Recent FTC Enforcement Actions Reflect Heightened Concerns Over Protection of Location Data

In recent weeks, the Federal Trade Commission (FTC) has taken significant steps to clamp down on the misuse of sensitive location data by enforcing stringent measures against data brokers X-Mode Social and Outlogic, as well as InMarket Media. These actions, which mark the FTC’s first-ever prohibition on the use, sale, and disclosure of such data, underscore a growing emphasis on safeguarding consumers’ privacy rights in an increasingly data-driven world.

The enforcement actions, initiated on January 9, 2024, against X-Mode and InMarket respectively, highlight distinct but related concerns surrounding the collection, processing, and dissemination of location data. Central to the FTC’s case against X-Mode is the issue of misrepresentation, as well as the unauthorized use and disclosure of sensitive locations. Meanwhile, the case against InMarket focuses on transparency deficiencies, emphasizing the importance of providing consumers with clear notice and obtaining informed consent regarding the handling of their location data.

These actions did not materialize out of thin air; rather, they reflect a longstanding commitment by the FTC to address privacy concerns associated with location data. A speech in July 2022 by the FTC’s Acting Associate Director of the Division of Privacy & Identity Protection signaled the agency’s intent to vigorously enforce laws governing the use and sharing of location data. Moreover, a recent blog post reiterated the FTC’s dedication to safeguarding sensitive location data generated by mobile apps, further underscoring the regulatory scrutiny in this domain.

Notably, the recent developments in the case against data broker Kochava, where the district court denied a motion to dismiss, further bolster the FTC’s stance on protecting consumer interests. This decision signifies a pivotal moment in upholding the standards of consumer protection under Section 5 of the FTC Act, reinforcing the notion that companies must not jeopardize consumer privacy for commercial gain.

The complaints against X-Mode and InMarket outline several key areas of concern that warrant attention. Firstly, both companies were faulted for inadequate disclosure of their data collection practices to consumers, failing to provide comprehensive information regarding the purpose and scope of location data usage. Additionally, shortcomings in data protection policies and a lack of oversight over third-party app developers were highlighted, indicating systemic issues in ensuring the integrity of sensitive data handling practices.

In response to these concerns, the FTC has imposed stringent requirements on X-Mode and InMarket through proposed orders aimed at remedying the identified deficiencies. These orders mandate the implementation of comprehensive privacy programs, stringent restrictions on the use and disclosure of sensitive location data, and the development of supplier assessment programs to ensure compliance with consent requirements.

Key takeaways from these enforcement actions underscore the importance of maintaining oversight over third-party data collection practices, providing clear and accurate disclosures to third parties, and ensuring that data policies align with the intended purposes of data use. Obtaining informed consent from consumers and assessing the appropriateness of data retention policies are crucial steps in upholding consumer privacy rights.

In conclusion, the recent enforcement actions by the FTC against X-Mode and InMarket signal a watershed moment in the regulatory landscape surrounding the protection of location data. As technology continues to advance and data becomes increasingly pervasive, it is imperative for companies to prioritize consumer privacy and adopt robust data protection measures to avoid regulatory scrutiny and uphold consumer trust in the digital ecosystem.

Clarip’s Data Privacy Governance Platform ensures transparency with users and compliance with all consumer privacy regulations. Clarip takes data privacy governance to the next level and helps organizations reduce risks, engage better, and gain customers’ trust!

Contact us at www.clarip.com/privacy/contact or call Clarip at 1-888-252-5653 for a demo.

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Mike Mango, VP of Sales
mmango@clarip.com

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