Data brokers selling political and pregnancy information settle with FTC over privacy violations

Two data brokers, Mobilewalla and Gravy Analytics, have reached a settlement with the Federal Trade Commission (FTC) after being accused of selling personal information that tracked individuals’ religious beliefs, political affiliations, and pregnancy status. These companies agreed to stop using data tied to visits to sensitive locations, a move hailed as a significant step in the FTC’s broader effort to address privacy concerns.

FTC’s Crackdown on Data Brokers

The FTC claims the companies gathered location data without ensuring proper consent, which it classified as an unfair and deceptive practice. This settlement is notable as it includes a ban on collecting location data through online ad auctions, marking a first in U.S. regulatory actions against the data broker industry.

The Biden administration is actively working to regulate this sector, with the U.S. Consumer Financial Protection Bureau also proposing new rules this week. In a statement, FTC Chair Lina Khan said:

“Persistent tracking by data brokers can put millions of Americans at risk, exposing the precise locations where service members are stationed or which medical treatments someone is seeking.”

Khan added, “Mobilewalla exploited vulnerabilities in digital ad markets to harvest this data at a stunning scale. The FTC is cracking down on firms that unlawfully exploit people’s sensitive location data and ensuring that we protect Americans from unchecked surveillance.”

“Mobilewalla collected massive amounts of sensitive consumer data – including visits to health clinics and places of worship – and sold this data in a way that exposed consumers to harm,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is acting today to stop these invasive practices and protect the public from always-on surveillance,” FTC said in a news release.

The Expanding Data Broker Market

Data brokering has grown into a highly profitable industry, centered on the collection and sale of personal information from millions of individuals worldwide. Companies gather data from multiple sources, process it, and sell it to other parties, often with the promise of driving corporate growth and improving consumer experiences.

Yet, these practices often raise significant privacy issues. Data is frequently collected without explicit consent and sold to third parties, leaving individuals vulnerable to potential misuse. This has fueled public concerns and regulatory scrutiny, prompting efforts to impose stricter rules aimed at safeguarding personal information.

The scale of this industry underscores its impact. In 2022, the global data broker market was valued at $246 billion, with estimates suggesting it could almost double to $471 billion by 2032. In the U.S., there are more than 1,700 registered data brokers, though the global number remains uncertain due to inconsistent registration requirements across regions.

Websites, mobile apps, and devices continuously collect vast amounts of data, which is then traded in secondary markets. While much of this data is leveraged for targeted advertising, the FTC has raised concerns about more troubling uses, such as enabling stalking, blackmail, or unauthorized surveillance. These risks highlight the pressing need for stronger oversight and protection in this rapidly expanding sector.

Selling Sensitive Location Data

According to the FTC, Mobilewalla and Gravy Analytics used data showing where mobile devices were located to create profiles based on visits to churches, political events, and other sensitive locations. The companies will now provide opt-out mechanisms for individuals, Reuters reported.

Unacast, which owns Gravy Analytics, did not respond to requests for comment. Mobilewalla, in a statement, disagreed with many of the FTC’s claims but emphasized that the settlement allows it to continue offering “valuable insights to businesses in a manner that respects and protects consumer privacy.”

New Restrictions and Legal Implications

This settlement also bars Mobilewalla from using data collected through ad auctions for purposes other than bidding on advertisements. FTC Chair Lina Khan highlighted concerns about the targeted advertising industry, stating that it may leave individuals’ sensitive information vulnerable.

Gravy Analytics, through its subsidiary Venntel, has sold location data to government contractors, sparking constitutional concerns raised by FTC commissioners. Commissioner Melissa Holyoak agreed that selling such data to government agencies might infringe on constitutional rights. Meanwhile, Commissioner Andrew Ferguson argued that attending public protests should not be classified as sensitive information.

This case signals a turning point in how regulators address the practices of data brokers. As the FTC and other agencies intensify their scrutiny, companies relying on sensitive consumer data may face stricter regulations and greater public accountability.