Data broker Outlogic will be subject to the Federal Trade Commission’s (FTC) first ban on the use, sale, or disclosure of sensitive location data as part of a proposed order announced Tuesday by the agency.
Virginia-based Outlogic and its predecessor X-Mode Social were accused by the FTC of selling nonanonymized location data purchased or collected from their apps or third-party apps to hundreds of clients across a variety of industries without removing sensitive locations like medical clinics or places of worship from the raw data.
The FTC’s proposed order also includes requirements for the companies to delete all location data previously collected without consent and implement policies and procedures to better protect consumers’ personal information.
The details: Until at least May 2023, X-Mode did not have policies or procedures in place to remove sensitive locations from raw location data sets it sold, according to the FTC’s complaint.
“X-Mode’s data could, therefore, be used to identify the sensitive locations that individual consumers have visited,” the agency contended.
The FTC further faulted X-Mode and Outlogic for not fully informing consumers about who would receive their data and failing to employ safeguards to ensure they honored requests by certain users to opt out of tracking and personalized ads.
The complaint charged X-Mode with engaging in unfair and deceptive practices in violation of Section 5 of the FTC Act.
Compliance considerations: X-Mode and Outlogic must create a program to ensure they maintain a comprehensive list of sensitive location data that cannot be shared, sold, or transferred, according to the FTC.
The companies are also limited from using location data when they can’t verify whether consumers provided consent regarding collection of the data.
“With this action, the commission rejects the premise so widespread in the data broker industry that vaguely worded disclosures can give a company free license to use or sell people’s sensitive location data,” said FTC Chair Lina Khan and Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya in a joint statement.
Company response: “We disagree with the implications of the FTC press release,” said a company spokesperson in an emailed statement. “After a lengthy investigation, the FTC found no instance of misuse of any data and made no such allegation.
“Since its inception, X-Mode has imposed strict contractual terms on all data customers prohibiting them from associating its data with sensitive locations such as healthcare facilities. Adherence to the FTC’s newly introduced policy will be ensured by implementing additional technical processes and will not require any significant changes to business or products.”