in the order. Mr. Winmill said that because the FTC had “significantly” expanded its factual claims, the FTC “easily” met the plausibility standard for alleging that significant harm could occur.
Charles Manning, CEO and founder of Kochava, said in a statement provided to Ars that Kochava “looks forward” to Winmill’s ruling and is “confident” that Kochava will “win on the merits.” ” he said.
“This case is really about the Federal Trade Commission trying to circumvent Congress to enact data privacy laws,” Manning said. “The FTC’s sordid assumptions in the amended complaint are nothing more than scare tactics. Kochava has always consistently and aggressively operated in compliance with all regulations and laws, including those specific to privacy.”
In a press release announcing the 2022 FTC case, Samuel Levin, director of the FTC’s Bureau of Consumer Protection, said the FTC is determined to end Kochava’s allegedly harmful data sales.
“Where consumers go to seek health care, receive counseling, or celebrate their faith is personal information and should not be sold to the highest bidder,” Levine said. “The FTC is taking Mr. Kochava to court to protect people’s privacy and stop the sale of sensitive geolocation information.”
