FTC gets serious about data privacy with new lawsuit

The Federal Trade Commission has filed a lawsuit against data analytics company Kochava, alleging that the company sold sensitive geolocation data from hundreds of millions of mobile devices.

The FTC argues that the data could reveal users’ visits to sensitive places, such as abortion providers or addiction recovery centers.

It’s the latest move by FTC Chair Lina Khan Important to increase government oversight of companies that trade in consumer data.

Marketplace’s Kimberly Adams recently spoke with Megan Gray, founder and CEO of GrayMatters Law & Policy, to discuss the importance of this issue. Below is an edited version of their conversation.

Megan Gray: Of great importance, the Federal Trade Commission just kicked a big pile of old ants. There are a lot of data brokers who participate in this market. I would risk guessing that they are all shocked to complain that this act is not permitted and violates federal law.

Kimberly Adams: But as I mentioned, this is a common practice. Why this particular company?

grey: So you have to read between the lines in the complaint. Kochava, unlike most other data brokers for geolocation data, fails to do two things. First, it blocks any geolocation data associated with sensitive sites, such as abortion clinics, medical centers, or abused women’s clinics. Second, instead of researching why a customer purchased a particular chip or accessed the database, [they] He simply said, “I’m buying it for business purposes.” The FTC seems to think you need to do more research: What are the business purposes? Is someone tracked to abortion clinics so you can view pro-choice ads while they are sitting in the waiting room? Or is it commercial purposes of sending people coupons to buy ice cream as they walk past Baskin Robbins?

Adams: Do you have a sense at this point which party to this lawsuit has the upper hand with respect to the law or who has a stronger argument in court?

grey: Kochva. The Federal Trade Commission (FTC) has two reasons it can pursue its mission to protect the consumer – one is deception and the other is injustice. The FTC went after the injustice. The FTC must determine the actual or intrinsic potential for consumer injury — not emotional or speculative distress. Such as actual damage, or the potential for significant damage. for example, [if] Kochava sold the data to a nefarious company that was trying to track down vulnerable members of the public due to harassment, and the company is likely to succeed in that harassment campaign. It’s very hard to prove, especially in the case of a data broker because the data broker has no relationship with the consumer, with the “endpoint”.

Adams: I wonder if in this environment, after the Roe v. Wade, when there has been so much attention focused on data tracking and how much information these data brokers have about people’s movements, if that really creates an opportunity for the FTC to prove that potential harm?

grey: that it. It’s not just an opening, though, it’s a requirement. The FTC bears the burden of proof, and they have to prove it. So it is a double edged sword. If the FTC can’t meet its burden of proof, which can’t be guesswork, it could be a problem for the FTC bringing forward any future issues like this. So what if the FTC fails in this particular case? The bright side may be that this is the incentive to get Congress to enact a major federal privacy law.

Adams: This was actually going to be my next question. Congress has not yet passed the federal Consumer Privacy Act. What does Nav on Hill mean in terms of data privacy, especially ahead of the 2024 elections?

grey: In short, nothing. Currently, there is a privacy bill in Congress. You will not go anywhere. Said the one who had the power to transfer it in the Senate, ‘No deal’ because it’s not strong enough. This means that it won’t happen for a while because you have a midterm, everything needs to be reorganized and different commission assignments [will be made]The privacy bill may be reintroduced next year. But for now, nothing will happen, and the fact that the FTC has brought this case now is not going to cause any ripples on the part of Congress for things because the outcome of this case will not be known. For some time.

Adams: So what does it tell you about the FTC’s broader, long-term strategy in terms of consumer data privacy that they’re pursuing in this case?

grey: That they will not back down from the fight, that they will stand behind what they believe the law should be. They have said that such commercial surveillance practices, especially when they get involved on sensitive websites, should be blocked.

Adams: As you know, this is how the internet makes money. How important would it be to the Internet economy – and I think, therefore, to the economy of this country – if this way of making money were to disappear?

grey: I think you’ll see some adjustment, but I think the economy will be fine and, in fact, probably healthier and stronger. Right now, the internet economy, to the extent that it’s built on this kind of tracking, advertising and surveillance, is just an unhealthy market, and it’s not going to last. I think this adjustment period, you’ll definitely see a lot of companies get hit hard because they haven’t designed alternative income streams. We’ve seen this with Facebook, when Apple implemented a technical ban Facebook is collecting as much data on Facebook app users on iPhones as they used to be, Facebook has been hit hard financially and they are still grappling with how to make money in this new iPhone world order. But they will find a way. We’ve seen it with new seat belts, petrol and environmental regulations. There’s an adjustment period, but we’re not going to push into some new Great Depression because we no longer have an online trading surveillance economy.

You can read the FTC’s statement about the lawsuit over here Kochava responded to the lawsuit over here.

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