Recent enforcement actions by the Federal Trade Commission (FTC) against location data brokers mark a pivotal moment for marketers, lead generators, and businesses that rely on data-driven insights. On December 3, 2024, the FTC issued orders against two major location data brokers, Mobilewalla and Gravy Analytics and its subsidiary Venntel. These actions reflect the evolving regulatory landscape that businesses must navigate carefully, particularly when dealing with sensitive consumer data.
The FTC’s Focus on Location Data: A Recurring Theme
The FTC has increasingly scrutinized the practices of location data brokers, leveraging its Section 5 authority to address "unfair or deceptive acts or practices." These recent orders against Gravy Analytics, Venntel, and Mobilewalla continue a trend established earlier in 2024 with actions against other data collectors.
Location data, often marketed as a powerful tool for targeted advertising and lead generation, can reveal intimate details about individuals. These may include visits to medical facilities, religious institutions, or political gatherings. All information that businesses may use to infer sensitive characteristics such as health conditions, political affiliations, or religious beliefs. The FTC’s actions aim to curb these practices, focusing on both the misuse of data and the lack of transparency in obtaining it.
Gravy Analytics and Venntel: Monetizing Privacy Risks
The FTC's complaint against Gravy Analytics and Venntel sheds light on the dangers of selling sensitive location data without adequate consent. These companies allegedly purchased precise location data from third-party suppliers and used it to track individuals’ visits to sensitive locations. They then created audience segments based on inferred characteristics, such as political leanings or medical conditions, and sold these segments to private and public sector clients.
The FTC argues that by failing to ensure that consumers were informed or consented to such use, Gravy Analytics and Venntel prioritized profit over privacy. Such conduct raises significant ethical concerns, as it exposes individuals to risks such as discrimination, surveillance, or misuse of their sensitive information.
Mobilewalla: Exploiting Real-Time Bidding Data
Mobilewalla’s case further illustrates the complexities of the location data market. According to the FTC, the company harvested location data from real-time bidding exchanges, ostensibly meant for ad placement, to create detailed consumer profiles. This included geofencing sensitive locations, such as healthcare facilities and places of worship, and providing data to government clients.
The FTC highlighted Mobilewalla's failure to verify whether its data suppliers obtained valid consumer consent. According to the FTC, the company’s superficial review of supplier disclosures demonstrated a lack of due diligence, highlighting the need for thorough supplier checks to avoid legal troubles and protect your brand’s reputation.
Orders Beyond Traditional Settlements
The proposed orders settling the FTC’s claims against these companies go beyond standard settlements, introducing novel provisions designed to reshape data practices, which include:
- Supplier Assessment Program: The companies are required to implement stringent oversight of their data suppliers, including reviewing disclosures and consent mechanisms to ensure that consumer data is collected and shared transparently and ethically.
- Sensitive Data Program: The companies are also required to identify and prevent the misuse of sensitive data by designating senior officers to oversee compliance and conducting regular assessments.
- Prohibitions on Selling Sensitive Data: The orders explicitly ban the use or sale of data linked to sensitive locations, such as medical facilities, addressing the potential for harm in using such information.
These measures serve as a blueprint for businesses to adopt proactive compliance strategies, mitigating risks related to location data while respecting consumer privacy.
Evolving Business Practices to Handle Location Data Responsibly
For businesses, the implications are clear: practices must evolve to align with regulatory demands and growing consumer expectations for transparency. Companies must rigorously vet data suppliers to ensure they collect and share data ethically and with explicit consumer consent. This includes scrutinizing suppliers’ consent mechanisms and stopping the use of data when compliance is questionable. Sensitive location data requires special attention, companies must not only prevent misuse but also proactively establish safeguards to avoid handling such data unnecessarily.
The FTC’s actions also underscore the need for industry-wide adherence to ethical data standards. By limiting the use of location data to approved purposes, such as real-time bidding for advertising, businesses can mitigate risks while maintaining operational integrity. Adopting self-regulatory frameworks, provides clear guidance and demonstrates a commitment to responsible data practices.
For marketers and lead generators, embracing ethical data practices is both a regulatory necessity and a strategic advantage. Prioritizing transparency and compliance builds trust with consumers and safeguards against penalties.
